JSW Steel firm on expansion plans despite economic crisis

BS reported that amidst talks that expansion plans of Indian steel companies may take a hit due to the ongoing global economic slowdown, JSW Steel reiterated the commitment to increase its capacity to 32 million tonnes by 2020.

Mr Sharad Mahendra associate VP sales & marketing said that the company is in an expansion mode and has plans to increase its steel production to 32 million tonnes per annum by 2020.

He said that "Our new Greenfield plants will come up in West Bengal and Jharkhand with a capacity of 10 million tonne per annum each.”

He said that the steel plants in Karnataka and Tamil Nadu together produce around 4.8 million tonne per annum and its capacity would increase by November this year to around 8 million tonne per annum.

Indian steel companies expect the output to grow at 8% to 9% against the targeted 12% to 13% for the present year, due to the global economic slowdown, which has resulted into a slump in demand and decline in prices of the alloy.

IIL cuts steel production - Report

DNA India reported that Ispat Industries Limited is becoming the first one in India to announce product cut amid global melt down. AS per report, IIL is likely to cut production by 15%.

The report cited an IIL official as saying that “Inventories have gone up considerably due to cheap imports and due to this, we have to cut production.”

The official added, “We were not allowed to raise prices to match those in the global market when they were high and now the government is asking us to cut prices. We have no option but to cut production to keep prices stable.”

He added that “The government needs to step in to prevent cheap imports from countries such as China, Ukraine and Russia. These imports come with a lower price tag as the raw material costs are lower in those countries. One tonne of imported steel costs INR 42,000 against INR 45,000 per tonne for domestic steel.”

MSL plans to increase exports

Steel Insights reported that October 8, 2008: Maharashtra Seamless Ltd plans to increase its exports to 35% of its total production, against its initial target of 30% during the current fiscal. This has been spurred by the huge global demand for pipelines from the oil and gas sector.

Mr Anil Jain CFO of MSL told Steel Insights that the international market is very buoyant at present and tapping these markets would be strategic as well as beneficial for the company.

MSL exported 25% of its total production in 2007-08, out of which 20% went to the US and the rest to other countries.

Inflation seen at 11.98% on September 27th 2008

Reuters reported that inflation rate in India was seen at 11.98% on September 27th 2008 as against 12.13% on September 20th.

The annual inflation rate is expected to remain just below 12% in the last week of September, helped by cheaper prices of fuel and some foods.

According to the median estimate from the poll of 10 economists, the wholesale price index is forecast to have up by 11.98% in the 12 months to September 27th having posted a rise of 11.99% in the previous week.

In early August, the inflation rate was 12.63% the highest reading since annual numbers in the current data series became available in April 1995. It jumped into double digits after a hike in retail fuel rates in June.

Analysts said that inflation has probably already peaked, and may now embark on a downtrend, but the base effect was likely to play a key role in the next few weeks.

Mr Shubhada Rao chief economist at Yes Bank said that "We are likely to see a lower fuel price index and even the primary articles are expected to decline, so we expect inflation one tick lower at 11.98."

Mr Duvvuri Subbarao central bank governor said that inflation was showing signs of moderating but it was too early to conclude whether this was a trend.

A senior finance ministry official said recently said that the rate was unlikely to fall below 10% in 2008 while the deputy head of the government's planning commission said it would fall to single digits in a couple of months.

The India government said that inflation would hit 13% and start moderating from December before settling at 8.0% to 9.0% by the end of the fiscal year in March.

FDI inflow into India up by 124% - Mr Nath

The Financial Express reported that amidst global financial crisis India's foreign direct investment saw an impressive up by 124% in the first 5 months of the current fiscal while the FDI flows in August went up by huge 180%. The country received FDI of USD 14.6 billion during April to August 2008 against USD 6.5 billion a year ago.

Mr Kamal Nath minister of Commerce and Industry said that "This must be seen in the context of the global economic situation." He said that the target for the current fiscal would be met despite a difficult financial environment in the world.

The FDI target for 2008-09 is USD 35 billion while the actual inflows during the previous year were USD 24.57 billion. In August alone India's FDI was USD 2.32 billion a rise of 180% over the corresponding month 2007.

As per report, the manufacturing sector received USD 5 billion during April to August period showing a rise of 41% over inflows in the year ago period.

Emerson to automate power plant at Bhushan Power & Steel

It is reported that Emerson Process Management will digitally automate new 3 x 130 MW thermal units at a captive power plant serving Bhushan Power & Steel Ltd at Rengali in Orissa. As per release, the plant provides electricity to Bhushan’s 2.5 million tonne per annum integrated steel plant.

Under the contract, Emerson will install its PlantWeb digital plant architecture with the Ovation expert control system in the three new coal-fired units being built to meet the increased power demands of Bhushan’s integrated steel plant, which is in the midst of a high-profile expansion project that will provide additional capacity for both long and flat products.

The current power plant consists of one 40 MW unit, one 60 MW unit and two 8 MW units. Phase One of the expansion project calls for two new 130 MW units to go into service in the fall of 2008, followed by the subsequent startup of the third 130 MW unit in Phase Two by 2010.

Emerson's Ovation system will control balance of plant processes as well as steam and water analysis, and continuous emissions monitoring for the new power generating units. The Ovation system will also interface to the Siemens turbines and Foster Wheeler-designed IJT boilers.

The Ovation system was designed specifically for the power industry and has been proven in thousands of installations throughout the world. Ovation, a key component of Emerson’s PlantWeb digital plant architecture, leverages commercially available hardware platforms, operating systems and network architectures and boasts a number of industry-leading advanced technologies. These include the incorporation of embedded advanced control algorithms; a mission-critical, Fast Ethernet network for high-speed communication of plant information; the industry’s most powerful controller to optimize plant performance; and a full line of analog, digital and special-purpose turbine and boiler I/O modules; among others.

For Phases One and Two, Emerson will provide a total of 31 redundant Ovation controllers, and AMS Suite predictive maintenance software, which streamlines device configuration and commissioning for more efficient plant startup and drives on-going maintenance productivity. Emerson will also provide 47 Rosemount 3051 transmitters. In all, Ovation will manage approximately 24,500 I/O points at the three new units.

Mr Sanjay Singal CMD of Bhushan Power & Steel Ltd said that “Adding additional units at our power generating facility is crucial to the successful expansion of our steel manufacturing facility. For such an important project, we were looking for an automation supplier with the latest technology and power industry experience. We found this in Emerson.”

Mr Bob Yeager president of the Power & Water Solutions division of Emerson said that “Our involvement in this project underscores how Emerson’s global resources and cutting edge technologies come together to benefit our customers. This is our first opportunity to work with Bhushan Power & Steel. We are honored to have been selected and are committed to equipping Bhushan with the latest available control technology.”

Emerson Process Management is a leader in helping businesses automate their production, processing and distribution in the power, water and wastewater treatment, metals and mining, chemical, oil and gas, refining, pulp and paper, food and beverage, pharmaceutical and other industries.

BHEL bags 13,828 MW orders in eastern region

India’s largest power equipment maker Bharat Heavy Electrical Limited has announced that it will carry out 38 projects adding up 13,828 MW in the 11th plan period in the eastern region.

According to the sources, BHEL is committed to add 78,000 MW during the same period. It is carrying out all the 3 projects identified by the Central government in the eastern region for continuous power supply during the upcoming Commonwealth Games in October 2010.

These are Mejia power house-II, Durgapur Steel project and Koderma project that would add 3,000 MW of installed capacity in the region and are scheduled to be finalized in around 35 months.

Chattisgharh State Electricity Board has recently awarded 500 MW Korba (West) project and 2X500 MW Marwah project to BHEL.

Recently, BHEL has secured a contract worth INR 22 billion for building a Combined Cycle Power Plant in Tripura on turnkey basis.

L&T gives clarification on medical equipment business

Larsen & Toubro Limited has clarified that it has no intention of closing down its medical equipment business. It said that “The misinformation campaign by some of its competitors and others is untrue and malicious in nature. “

A company release said that “The company strongly refutes these rumors. It has only obtained an enabling resolution from its shareholders for disposal of the said business. It intends to do so only if it receives an attractive offer.”

NTPC pays INR 590.37 crore dividend to Indian government

It is reported that National Thermal Power Corporation declared it’s highest ever dividend. At about INR 2,886 crore for the financial year 2007-08, it amounts to 35% of the PSU’s paid up capital.

Shareholders of the company approved a final dividend of 8% amounting INR 659.63 crore at the 32nd Annual General Meeting of the company held on September 17th.

Mr RS Sharma CMD of NTPC presented a cheque amounting to INR 590.37 crore to Mr Sushil kumar Shinde Union Minister of Power as Government’s share towards final dividend for the 2007-08. The company had earlier in February paid an interim dividend of INR 1,992.50 crore.

Thus NTPC has made a total dividend payment of INR 2,582.87 crore to Government of India for the FY 2007-08 as against INR 2,361.48 crore in the last FY 2006-07.

IVRCL bags INR 499 crore order

PTI reported that IVRCL Infrastructures & Projects has bagged INR 499.23 crore order for providing irrigation facilities to the Andhra Pradesh government. Under the 4 year contract IVRCL would lift water from Godavari River.

Last month IVRCL had won INR 418.50 crore order from Madhya Pradesh government for providing irrigation facilities. Under the 3 year contract IVRCL would implement the lift irrigation project for the Narmada Development Division in the state.

Endurance JV to start production by April

Project Monitor reported that Endurance Magneti Marelli Shock Absorbers Private Limited is expected to begin commercial production at its Chakan plant near Pune in Maharashtra by April 2009.

Officials of Endurance Technologies a JV partner said that "Trial production will start in January 2009." Set up with an investment of INR 32 crore the plant will make shock absorbers for four wheelers catering to the Indian market. Production in the first year would be 1.05 million units moving up to 2.06 million in the second.

Endurance Technologies Private Limited and Magneti Marelli entered into an agreement in June 2008 to set up this JV in which Endurance holds 50% equity plus one share. The JV will also float a subsidiary in Thailand to make shock absorbers in that country.

Endurance officials added that orders for machinery have been placed. No land was needed as the Chakan shock absorbers plant involved the conversion of Endurance's existing plant where it manufactured suspensions for 2 wheelers.

Decision on TNEB revamp shortly

Project Monitor reported that Tamil Nadu Cabinet is likely to take a decision on the proposal for restructuring the Tamil Nadu Electricity Board in the coming days.

This is in the wake of a proposal outlined by Mr Arcot N Veeraswami Electricity Minister who mentions that the 51 year old electricity board would be converted into a holding company and two subsidiaries one for transmission and another for generation and distribution.

As per report the Centre has asked Tamil Nadu to revamp its electricity board and the deadline given is October 10th. But prior to the scheduled cabinet meeting, the minister is likely to hold talks with trade unions of the Board.

Meanwhile TNEB is also gearing up to tackle power crisis facing the state. The Board has asked industrial consumer with captive power plants run on furnace oil not to draw energy from the grid due to the power crisis. An official notification in this regard is awaited soon after TNEB's proposal gets acceptance from the state Cabinet. This will help TNEB to cope up with savings of about 100 MW and thereby help domestic consumers at large.

French EDF denies India nuclear plans

Project monitor reported that Électricité de France has denied any plans of an ambitious venture in India's civil nuclear energy sector. An official from EDF said that the company had no immediate plans to set up a project in India at this stage.

Now with an end to India's 34 year nuclear isolation with signing of the nuclear deal with US, the country anticipates to add nuclear generating capacity of 30,000 MW to 60,000 MW by 2030. A potential USD 150 billion new investment is expected in the sector and EDF's denial makes the other two leading French giants, Areva and Alstom, better placed to grab lucrative Indian contracts in the civilian nuclear energy sector. However both these companies will face stiff competition from their American and Russian rivals.

EDF Group is one of the world's largest producers of electricity. In 2003 it produced 22% of the European Union's electricity primarily from nuclear power. Its 58 active nuclear reactors are spread out over 20 sites. They comprise 34 reactors of 900 MWe, 20 reactors of 1.3 GWe and 4 reactors of 1,450 MWe. The company has an installed capacity of 126.7 GW out of this 72.1% comprises nuclear energy.

Mahindra defense JV proposal rejected by government

BS cited Mr P Chidambaram Finance Ministry of India as saying that the Foreign Investment Promotion Board has rejected a proposal by Mahindra Defense Systems to set up a 51:49 JV company with British defense multinational BAE Systems to develop and manufacture artillery and other defense equipment.

Mahindra Defense Systems and BAE Systems had applied jointly to the FIPB in April 2008 for permission to set up a JV in which BAE Systems would have held 49% of equity and Mahindra Defense Systems the rest.

The Mahindra and BAE JV with a 51:49 would have been a first for the Indian defense sector and it envisaged an inflow of around INR 56 crore. However the cap on FDI in defense production is 26% and probably this was the reason for the proposal to get rejected.

Panel to go into Vizhinjam land acquisition issue

BL cited Mr VS Achuthanandan CM of Kerala as saying that a high level committee headed by the chief secretary would go into complains with respect to acquisition of land for the proposed Vizhinjam International Deep Sea Container Transshipment Terminal.

Briefing newspersons here on decisions taken at a meeting of the State Cabinet on Tuesday, Mr Achuthanandan said that further steps in acquisition would be taken only after examining the complaints.

Being set up at an estimated cost of INR 8,000 crore, the project has been awarded to the Hyderabad based Lanco Infratech in partnership with Pembinan Redzai of Malaysia. To be developed in the BOT mode it has received all clearances from the Centre.

The state government had announced that 1,088 hectares of land were needed for the project in and around Vizhinjam about 16 kilometers from here. Land acquisition had run into trouble with local people raising complaints that the procedure lacked transparency. In another decision, the State Government decided to set up a separate council for the speedy implementation and oversight of the INR 4,300 crore Kuttanad package that aims to ramp up agricultural production.

Mr Achuthanandan said that the ministers for Agriculture and Water Resources would be vice chairmen while other ministers and people’s representatives from the area would make the members of the Council. A separate committee headed by the Chief Secretary as Chairman would be constituted to coordinate and implement the project, which was drawn up by Dr MS Swaminathan eminent agriculture scientist.

Punjab to generate power from biomass

It is reported that private players are set to harness the advantages of biomass in Punjab. It is expected that by the end of next year, they will generate 330 MW from biomass. Their proposed move will not only help in managing biomass in the state effectively, it can also turn out to be a money churner for the farmers, because in recent past the prices of some raw material have risen 5 to 6 times.

Among the major players who are coming up with biomass power projects are Green Planet Energy Private Limited, Turbo Atom TPS Projects Limited, PR Engineering Services, Orient Green Power Limited, Food Fats & Fertilizers Limited, Menakshi Infrastructure Limited etc.

At present the Ambuja Cement plant in Ropar is also utilizing biomass for its captive power plant. The use of biomass has brought respite for villagers around who find it difficult to manage agriculture waste and stock it. The plant is presently using 24 types of biomass at its captive power plant which has installed capacity of 30 MW. Presently it is generating 18 MW for Ropar plant and 4 MW for the Bathinda based Ambuja plant.

Essar Shipping bags safety award

BL reported that Essar Shipping Ports & Logistics Limited was awarded the ‘Safest and Most Environmentally Conscious Indian Shipping Company 2007’ at a ceremony to mark World Maritime Day recently.

The award was presented by Mr APVN Sarma secretary to the government of India, Ministry of Shipping, Road Transport and Highways. The company is receiving this award for the third time.

JSW Steel crude steel production in J-S’09 quarter up by 14% YoY

JSW Steel has posted highest ever crude steel production during the second quarter July to September 2008 and for the first time, surpassed the 1 million tonne mark of crude steel production in a quarter.

The break-up of production is as below.

In million tonnes

While crude steel production went up by 14% over corresponding quarter of last year, the production in the rolled products declined due to

A) Shutdown of long products mill for 17 days in July 2008 for incorporating certain automation facilities at Salem unit to achieve better product quality and productivity.

B) Stabilization of Hot Strip mill at Vijayanagar works following the re commissioning in June 2008 subsequent to modernization and capacity enhancement from 2.5 million tonne per annum to 3.2 million tonne per annum.

The release added that “The rolling mills have now been fully stabilized and are working at optimum capacity.”

JSW has achieved cumulatively 1.976 million tonnes crude steel production in the first half of current financial year 2008-09 showing a growth of 18% YoY.

ArcelorMittal expects higher EBITDA in the H2 of 2008

ArcelorMittal vide a release has l reaffirmed the third quarter EBITDA guidance in excess of USD 8.5 billion.

The release said that “It expects EBITDA as well as cash flow from operations to be higher in the second half of 2008 compared to the record first half of 2008.”

Mr LN Mittal chairman & CEO of ArcelorMittal said "Despite the current financial crisis, the Chinese economic slowdown and the strong destocking taking place on steel markets, we are pleased to expect profitability improvement in the second half of this year".

Recession reports - IMF cuts 2009 growth forecast to 6.9%

It is reported that the International Monetary Fund has revised downwards its growth projection for India by 1.1% point to 6.9% in 2009 even as it has warned of a major global slowdown amid the ongoing financial crisis. For the current year, the IMF has revised downwards its earlier growth projection by 10 basis points to 7.9% in the range of others estimates of close to 8%.

IMF said in the latest World Economic Outlook that “The world economy is entering a major downturn in the face of the most dangerous financial shock in mature financial markets since the 1930.”

The fund projected the global output to up by 3% in 2009, the slowest since 2002 as against an earlier estimate of 3.9% which is also the revised estimate for 2008. Till 2007 global GDP grew at about 5% for four consecutive years and three-fourths of this growth came from emerging and developing economies.

The outlook said that “The economic cycle in emerging Asia started to turn in early 2008 and more weakness is expected ahead in response to slowing demand from advanced economies and growing strains in regional financial markets.”

China’s growth rate for 2009 has also been revised downward by 50 basis points to 9.3%.

For many advanced economies the latest report has projected no growth till the middle of the next calendar year. The US the world’s largest economy is projected to grow only 0.1% in 2009.

Mr Olivier Blanchard chief Economist of IMF in a statement said that countries should use both monetary and fiscal policies in a coordinated manner to come out of the downturn. He said that “With the right macro and financial policies and these policies are available we can ride the storm and expect a recovery to start in the course of 2009.”

The report said that the anticipated recovery in 2009 would be exceptionally gradual by past standards because of worsening financial conditions. Mr Blanchard said that “In advanced countries, the crisis is now being driven by a downward spiral of loss of confidence and trust.”

MEPS latest forecast for steel prices in North America

UK based MEPS said that “Transaction values for all flat products are forecast to decline again this month. Deteriorating economic conditions are likely to cause demand from many end-user segments to weaken further.”

MEPS added that “The addition of the normal winter slowdown could result in extremely low mill order books by the end of the year. Consequently, local producers will, almost certainly, have to reduce offer prices in order to attract increased purchases from customers. However, domestic mills are likely to cut production in order to help buoy steel transaction values.”

MEPS said that “Steel price declines are forecast to continue into the beginning of next year. However, smaller decreases are predicted in the plate category as strong consumption in the rest of the world should limit import quantities into the domestic markets. A modest revival in transaction values is then predicted for the second quarter. Increases in raw material costs in 2009 are likely to encourage the domestic mills to implement price advances. However, we do not envisage another round of substantial hikes due to slower growth rates in steel consumption across the region.”

MEPS added that “Growing weakness in the non residential building sector is predicted to result in lower than normal demand for long products during the fourth quarter. Distributors are not expected to build inventories in the run up to the end of the year. Consequently, sales over the next few months are forecast to be at low levels. This, coupled with a large decline in scrap values, will, almost certainly, force domestic mills to reduce steel selling figures for all long products, particularly for the reinforcement products. Production cuts by some US producers may limit the falls, but are unlikely to prevent the downward trend. Smaller decreases are envisaged for medium sections and beams due to tighter supply in the market.”

MEPS further added that “Deteriorating economic conditions could delay a rebound in steel prices but a modest recovery is anticipated for the first half of next year. A small increase in raw material costs is expected during 2009. Consequently, mills will, almost certainly, attempt to push through steel price advances.”

Gibraltar sells SCM Metal Products to Platinum Equity

Gibraltar Industries Inc announced that it has entered into a definitive agreement to sell its SCM Metal Products subsidiary to an affiliate of Platinum Equity. Terms of the transaction were not disclosed. The SCM transaction is expected to close in the fourth quarter 2008, subject to regulatory approvals.

SCM Metal Products, which is reported in Gibraltar’s Processed Metal Products segment, is a manufacturer of metal powders and pastes for powder metallurgy and related applications, with production facilities at Research Triangle Park in North Carolina and Suzhou in China.

Mr Brian J. Lipke chairman & CEO of Gibraltar said that “The SCM sale, together with our recent acquisitions and the divestiture of other non core assets and businesses, continues to focus our resources and capital on those areas that we believe provide the best strategic fit, improve our growth profile, and will produce the highest returns for our shareholders.”

Gibraltar Industries is a leading manufacturer, processor, and distributor of products for the building, industrial, and vehicular markets. The company serves customers in a variety of industries in all 50 states and throughout the world. It has approximately 3,500 employees and operates 65 facilities in 25 states, Canada, England, Germany, and Poland.

VSA asks to slash export duty on steel ingot to 2%

It is reported that Viet Nam Steel Association has asked the government to further slash the export duty on steel ingot to 2%, following a ministry of finance decision to reduce the tax from the current 10% to 5%.

Under the Decision 84/2008/QD-BTC, steel ingot will enjoy a reduced export tax duty of 5%. According to the ministry of finance, the move was aimed at removing difficulties for domestic steel producers. This is the second steel ingot tax cut in the past few weeks. On September 22nd 2008, the steel ingot export tax was halved from 20% to 10%.

According to the VSA, domestic steel producers, especially steel ingot producers, lack capital and are facing bankruptcy due to the combined problems of lack of demand in the domestic market, and the high tax rate, which prevents them from developing an export market.

Mr Pham Chi Cuong chairman of VSA said that a number of steel producers had been forced to cease production. He added that producers had nearly 1 million tonnes of steel worth roughly USD 1 billion in stock due to decreasing demand.

According to the General Department of Customs, steel producers in the first seven months of the year exported nearly 1.3 million tonnes of steel ingot and steel products, an about face over previous years when steel had to be imported. However, the situation has changed in past months as prices of steel ingot and steel products in the world market are roughly USD 200 per tonne lower than in the domestic market.

Besides the establishment of a fund to buy steel ingot stocks, the VSA also suggested the government provide steel producers and construction investors incentive credit policies to boost domestic steel consumption.

Techint to invest USD 6.6 billion in Mexico despite crisis

Reuters reported that Techint is going ahead with USD 6.6 billion investments in steel and mining in Mexico despite panic in global markets.

As per report, Techint, which controls Tenaris, will spend USD 1.6 billion to expand a steel tube plant in Paolo. The tubes are used by Pemex in their oil and gas installations.

Mr Rocca head of the group said that "The Techint group has confidence in Mexico beyond the turbulence that we are seeing today. the Techint group will invest USD 1 billion over the next five years in iron ore mining projects in the states of Michoacan Jalisco and Colima."

The Mexican currency and stock markets reeled on October 8th 2008 responding to volatile trade in US markets.

He added that the construction of a new flat steel plant in the northern city of Monterrey will cost Techint USD 2.5 billion in its first phase and USD 1.5 billion in a second phase.

Mr. Calderon the president said that "This global crisis, the worst the world has seen in the last 70 or 80 years, will unfortunately have a negative impact on our country, but I want to emphasize that the strength of our public finances will allow us to mitigate the negative impact."

Japanese steel exports in August up by 3.4% YoY

According to reports released by the Japan Iron & Steel Federation, Japan's iron and steel exports totaled 3,299,000 tonnes in August 2008, up by 3.4% YoY from 2007, when their values totaled USD 4,220.09 million, up by 33.9% YoY from 2007. In terms of yen, the values amounted to JPY 456.8 billion, up by 21.8% YoY from 2007.

In the breakdown of the total exports by main destinations, South Korea took 791,000 tonnes, by down 2.8% YoY from a 2007, China 570,000 tonnes, up by 3.1% YoY, Thailand 406,000 tonnes, up by 5% YoY, Taiwan 296,000 tonnes, down by 5.7% YoY and USA 123,000 tonnes, up by 2.6% YoY.

Temporary adjustments at Rautaruukki plants in Finland

It is reported that Rautaruukki's Ruukki Construction division is to temporarily scale back the manufacture of heavy construction structures at the Ylivieska and Kalajoki plants in Finland. Production volumes are being adjusted during the end of 2008 to realign them with slightly lower than anticipated demand for heavy structures in the Nordic market.

Projects currently being tendered for and under negotiation are expected to translate into plant deliveries by the turn of the year or in early 2009 at the earliest.

In this context, employer employee negotiations concerning any lay offs will start within a week. Any lay offs are expected to last three months at the most and apply to approximately 50 persons.

Brazilian steel market still solid but nervous - Report

BNamericas quoted Mr Marco Polo Mello Lopes president of Brazilian steel institute IBS as saying that Brazil's steel market remains solid, although apprehensive, despite the fast global decline of stock markets in recent days.

Mr Lopes said that "There have been no cancellations of orders in the domestic market. So far we have not felt anything resembling a slowdown in demand."

However, he said that he has noticed international prices have started to drop. He added that "The decline in prices is connected to the credit problems among distributors and traders. We have been seeing mills around the world with high inventories. In the absence of credit, these mills are forced to lower prices."

He said that Brazil's market business has gone on normally so far, but that does not mean the market is not bracing for challenges that could arise later. He added that "We have to be cautious with the current state of the economy worldwide. No one has means right now to forecast how intense this crisis is going to be. At this time, we are not making any revisions. We are waiting for the dust to settle to see if we are going to make any alterations."

Recession reports - Japanese stocks see steepest decline in 21 years

Bloomberg reported that Japan's stocks rallied from the steepest drop in 21 years, led by steel and trading house shares, as investors took advantage of the decline to buy shares trading at the cheapest valuations on record.

Nippon Steel Corporation rallied 6.8% and Mitsubishi Corporation gained 7.4%. Both stocks fell 12%. Aeon Co led retailers lower after reporting a drop in profit due to weak consumer demand.

The Nikkei 225 Stock Average rose 89.21 points or 1% to 9,292.53 points. The broader Topix index gained 14.79 pints or 1.7% to 913.79 points.

Nikkei plunged 9.4% to 9,203.32 points for its third biggest drop on record and the Topix index slumped 8% to 899.01, the steepest fall in 21 years. Shares on the Topix index traded below book value yesterday for the first time since at least 1989, indicating the liquidation value of assets is greater than the company's ongoing business.

Rautaruukki to improve production capacity in Europe

Rautaruukki's Ruukki Construction division is to improve production efficiency and optimize production capacity and logistics in the central eastern European region as a part of Rautaruukki's new corporate wide operational excellence program.

In the Czech Republic, the smaller profiling unit at Ostrava will be closed and the machinery will be gradually relocated to Ruukki's bigger plants in Hungary, Poland and Romania by the end of the first quarter of 2009. Employer employee negotiations at the Ostrava unit will start soonest and affect 81 people. The Ostrava unit has been located in rented premises since 2002. In future, roofing and cladding profiles for the Czech and Slovak markets will be delivered from Hungary and Poland.

In Poland, a profitability program has been launched at the Oborniki steel frame and sandwich panel plant. The 9 month program will enhance processes and aims at a significant improvement in the plant's earnings performance. Detailed actions will be specified as the program progresses.

These actions are being taken with the aim of an annual improvement in Ruukki Construction's operating profit of more than EUR 3 million starting in 2009.

Colombian steel output to hit 2.2 MTPA in H2 of 2009

BNamericas quoted Mr Juan Manuel Lesmes executive director of national steel association Andi Fedemetal as saying that Colombia's steel production will reach 2.2 million tonnes per annum in the second half of 2009.

Mr Lesmes said that expectations of reaching that figure are based on projects that are in the works. He added that "These are all short-term projects that make us believe we can double the production we registered in 2004 by the middle of 2009."

He said that the projects in question include a new 500,000 tonnes per annum plant being built in Tocancipa city by Diaco, the local subsidiary of Brazilian giant Grupo Gerdau. He added that "It won't produce that much immediately, of course. That is in the mid term."

Mr Lesmes said that another project that will help boost output is plant expansion and a program to improve steel quality underway at Acerías Paz del Río, the Colombian subsidiary of Brazilian group Votorantim. He also mentioned plans at Sidenal's shredding plant, where the company is negotiating to obtain a new furnace, and an expansion at the company's Sidenor steel plant.

According to figures by Latin American Iron & Steel Institute, Colombia churned out 843,500 tonnes of crude steel and 229,800 tonnes of primary iron in the first eight months of 2008. Colombia's apparent consumption is 3.1 million tonnes per annum and the country imports 1 million tonnes per annum of steel, of which 80% is in rolled steel and steel coils, mainly from Brazil, Venezuela, Mexico, China, Japan, Russia and the Ukraine.

Japanese scrap steel plunges by 14% as won plunge cuts Korean demand

Bloomberg reported that Japan's scrap iron and steel prices dropped for the first time in four weeks after a decline in the won reduced demand from South Korean mills.

Japan Ferrous Raw Materials Association said that the average H2 grade ferrous scrap price sank 14% WoW to JPY 38,620 a tonne in the week ended October 10th 2008 from the previous week. The won fell as much as 5.1% to the lowest in a decade against the dollar.

Mr Sakio Norita director at Mitsui Bussan Metals Co said that "We had thought prices would pick up if Korean demand resumed, but this is very unlikely since the Korean currency plunged, making Japanese scrap more expensive for them.''

Scrap, the key raw material for mills that use electric arc furnaces, is resuming a slump as a cut in imports by South Korean mills and a construction slowdown in Japan slashes demand for ingredients to make steel. The raw material has dropped 43 percent from the record set in mid-July and is selling for about a fifth less than average for the past year.

The Japan Ferrous Raw Materials Association calculates the average scrap iron and steel prices using figures from Tokyo, Nagoya and Osaka, the country's main cities, for export and domestic customers.

AMG Acquires 100% of Furnaces Nuclear Applications

AMG Advanced Metallurgical Group NV announced that its engineering systems division has acquired the remaining 50% of its nuclear JV Furnaces Nuclear Applications Grenoble SA for approximately EUR 3 million.

FN was formerly a JV with a privately held French company. AMG will now consolidate these operations under the Engineering Systems Division.

Furnaces Nuclear Applications Grenoble SA designs and produces sintering systems for a number of nuclear applications. As previously announced, FN was recently awarded a contract with Shaw Areva MOXServices LLC for the detailed engineering of two sintering furnaces for the Shaw Areva MOX Fuel Fabrication Facility at the Savannah River Site, in Aiken, South Carolina, USA. These vacuum type sintering systems will be used in the production of mixed oxide uranium and plutonium nuclear fuel for light water reactors.

In addition to its sintering systems for nuclear fuels and the contract with Shaw Areva MOX Services LLC, Furnaces Nuclear Applications Grenoble SA has the world's leading vacuum furnace engineering team specializing in nuclear technologies. AMG intends to use FN as a platform for its further expansion into the growing nuclear energy field.

Sheet steel price becomes cheaper in Tokyo

JMB reported that steel sheet market price became cheaper around Tokyo. Dealers and coil centers turned to weak stances when the demand weakened due to slower shipment in and after August 2008.

Another factor is sharp decline of steel sheet import price from China and South Korea when Asian steel market price stays low. Sheet steel market price is JPY 103,000 to JPY 104,000 per tonne for hot rolled flat steel, JPY 104,000 to JPY 106,000 for pickling steel and JPY 113,000 to JPY 117,000 for cold rolled steel sheet around Tokyo. These prices decreased by JPY 1,000 to JPY 2,000 per tonne from the end of September 2008.

Mr Sakari Tamminen reelected to WSA executive committee

It is reported that Mr Sakari Tamminen president & CEO of Rautaruukki has been re elected to serve on the World Steel Association's board of directors' executive committee for 2008-09. Mr Tamminen was first elected to the executive committee a year ago and has been on the board of directors of World Steel since 2004.

World Steel Association is one of the largest industrial organizations in the world. It represents steel producers, national and regional steel industry associations and steel research institutes. World Steel members produce around 85 per cent of the world's steel.

Rautaruukki supplies metal based components, systems and integrated systems to the construction and engineering industries. It has a wide selection of metal products and services. Rautaruukki has operations in 25 countries and employs 14,990 people.

Recession reports - SA manufacturing growth slows down in August

It is reported that South Africa's factory output growth slowed to 0.4% YoY in August 2008 and shrank 2.1% on a monthly basis, pointing to pressure from higher interest rates and waning confidence.

Statistics South Africa said that annualized growth eased from an upwardly revised 3.5% in July 2008.

Analysts said that the data confirmed the economy was under strain from past interest rate hikes that were designed to tame inflation, despite a weaker currency. They added that "It is worrying that despite a weaker rand, manufacturing still remains under a lot of pressure and a lot of it could have something to do with business and consumer confidence weakening. This is not nice manufacturing is about 16% of GDP so this is a worrying signal."

Growth for manufacturing, the country's second biggest sector, rebounded to 14.5% growth in the second quarter of 2008 after contracting in the first quarter on the back of a national electricity crunch. But higher interest rates have hit consumers and businesses, evident in falling retail and new vehicle sales.

Stats SA said that manufacturing volume growth was 0.2% lower in the three months to August compared with the previous three months, also on a seasonally adjusted basis.

Mr Connelly elected to board of directors of Tube City IMS

Tube City IMS, a service provider to steel mills and foundries throughout the world, announced that Mr John J Connelly has been elected to the company's board of directors.

Mr Connelly retired as senior VP strategic planning & business development from United States Steel Corporation in February 2008 after a long and distinguished career.

Mr I Michael Coslov chairman & CEO of Tube City IMS said that "We are excited and pleased that Mr John has agreed to join our board of directors. Mr John has a tremendous wealth of experience in the steel industry, both domestically and internationally, and will add great value to our board and to our company."

Tube City IMS is a leading provider of outsourced steel services, including raw materials procurement, scrap management, raw materials optimization, slag processing, metal recovery and surface conditioning to integrated steel mills, mini-mills and foundries. The Company, headquartered in Glassport, PA, has operations at 75 plants throughout the United States, Canada, Europe, Mexico, the Caribbean, South America and Asia.

Asian steel producers see further drop in steel prices

Mr Pipat Preedawipat president of Thailand's largest steel plant Lao Peng Nguan said that steel prices are expected to drop in the fourth quarter of 2008 and continue their slide into 2009 as demand from automakers and builders drops.

Mr Preedawipat said that demand for steel in the Asian market has dropped after the Olympics. As a result, steel prices are expected to drop significantly at 510% in the last quarter of 2008 into next year. This is likely to have a positive impact on the cost of building high rises, which need significantly more steel to construct.

Earlier, Nippon Steel and Baoshan Iron & Steel led a decline in Asian steel producers' shares on concern that demand from automakers and builders will drop amid a global credit crunch and economic slowdown.

The MSCI Asia Pacific Index is headed for its lowest close since 2005 as the global credit crisis deepened in Europe and the United States lost the most jobs in five years. US auto sales last month had their biggest decline in 17 years and Chinese mills have cut prices and output on slowing domestic demand.

JANA Partners discloses 5.7% stake in Hayes Lemmerz

It is reported that, in a 13G filing on Hayes Lemmerz, JANA Partners disclosed a 5.7% stake in the company. JANA held a 4,509,248 share stake in HAYZ at the quarter ended June 30th 2008. A 13G filing indicates a passive investment.

Hayes Lemmerz International Inc designs, manufactures and distributes fabricated steel and cast aluminum wheels for automotive original equipment manufacturers and the automotive aftermarket.

Mebati unveils price of KES 2 billion eight year bond issue

Mabati Rolling Mills has unveiled the price of a KES 2 billion bond issue. Investors holding this debt instrument will realize a return at the rate of one per cent above the prevailing interest on 8 year Treasury Bond for a fixed rate coupon. While those holding floating rate coupons expect a yield of 1.75% above the prevailing 182 day Treasury Bill rate.

MRM enters the bond market at a time when the Nairobi Stock Exchange bourse is subdued with fund managers and investors shifting from the equity to debt market. It also comes in when rising inflation has hit the bond market, leading to negative returns.

Mr Odhiambo Ocholla head of Suntra Investment Bank said that "With prevailing high inflation rates, at 27.6% for August 2008, this has eroded returns on bonds, currently pegged at between 11% and 15%."

Mr Satish Sawhney CFO of MRM said that "We intend to double our production capacity from 100,000 to 200,000 units and make new investments, including a new aluminum zinc coating line."

This 8 year tenor corporate bond will mature in October 27th 2016 with the period of sale running from October 6th to October 22nd 2008. Investors can apply for a minimum of Sh1 million. The steel maker’s KES 2 billion bond joins other issuers in the debt market including Preferential Trade Area Bank with KES 1 billion, East African Development Bank with KES 800 million, Athi River with KES 800 million, Shelter Afrique with KES 500 million, Faulu Kenya with KES 500 million and Barclays with KES 3 billion.

Other entries into the corporate bond market are Sasini Tea and Coffee and Investment & Mortgage bank, who have all come into this market to raise funds.

The arrangers of the Mabati Rolling Mills notes are CFC Stanbic Bank, CitiBank and Standard Chartered Bank. The lead sponsoring stockbrokers and placing agents are CFC Financial Services and Dyer and Blair Investment Bank while the fiscal agent and registrar is CFC Stanbic Bank.

22 ArcelorMittal Liberia employees leave for training

It is reported that twenty two successful employees of ArcelorMittal that were selected to travel to South Africa for advance training have finally departed Liberia.

Recently, Mr Joseph Mathews CEO of ArcelorMittal Liberia said that it was sending the twenty two Liberians, all males to South Africa to build their capacity, stressing that the company does not believe in bringing to the country expatriates to perform jobs that Liberians are capable of doing.

Mr Mathews maintained that those Liberians were traveling to South Africa for six months and may extend to Canada with different groups of Liberians to equally benefit from the scheme.

And true to that, on October 1st 2008, the twenty two Liberians who successfully passed a test administered by the company among various departments which include locomotive, electricians, and welding departed Liberia via the Roberts International Airport for South Africa.

Mr Teah spokesman indicated that things are gradually improving in Yekapa and Buchanan as the have put in place free education, medication, and transportation system for both workers and their dependents. He added that "We want to thank the government of Liberia headed by Ms Ellen Johnson Sirleaf and ArcelorMittal CEO for such a bold step as it is dreams come true."

Mr Henry D Williamson communications and government liaison officer at ArcelorMittal, who headed the team of trainees to South Africa, said that the company sometimes ago promise to train Liberians so that they can return home and be better qualify and capable of doing the work assign to them.

Mr Williamson pointed out that the twenty two employees were not hand pick as they all have initial experience in their various fields of specialization. He added that "It is unfortunate that we do not have a female on the trip when Liberians are now talking about gender equity but the process of recruiting females have begun for the next group which will either be traveling to South Africa or Canada for similar or other training."

ArcelorMittal Liberia is also equipping young Liberians to acquire the requisite skills that would be of benefit to them and their families after the company may have departed Liberia.

Texas regulatory staff proposes new retail power provider rules

Platts reported that Public Utility Commission of Texas staff has proposed new rules that would strengthen the financial requirements for retail electric providers, as well as technical and managerial requirements for REPs, several of which defaulted this spring.

PUC staff said that its proposal would permit REPs to qualify financially in one of two ways. Tier 1 applicants would require an investment grade credit rating or tangible net worth of more than USD 100 million, while Tier 2 applicants would require lower financial requirements if the REP has successfully operated in the market for a period of time.

Existing REPs would be given one year to come into compliance with the proposed rules. There are some current REPs that may be unable to qualify under the proposal. Nevertheless, as evidenced several times since the market opened in January 2002, undercapitalized REPs have been unable to meet requirements when wholesale electricity prices have risen sharply.

REP defaults have caused tens of thousands of customers to be transferred to providers of last resort and caused significant financial loss and confusion to customers, causing some to lose confidence in the market. The proposal also would require REPs to meet higher technical and managerial standards.

The PUC has issued REP certificates to about 130 electricity retailers, including about 30 small businesses. REPs, consumer groups and other interested parties have 30 days to comment on the proposal and to ask the commission to hold a public hearing on the matter.

Furukawa Sky Aluminum concerned on cost impact on H1 profit

Mr Masateru Yoshihara president of Furukwa Sky Aluminum Corporation has described the firm's strategy to strengthen its profitability by reorganization of domestic plants, capacity expansion at overseas plants, price hike or cost cut efforts.

He explained that there is a negative impact on the firm's consolidated recurring profit for the first half fiscal year by around JPY 10 billion as compared with the originally target along its mid term management plan. The impact includes JPY 6 to JPY 7 billion caused by depreciation, higher fuel and substantial material costs

OPEC may cut oil output at below USD 80

Reuter reported that OPEC is unlikely to cut output at its meeting in December unless the price for crude produced by its members falls below USD 80 a barrel.

The price for OPEC’s basket of crude stood just above that threshold at USD 80.04 a barrel. US crude which trades a few dollars higher than OPEC oil, slid to a 10 month low on concern that the international financial crisis would have a major impact on demand for energy.

The sources said that “The price is still reasonable. If it stays where it is then OPEC will stick to the output levels decided at the last meeting. I think if it falls below USD 80 OPEC will do more.”

Several members of the Organization of the Petroleum Exporting Countries have voiced concern about demand and the falling price. Nigeria was the latest on Wednesday with its minister saying that OPEC may need to intervene to balance markets.

The OPEC source said that “Those are the non Gulf countries, this is their usual concern.” Core Gulf Arab OPEC members typically base their budgets on more conservative oil price expectations.

Corus Middle East supplies structural steel to Tornado Tower

Money Control reported that the 52 storey QIPCO Holding Tornado Tower is soaring daily towards its November 2008 completion date thanks to 60,000 square meters of ComFlor flooring and 2,724 tonnes of structural steel beams, supplied through Corus International Middle East’s Jebel Ali office and warehouse.

Once completed the 200 meter high Tornado Tower will rise above Doha’s premier business district offering spectacular views of the city and Arabian Gulf. The final structure will provide 58,029 square meters of leasable office space plus 1,700 car parking spaces on 3 levels and feature sixteen high speed passenger lifts plus a helipad located on the 51st floor.

A key feature of the design will be a spectacular lighting system designed by Thomas Emde which will illuminate the steel façade using a combination of 35,000 different lighting configurations to further enhance the hyperboloid structure of the tower.

Mr Haydar Ibrahim of Corus Middle East said that “The Qipco Holding high rise development package was won after Corus worked together with specialist steel consultants Meinhardt based in Singapore who undertook the value engineering on the steel design. Demonstrating the weight saving performance benefits of our composite floor panel system ComFlor over and above the concrete alternatives, Dubai based contractors Six construct needed little further convincing that ComFlor® 80 was the solution to this design.”

Mr Ibrahim added that “As Corus International we could offer the client a complete solution package the products, floor decking and structural steel as well as our technical expertise on steel construction. Our efficient supply chain saw the 60,000 square meters of ComFlor 80 manufactured on site at Jebel Ali from where it was supplied complete with all accessories, screws, straps and edge trims by truck one floor at a time to the subcontractors fabrication factory in Doha where JIT delivery helped further realize a more cost effective build program. The structural steel was sourced through Corus International from Taiwan, Thailand and Japan.”

ComFlor developed by Corus Panels and Profiles is manufactured from high grade 450 steel and tested for both composite action and fire resistance for full slab assembly to ensure it meets all international standards. The ultimate in lightweight steel decking, its strength and durability provide exceptional long span capabilities, meaning column free office space can be realized offering no obstruction to the view. It also facilitates speed of construction to generate significant savings in the overall construction costs.

The Tornado Tower is situated in the district of West Bay an almost entirely man made peninsular where within the next 5 to 10 years a whole development of high rise buildings is planned for this area representing the rapid economic growth of Qatar.

Turkey to go ahead with Iranian gas deal

Reuters cited Mr Hilmi Guler Energy minister of Turkey recently said that the country would push ahead with a planned deal to produce and export gas from neighbouring Iran saying cancellation of the deal was out of the question.

Turkey and Iran failed to conclude expected energy accords during a visit by Mr Mahmoud Ahmadinejad President of Iran to Turkey in August. The United States which is seeking to isolate Tehran over its nuclear program opposes the plan.

Mr Guler said that "It is out of the question that the natural gas deal with Iran will be suspended. I will go to Tehran to sign it when the text of the deal is ready."

Mr Guler said that Azerbaijan had agreed to sell extra gas produced in the second phase of its Shakh-Deniz project to Turkey. He said that the government plans to finish off the tender process for Turkey's first nuclear power plant this month and also intends to launch a tender for a second nuclear power station in the Black Sea town of Sinop by the end of this year.

Under the deal Turkey's state owned petroleum company TPAO will explore in Iran's South Pars field and gas will be piped to Turkey for consumption or re export to European markets.

TATA firm to invest USD 12 million in Qatar Science Park

IANS reported that TCE Consulting Engineers a TATA Group subsidiary will invest USD 12 million over the next 5 years in the Qatar Science and Technology Park.

Qatar's local media quoted Mr AP Mull CEO of TCE as saying in Doha that the investment will see development of new engineering solutions to meet environmental challenges. He said that "Buildings account for 40% of energy consumption worldwide, so with the right technology we can make a real difference in this area."

Mr Mull said that that leading universities around the world were developing nano particles which have the potential to bring immense benefit to society, he said that "We want to take the experimental work to the field in close cooperation with Qatar researchers and businesses."

Mr Mull said that TCE investments would initially go into 3 research projects. He said that the first will be on developing software that assists the design of environment-friendly buildings. The tool will determine the optimal use of renewable energy sources, energy-efficient features and locally sourced materials to minimize a building's total energy footprint.

Mr Tidu Maini executive chairman of QSTP said that "TATA has some very exciting expertise in energy and the environment, two of QSTP's strategic focus areas. He said that we are proud to be partnering with them to bring these innovations to life and further grow Qatar's knowledge-based economy."

The second project will study and design a solar thermal plant that will use sunlight to produce steam. The third program will aim at turning university nanotechnology research from around the world into practical engineering application products such as nano fiber building materials, wastewater filters and cladding windows with ultra thin solar cells.

QSTP is home to international technology companies in Qatar and an incubator of start up technology businesses. Established in 2004 as a part of Qatar Foundation a private non profit organization set up to promote education, research and community development the purpose of the science park is to spur development of Qatar's knowledge economy. Among the leading universities that have campuses at QSTP are Carnegie Mellon, Texas A&M and Weill Cornell. ADS, ExxonMobil, GE, Microsoft, Shell and Total are also members of QSTP.

Iranian heavy plate prices still dropping

It is reported that Iran’s heavy plate price is still sliding following the general trend of other flat and long products.

Iran’s domestic price peaked at the beginning of July and has kept falling since then. Now many dealers have stop stocking up in case the price will slide further. The buyers that purchased products in the past three months are all suffering losses to some extent.

Kaavian Steel Company the only manufacturer of plate in Iran has adjusted its prices down sharply in the past few weeks.

(Sourced from Yieh.com)

DGCX concludes largest ever physical settlement

Dubai Gold and Commodities Exchange recently announced that the successful completion of its largest ever physical settlement of gold and steel rebar futures contracts valued at USD 25.20 million by the Dubai Commodities Clearing Corporation.

The settlement involved the physical delivery of 908 kilogram of gold and 40 tonnes of steel rebar for October 2008. The transaction saw participation by prominent banks and industry players of the physical market.

It said that “The transaction is a testimony to the efficient and robust settlement framework provided by DCCC a wholly owned subsidiary of DGCX. It also reinforces the Exchange's position as a secure marketplace used by industry participants to source their gold and steel rebar requirements.”

Mr Malcolm Wall Morris CEO of Dubai Gold and Commodities Exchange said that "The largest ever physical settlement of gold and steel rebar futures reflects the confidence that members and their customers place in DGCX especially during the current climate of economic uncertainty and increased counterparty risk.”

He said that DGCX has evolved into the leading derivatives exchange in the Middle East region. The recently USD 25.20 million physical settlement demonstrates that this is backed by the resilient delivery system of DCCC enabling participants to settle large transactions."

Steel merchants visit KCCI - The Post

It is reported that a delegation of Karachi Iron and Steel Merchants Association under the lead of Mr Haji Ghulam Muhammad chairman, Mr Shamoon Bakir Ali President, Mr Muhammad Ahmed vice president and Mr Muhammad Zubair Gheewala general secretary of the association met Mr Anjum Nisar President of KCCI's in respect of the issues being faced by their association.

The delegation was of the view that if the iron steel flat rolled products be declared as raw material, a revolutionary change may occur in the engineering industries particularly the cottage industries may be developed in the country.

They said that the import duty on iron & steel as raw material should be minimized, penalty on undersize imported iron and steel be abolished by the custom authorities. They were of the view that role of KCCI be effective in ITP issues, representation of genuine members in trade bodies be ensured, the representation of Steel and Iron Merchants Association/KCCI be made on the board of Pakistan Steel Mills and Engineering Development Board.

They added that city District Government Karachi had already allotted a plot of land measuring 75 Acres for storage purpose of Iron and Steel Merchants Association but their request is to the extent of 150 Acres for which KCCI should take the matter with City District Government Karachi and arrange a meeting with the City Nazim Karachi.

The KCCI's chief assured that the delegation that KCCI would support their suggestions for onward submission to the concerned quarters. The chamber chief urged concerned authorities to consider the demands/suggestions of the Iron & Steel Merchants Association on urgent basis. M Siddiq, M Salam, Irfan Dawood and Ch Muhammad Rafiq from Motandas Steel Market along with Saeed Shafiq, Mazhar, Muhammad Kamran Sattar from Tin Plate Market and Khalid Mustafa Kamal from Malir Steel Market also particip

Mubadala and Veolia Water set up JV

Mubadala Development Company and Veolia Water have signed agreements to create a JV that will focus on water production and waste water collection and treatment in the Middle East and North Africa region.

This announcement follows a decision by Abu Dhabi business development and investment company, Mubadala and Veolia Water, the water and wastewater services subsidiary of Veolia Environnement, to work together on municipal concessions and public private partnerships. The company will be owned 51% by Veolia Water and 49% by Mubadala.

This partnership brings together the expertise of a world leader in environmental services with the experience of one of the leading investment and development companies in the region. It marks the first step for long term collaboration between the two companies on future projects.

Mr Waleed Al Mokarrab Al Muhairi COO of Mubadala Development said that “As the region’s economy continues to expand and diversify, high quality infrastructure will underpin its development. As part of this process, Mubadala is creating a diverse and sustainable range of businesses in the utilities sector by bringing new technologies, efficiencies and best practices to the region. Establishing partnerships with best in class international companies such as Veolia which has over a century of experience in this field will allow us to do just that.”

He said that “This JV is strategically important for Veolia Water. The tremendous growth in the MENA region in terms of the economy, industry and tourism will require world leading expertise in quality water services, solutions and technologies. Working with a leading investment and business development company like Mubadala will provide further enable us to expand and offer vital infrastructure solutions to suit local needs.”

Abu Dhabi to host energy conference in November

It is reported that the Emirates Centre for Strategic Studies and Research will host the 14th Annual Energy Conference here next month to evaluate the development of nuclear energy in the Gulf.

According to Mr Jamal Sanad Al Suweidi director general of ECSSR, the main purpose of the conference to be held November 24th to 26th would be to evaluate the potential development of peaceful nuclear energy in the Gulf as a viable option to meet the considerable future energy needs of the region.

The conference will first assess the reasons for and implications of the peaceful application of nuclear energy in the Gulf region within the context of energy security, climate change and proliferation risks. As per report, it will also examine the requirements and imperatives of the roadmap for developing a peaceful nuclear capability and the economic viability of the nuclear power option as well as its political and social implications.

The conference will also provide a comparative outlook for the status of nuclear energy in the region by assessing the respective cases of India, Iran, Israel and Pakistan.

Pakistan port imports 12 gantries from China

Business Recorder reported that Pakistan International Container Terminal has imported 12 gantries from China at a cost of USD 24.5 million to enhance its cargo handling capacity.

As per report a ZPMC project vessel carrying two ship to shore gantries weighing 1,200 tonnes each and 10 rubber tyred gantries, docked at PICT. The 2 quayside cranes cost USD 12 million while the 10 RTGs cost around USD 1.25 million each. The new equipment would add to the terminal operator's existing 4 quayside cranes and 10 RTGs.

Cement factory to come on stream in Isfahan

Iran’s ministry announced that Isfahan’s Saruj Cement factory will be inaugurated today with the attendance of the Industries and Mines’ Minister.

Nearly USD 91 million has been spent for the plant construction, EUR 25 million of which was spent on electric and mechanical equipment, installation supervision and engineering services.

The factory has created directly 250 and indirectly 500 job opportunities.

With some 200,000 tonnes of daily output, Iran is the leading cement producer in the Middle East. Cement has the lion’s share of the country’s industrial growth.

Iran now Middle East's leading cement producer

The information headquarters of a conference on the mines and related industries role in Iran’s economy announced that with some 200,000 tonnes of daily output, Iran is the leading cement producer in the Middle East.

IRIB reported that the conference will be held on October 13th by the Ministry of Industries and Mines in collaboration with the Iranian Mines and Mining Industries Development and Renovation Organization. Iran’s cement production capacity is now 60 million tonnes per year compared to the 8 million tonnes of output in 1998.

Launching 8 cement production projects would rise the country’s annual cement capacity to 64 million tonnes by the end of the current Iranian calendar year. Annual per capita consumption of cement amounts to 600 kilogram in 2008 which shows a 278 kilogram rise in 2 years. Cement has the lion’s share of the country’s industrial growth. Across the country, over 50 cement factories are active and more than 40 projects are underway.

Prices for steel and iron ore to drop further - MOC

According to Ministry of Commerce prices for steel products and iron ore in domestic market have slumped, and are expected to drop further in a short term. Industry insiders forecast iron ore price is likely to return to a rational level.

Statistics from MOC show average price of iron ore in September end fell 12.4% from August to CNY 1200 per tonne. Prices in Hebei's Tangshan and Liaoning's Chaoyang lost 11.3% and 15.2% respectively from a month earlier. Besides, diving freight rates knock down iron ore price at ports. 62.5% Indian iron ore was offered at CNY 1000 per tonne at Tianjin Port on September 26th down 23.1% compared with August end.

Insiders disclose along with sliding steel price, iron ore price has decreased by nearly CNY 700 per tonne and may go on sagging.

(Source; finance.sina.com.cn)

Chinese rebar export market quiet and cautious

It is reported that construction steel prices have posted great loss this week. Steel makers have to lower ex works price and export offers as well.

In Shanghai, HRB335 20mm rebar is being quoted at CNY 3900 per tonne; HRB400 grade material is being quoted at CNY 3950 per tonne, down CNY 600 per tonne and CNY 630 per tonne respectively from September.28th. That for commercial wire rod drops by CNY 630 per tonne to CNY 3880 per tonne that for hi-speed material saw a great decrease of CNY 670 per tonne to CNY 3850 per tonne.

Export offers continue to dive, reflecting the substantial drop in domestic market price and weak international market sentiment.

(Sourced from MySteel.net)

Baosteel to scale down stocks in face of weak market

It is reported that at the heels of production cuts of 20% by Shougang, Jinan Steel, Anyang Steel and other large sized makers based in North China, Baoshan Iron & Steel Co also called to literally scale down the steel stocks in a meeting October 7th 2008.

According to the latest report of CISA, Wuhan Steel and Tanggang have reportedly joined the cut list, while Shagang and Baosteel are also considering amid spiking inventory, tight iron ore supply and falling steel price ever since July.

Ma Guoqiang deputy GM said that in midst of the complicated situation Baosteel must make an on the button estimate for the fourth quarter and push down the stocks. CISA monthly report showed that the Chinese steel mills' stocks, including Baosteel's, have positioned grimly high, needing a control of output to ease it up.

Mr He Wenbo the group's GMr who stressed production of exclusive and high end products and safe liquidity said that "In face of the big challenges, we must believe Baosteel can make the best performance in China. But Baosteel officials did not mention production cuts on the meeting.”

Mr Xu LeJiang the group's chairman also reminded to pay attention to the harsh situation and strengthen system operation capability by reducing costs and increasing efficiency. "Amid the overall surplus and unbalancing supply and demand, the steel industry would witness more fierce competition in future, which has actually staged.”

Some experts said the domestic steel market may get rid of the sagging trend and go on a high track with vibrations, good to alleviate the producers' woes. Due to continuous tight supply of steel materials, the producers are unlikely to chop October ex-factory price.

(Source: China Securities Journal)

EU issues notice on AD duty on China origin silicon metal

EU has announced on October 7th that the anti dumping measures on silicon metal from China would expire on March 5th 2009.

Community producers may submit a written request for a review at any time from the date of the publication of the present notice but no later than three months before the expiry date. The product under consideration is silicon metal originating in China, classifiable within CN code 2804 69 00.

EU initiated anti dumping investigation into China-origin silicon in 1989 and made affirmative determination in 1990. It determined to continue the anti dumping duty in two reviews thereafter. So far the duty has been imposed for 18 years.

(Sourced from MySteel.net)

Iron ore price negotiations - Vale to meet Chinese steelmakers

Bloomberg reported that Cia Vale do Doce, the world's biggest iron ore producer, plans to meet with Chinese steelmakers next week to ask for a second price increase this fiscal year.

Mr Shan Shanghua secretary general of the China Iron & Steel Association said without elaborating that a vice president of Vale may attend the meeting in China.

He said that “The inventories and domestic mined ores are enough for us to keep mills running now. Vale has stopped loading ore with 64.5% iron content and above to China. If the talks stall, we reserve the right to determine legal responsibility.''

However, Ms Fatima Cristina Vale spokeswoman said in an e-mail that the company does not discuss commercial policy through the media.

According to the report, although long term contracts with Chinese mills were signed, the parties negotiate prices every year. Vale settled pricing for 2008 with Japanese and Chinese steel mills in February.

Chinese steel market plunges with price collapses

It is reported that domestic price of major steel products continues dropping and is struggling at its bottom line following October 6th, the first workday after the National Holiday. Market participants are all flurried to future.

Shanghai HRC price plunges CNY 200 per tonne to CNY 3930 per tonne closing the deal at the limit down in electronic trade the second time successively. Beijing construction steel price caves with rebar price falls CNY 180 per tonne to CNY 4250 per tonne wire rod price dives CNY 120 per tonne to CNY 4130 per tonne.

On the one hand, steel output released simultaneously in advance contributes the crash of HRC price partially, on the other hand, dull housing market also generates the collapse of steel construction price indirectly.

(Sourced from MySteel.net)

Handan Steel slashes steel prices

It is reported that Hebei based Handan Steel cuts prices for some steel products notably, on the basis of prices released on September 28th.

As per report, Handan Steel slashes prices by CNY 320 per tonne for wire rod, CNY 180 per tonne for rebar and round bar, CNY 400 per tonne for common carbon medium plate and CNY 180 per tonne for angles and channels.

Latest EXW prices
1. CNY 4280 per tonne for 6.5mm high speed wire rod
2. CNY 4780 per tonne for HRB335 12mm rebar
3. CNY 4680 per tonne for 14mm rebar
4. CNY 4580 per tonne for HRB335 16mm to 25mm rebar
5. CNY 4620 per tonne for 16mm to 25mm round bar
6. Q235B 8mm medium plate is now quoted at CNY 5330 per tonne
7. Q235B 14mm to 25mm medium plate at CNY 4850 per tonne
8. Price for Q235 7-9# angle is offered at CNY 4720 per tonne
9. For 8-10# channel at CNY 4750 per tonne

Prices listed above are INCLUSIVE of 17% VAT effective as of October 8th.

(Sourced from MySteel.net)

Baosteel steel export down by 26% in 8 months of 2008

It is reported that figures from Shanghai Customs show that Baosteel has witnessed its steel export down 26% in the first eight months of this year, with export values up nearly 6%.

As per report, to promote industrial consolidation and upgrading, Beijing has scrapped most steel products' export rebate since last January and imposed duties on the shipment of some high energy consuming and low value added products.

However, Baosteel has been little impacted by the move. As the top steelmaker in China, Baosteel boasts stable overseas market, with the high value added steel products export occupying 65% of the total shipment.

The mill has adjusted its product mix, further improved the export ratio of high value-added products like flats and oil well pipe. The export ratio of its CR steel pipe/tube and CR coil will see 46% and 17% increases respectively for this year.

(Source: Shanghai government)

Tonghua Steel produces CRNGO

It is reported that Jilin Tonghua Steel Cold Rolled Sheet Co Ltd entered a stage of test producing cold rolled continuous annealing non oriented silicon steel.

The project, which started construction in August 2007 and is due to be commissioned on December 28 of this year has a design capacity of 400,000 tonnes per year with a total contract value of CNY 38.88 million.

The facilities include two continuous annealing machines and the No 1 and 2 recoil package machines.

Beitai Steel produces X60 HRC

It is reported that Beitai Steel firstly got the X60 steel strip for oil & nature gas conduit pipe use through its 1780mm HR lines, another breakthrough in the pipeline steel production after its X42 strip for the same use successfully rolled in July.

As per report, during the development process, the mill applied more refined arts than before to ensure each performance index in line within the qualified tether.

(Source: China Metallurgical News)

Dazhou Steel BF project gets government support

It is reported that National Develop and Reform Committee has expressed its support for Dazhou's 1260 cubic meter blast furnace project. And it has been listed in the national's key projects club for post disaster reconstruction.

As per report, with expected investment of CNY 496.8 million the project will render incremental output of 1.25 million tonnes per year of steelmaking pig iron, 1.2 million tonnes of high strength anti earthquake rebar and good quality building steel products per annum After it completes and incremental annual sales revenues, value added tax and profit would reach CNY 4.326 billion, CNY 76.2 million and CNY 163.9 million respectively with 300 working positions will be supplied each year by then.

(Source Dazhou Government)

Shanghai customs supporting Baosteel

It is reported that under the combined influence of rising international iron ore price and domestic macro control, Chinese steel makers' production costs climbs up during recent years. In order to back up Baosteel, Shanghai Customs further facilitate customs clearance for the steel makers' goods.

Driven by violent capacity expansion in domestic steel industry, China became a net steel exporter for the first time in 2006. However, the problem is that the capacity is dispersed over more than 4000 enterprises. Total outputs of top 10 steel makers only account for 35% of the nation's steel outputs during the first half of 2007. There is still a certain gap between the goals of reaching proportion of 50% in 2010.

In order to promote the industry's combination and upgrading by limiting exports, Chinese government published to cancel the export rebates for most steel products and even impose certain export duty as well as implement export license system on some high energy consuming and low added value products from Jan 2007.

A senior official from Baosteel Group said that Chinese government's macro control had little influence on Baosteel as exports of high added value products took up about 65% of the steel maker's total steel product export. And the steel maker had already adjusted its production to further raise export ratio of sheet/plate products and other high-added value products, like oil well pipe. The export of CR steel pipe and CR coil would be lifted up by 46% and 17% respectively.

In order to meet Baosteel's rising demand of customs clearance for high added value products, Shanghai Customs takes several steps. Both parties set up cooperation mechanism. Shanghai Customs has a detailed knowledge of Baosteel's requirements in terms of customs clearance and offers personalized service to the steel maker.

(Sourced from MySteel.net)

Zhanjiang Steel project to complete research design

It is reported that Zhanjiang steel project, owned by Baosteel group as a second pioneering work sees a significant progress in near past.

The group revealed recently that the research design work on the feasibility of the over 10 million tonnes per year project is to be completed on time to the general plan at the middle & latter of this November.

Mr Zhao Ku deputy GMr of Baosteel noted a group of new steel projects are being put up in China, though indicating a drastic competitiveness. The top mill is to build Zhanjiang steel base as the most competitive steel enterprise. In the initial design period, the company aims at the operating style of choice product & large scale, paying close attention to issues like environment protection, recycling economy, independent integration of facilities and the rate of the large equipment made in China.

(Source: www.chinanews.com)

Xiangtan Steel in strategic pact with Changjiang Jinggong

It is reported that Hunan Valin Xiangtan Iron & Steel Co has inked a strategic cooperation agreement with Changjiang Jinggong Steel Structure Co Ltd on September 30th and the latter will use Xiangtan steel made flats in the A-bid stage construction of Shenzhen Securities Edifice.

Changjiang Jinggong has steel structure processing capacity of 0.47 million tonnes per year with the figure expecting to break 0.5 million tonnes this year; 60% of which is wide plate, with the remaining is medium plate and steel tube and pipe. Xiangtan Steel's wide plate production will reach 3 million tonnes in 2008 and 5 million tonnes by 2010.

As per report, the two sides have experienced normal cooperation before, and the current link up would help improve both markets competitiveness. Meanwhile, water land transport condition will also bring convenience for Changjiang's purchase and distribution from the steelmaker.

(Source China Metallurgical News)

Tianlian to build natural gas pipelines - Source

According to a source, Tianjin Tianlian Public Utilities Co Ltd will invest more than CNY 200 million to build two natural gas pipelines in its home city.

The source told Reuter that the two pipelines in the northern port city of Tianjin will add 1 billion cubic meters of gas supply to Binhai, a development zone modeled on Shanghai's eastern Pudong and housing multinationals from Airbus to Motorola. He said that the investment will be financed by the proceeds from a sale of new shares. In March, Tianlian completed selling new shares in Hong Kong to raise HKD 323 million.

Tianlian executives have told Reuters gas sales are expected to hit 2 billion to 3 billion cubic miters annually by 2010 in the fast growing Binhai area, located some 200 kilometers from Beijing.

Chinese ferroboron price remains steady

It is reported that at present, Chinese domestic ferroboron price remains quiet.

FeB20C0.1 is quoted at around CNY 30,000 per tonne at Liaoyang Port, FeB20C0.05 at CNY 65,000 per tonne, FeB17C0.5 at CNY 24,500 per tonne, low aluminum ferroboron of FeB19C0.5 at CNY 27,500 per tonne and ultra low aluminum ferroboron of FeB19C0.5 at CNY 28,000 per tonne.

Export price of FeB17C0.5 made by Tieling Bomet Boron Alloys stands at around USD 3,800 per tonne FOB at Dalian Port.

According to the analysis from Mysteel.com due to loyal customers and long-term contracts, ferroboron prices remain unchanged recently. Prices change always happens when present contracts are completed and fresh ones are agreed. Although raw materials slip slightly in the current market, electric charges moves up, so unchanged cost helps ferroboron prices keep steady temporarily amid gloomy alloy steel market. Furthermore, the balance of demand and supply also has a great effect on the firm prices.

Mysteel added ferroboron prices, mainly affected by production cost, are seen to go flat in the near future unless cost changes sharply.

(Sourced from MySteel.net)

Chinese steel major may cu production by 20% - Reports

It is reported that China's major integrated steelmakers such as Anshan Iron & Steel Group Corp and Shoudu Iron & Steel Co plan to reduce their finished steel production by 20% each, but it remains to be seen whether they will execute the production cutback for real.

As per report, when the production cutback is actually executed, it will amount to an annual level of 100 million in lost production, having a major influence on local market prices and Chinese integrated steelmakers' purchase negotiations with raw materials suppliers abroad.

There are signs that China's major steel companies have carried out no marked reduction so far of their finished steel production even though their decided production cutback is considered essential to a recovery of domestic market conditions.

China's finished steel production totaled 51,010,000 tonnes in July this year. It is understood that major steel mills accounted for the first 27,940,000 tonnes, while small and midsize steel mills made up the remaining 23,070,000 tonnes. In August, the nation's finished steel production totaled 47,800,000 tonnes down 6.3% from a month ago, with the first 26,770,000 tonnes from major steel mills down by 4.2% from a month ago, and the remaining 21,030,000 tonnes from small and midsize steel mills down 8.9%.

Chalco to float CNY 5 billion mid term notes

It is reported that Aluminum Corp of China, China's biggest aluminum producer, will float CNY 5 billion worth of five year notes on October 16. It is the second batch of mid term notes to be issued by Chalco in 2008.

According to Chalco's announcement, it plans to use 70% of the money raised to repay bank loans and the rest to replenish cash flow. The value date, the date of payment and the date of registration will be October 17. The notes will become tradable on October 20th.

China Chengxin International Co Ltd. gives "AAA" rating for the notes and the company.

ArcelorMittal Krviy Rih output down 10.5% YoY

Reuters reported that Ukraine's biggest steel mill ArcelorMittal Krviy Rih reduced steel output by 10.5% YoY to 5.471 million tonnes in January to September 2008.

As per report, mill had decreased rolled steel output by 12.4% YoY to 4.663 million tonnes so far in 2008, while pig iron output fell by 9.3% YoY to 4.935 million.

ArcelorMittal Krviy Rih raised steel output to 8.103 million tonnes in 2007 from 7.6 million in 2006. It increased rolled steel output to 7.119 million tonnes last year from 6.9 million in 2006.

NLMK may cut production

RBC today cited a spokesperson for the Russian steel producer said that Novolipetsk Steel is not ruling out the possibility of a reduction in its output due to the financial crisis.

The spokesperson said that as a result of the crisis, demand for steel has declined on global markets, the source said, which has primarily affected NLMK's exports to Europe and the US.

The company is now studying market conditions.

At the same time, however, NLMK has not changed the forecast for its 2008 financial results. Earlier, the company announced that its revenue was expected to top USD 13 billion and EBITDA USD 5 billion this year, while production was projected to climb 26% to USD 11.6 million tonnes of steel.

Ukrainian steel sector in critical shape as demand falls

Platts reported that Ukraine's steel sector is in 'critical' shape due to falling demand overseas with urgent measures needed to help the industry weather the crisis.

Mr Vasyl Kharakhulakh head of steelmakers association MetallurgProm said in a statement that "Output fell 19% in August, but in September the situation was simply critical."

According to the report, this development could have an extremely negative impact on Ukraine's economic growth prospects and would immediately increase downward pressure on the hryvnia, the national currency, due to falling steel exports.

According to the State Statistics Committee almost 40% of Ukraine's hard currency earnings come from exports of steel and steel products. Ukraine, the world's eighth biggest producer of steel, has been suffering from declining overseas demand for steel as construction activity slows in reaction to the credit squeeze plaguing international markets.

China to end AD duty on steel

Shanghai Daily reported that China, the world's largest consumer of steel, will end anti dumping duties on cold-rolled coil imports from Russia, South Korea, Ukraine, Kazakhstan and Taiwan.

China imposed the duties on September 23rd 2003.

Mr Prokhorov claims force majeure to halt asset deal with Mr Potanin

Interfax reported that Mr Mikhail Prokhorov has told his former business partner Mr Vladimir Potanin that execution of their agreement on division of jointly held assets has been suspended owing to force majeure circumstances.

According to the report, Interros, which manages Mr Potanin's assets, confirmed the report but offered no further comment.

Mr Prokhorov was to receive Potanin's stake in Polyus Gold about 30%, and Mr Potanin was to get another 2% of shares in MMC Norilsk Nickel as well as a host of other assets. Mr Prokhorov was also reportedly to receive a cash payment of about USD 1 billion.

Mechel announces inclusion of its shares on MICEX quotation list

Mechel OAO announced inclusion of its ordinary registered book-entry shares on MICEX quotation list V.

According to the release on October 9th 2008, MICEX Stock Exchange closed joint stock company approved the inclusion of Mechel OAO ordinary registered book entry shares, state registration number 1-01-55005-E as of April 29, 2003, on the list of securities for trading on the MICEX exchange.

The amount of Mechel OAO ordinary shares issued totals 416,270,745 ordinary shares. Inclusion of Mechel OAO shares on quotation list V provides a significantly larger scope of investors with the opportunity to buy securities of the company.

Mechel OAO ordinary registered shares have been listed on RTS OAO quotation list B since June 29th 2004 and the company’s ADRs have traded on the New York Stock Exchange since October 29th 2004.

Mr Stanislav Ploschenko CFO of Mechel OAO said that “With Mechel OAO shares already trading on the New York Stock Exchange, one of the world’s most prestigious trading floors, the decision to include Mechel shares on the MICEX quotation list confirms the appreciation of the company’s activity and prospects by Russian investors as well. This listing provides the potential for increased liquidity of our securities and additional opportunity for continued implementation of Mechel’s strategic investment program.”

Ukraine gas mining in 9 months up by 0.9% YoY

Ukrinform quoted Fuel and Energy Ministry of Ukraine said that the extraction of natural gas in the territory of Ukraine in January to September 2008 rose by 0.9% on the like 2007 period, up to 15.654,5 billion cubic meters, including natural gas by 1.2% to 14.882,2 billion cubic meters.

Enterprises of national joint stock company Naftogaz of Ukraine reduced gas output in nine months by 0.5% to 14.326,3 billion cubic meters, including natural gas by 0.1% to 13.683,1 billion cubic meters. Other oil and gas mining companies working in this country increased in January to September the extraction of gas by 19% to 1.328,2 billion cubic meters, including natural gas by 18.5% to 1.199,1 billion cubic meters.

The 2007 gas output reduced by 1.2% on 2006, to 20.604,3 billion cubic meters, including natural gas by 1.1% to 19.532,2 billion cubic meters.

Gazprom has no plans to buy back its shares amid crisis

RIA Novosti cited Mr Alexei Miller CEO of Gazprom as saying that Russian energy giant Gazprom has no plans to buy back its stock due to the ongoing global financial crisis. He said that "No, we will not repurchase our shares.”

Mr Miller also said that Gazprom saw no risks for itself in spite of problems on global financial markets, adding that the price of natural gas supplied by the energy giant to Europe hit a historical high of USD 500 per 1,000 cubic meters on October 1. He also said that falls in global oil prices that are currently hovering under USD 90 per barrel would not damage Gazprom's pricing policy.

Mr Miller said "The work of gas sector enterprises is built on different principles and even if something critical happens on oil markets, gas companies always have at least six months to analyze their financial business."

Also in Bishkek, Gazprom signed a memorandum of understanding with the Kyrgyz government to cooperate in the privatization of branches of Kyrgyzstan's national gas supply company Kyrgyzgaz.

Under the document, the parties will comprehensively study the issue and draft general principles, options and main terms of Gazprom's participation in the privatization of the Kyrgyz government's stake in Kyrgyzgaz equaling 75% plus one share in the company's equity.

Russian refineries could use half of ESPO pipeline oil

Interfax reported that oil refineries in Russia could use half of the oil earmarked for the first phase of the Eastern Siberia-Pacific Ocean pipeline. Initial capacity at the ESPO terminus, the port of Kozmino, will be 15 million tonnes a year compared to the pipeline's capacity to transport 30 million tonnes.

As per report, original plans called for delivering the difference to China on a 67 kilometer branch pipeline. However, the issue of building the branch, from Skovorodino to the Chinese border, remains unresolved. If the branch pipeline issue hasn't been resolved by the time ESPO is ready for startup in late 2009, Transneft believes the extra oil could be delivered to refineries in Komsomolsk and Khabarovsk, which are currently supplied with crude delivered by rail. The officials did not specify the route that crude from ESPO would take to the refineries.

The ESPO pipeline system will ship Russian oil for export to markets in the Asia-Pacific region. The first phase includes construction of an oil pipeline from Taishet, Irkutsk region, to Skovorodino and an oil terminal in Kozmino. Oil will be delivered from Skovorodino to the Pacific coast by rail.

Terms of Gazprom participation in Kyrgyzgaz privatization to be drafted

Interfax reported that Gazprom and the Kyrgyz government have agreed to draft the terms of the Russian gas giant's participation in the privatization of 75% plus one share in Kyrgyzgaz. The agreement is contained in a memorandum of understanding between the Kyrgyz government and Gazprom signed in Bishkek recently.

In the memorandum, the two parties agree to study the issue and draft common principles, potential options and the main terms of Gazprom's participation in the privatization. They will set up a working group within the month that will spend the next two months preparing proposals on mutually beneficial implementation of the project.

The measures will include preparation of a feasibility study concerning the advisability of the project, an independent valuation of the market value of the Kyrgyzgaz stake, and an expert review of the valuation, as well as preparation of a treaty on cooperation in implementing the project.

The memorandum will be valid upon receipt of all necessary permits and approvals. The chairman of Kyrgyzstan's State Property Management Committee and Gazprom Deputy CEO Mr Valery Golubev will be responsible for execution of the memorandum and will be in charge of the working group.

The memorandum was signed by Mr Alexei Miller CEO of Gazprom and Kyrgyzstan's Industry, Energy and Fuel Minister.

Severstal cuts October production in Russian, US and Italian plants

Russian steel major Severstal announced that as a result of slower demand for steel products due to recent changes in global economic conditions, it has decided to reduce production at its steel plants in Russia, North America and Europe for the month of October.

1. In Russia, Severstal will reduce production at its Cherepovets steel plant by approximately 25% for crude steel.

2. In the United States, Severstal will be adjusting production to balance with customer needs to an aggregate of approximately 30% across its facilities.

3. In Italy, Severstal is scheduling October production cuts of 30%.

Mr Sergei Kuznetsov CFO of OAO Severstal said that “We consider these measures to be prudent management in a time of rapidly changing market conditions. We are maintaining close discussions with our customers to support their near-term requirements. Likewise, the Company is communicating with suppliers so that we can optimize the supply chain and keep all stakeholders informed of production levels.”

The release added that “Severstal is reviewing its full year guidance as issued with the Company’s 1H08 results and will update the market in due course.”

Valin Steel denies report of stainless steel project startup

Hunan Valin Steel Co Ltd, in which ArcelorMittal holds a 29.48% stake said in the bulletin released that the Hunan Valin Xiangtan steel's stainless steel project only stays in the intent letter period, but not under construction.

However in the bulletin, Valin steel clarified that the letter is only a preparative for acquisition of land used for building not a confirmed project. Its board has not made any formal decision, and a final decision will not be made this year. Approval form shareholders and relevant authorities will also be necessary.

The steelmaker emphasized that the figures mentioned by the media on September 19th are just pro forma number in the letter, which hasn't been confirmed yet.

On September 19th 2008, it was reported that a strategic cooperation agreement between Hunan Valin Xiangtan Iron and Steel Co Ltd and The Xiangtan Government has been inked with the former to pour CNY 9 billion to build 700,000 tonnes per annum stainless steel and longitudinally welded pipe production lines in local. The estimated annual production value will reach over CNY 13 billion.

Listed Hunan Valin Steel Co Ltd owns 94.52% stake of Hunan Valin Xiangtan Iron & Steel Co Ltd.

MEPS latest forecast for EU average stainless steel prices

UK based MEPS said that “Stainless selling figures are forecast to decrease further in October. Declining nickel costs, together with large drops in scrap values will, almost certainly, push alloy surcharges for austenitic grades lower. Basis numbers are also expected to sustain negative pressure in the short term.” MEPS added that “Consequently, transaction prices are likely to continue on their downward path through the fourth quarter. This is not good news for distributors and stockiest as this would cause the value of their inventory to reduce. Therefore, distributors are expected to limit purchases, especially with year end financial reports drawing near.”

MEPS said that “As predicted, the monthly average nickel price declined during August and continued to slide significantly in September. A sizeable decrease in austenitic alloy surcharges is, therefore, anticipated for October and November - exacerbated by large falls in scrap costs. Nickel inventory levels held in LME warehouses soared to a nine year high as consumption from the stainless steel industry dropped considerably over the summer break. Nickel values are forecast to decline further in the short term as demand remains low. Deteriorating economic conditions could cause an even sharper correction. A seasonal upturn in consumption is expected during the first quarter of next year. This is likely to result in a modest revival in nickel prices. However, we believe cash figures will remain below $US20000 per tonne over the forecast period due to a lack of confidence in the market.”

MEPS added that “Stainless transaction prices are predicted to stabilise by early next year, with values for type 304 cold rolled coil slipping below €2300 per tonne and grade 316 prices. Credit restrictions should ease early in 2009. Customers will then be re-assessing their stock levels. However, recent nickel price falls, coupled with economic uncertainty, may cause both distributors and end-users to remain cautious. Consequently, a large inventory build is unlikely to occur. However, a potential upturn in consumption is forecast to lead to a modest revival in transaction figures during the second quarter of 2009.”

Universal Stainless lowers earnings forecast

It is reported that shares of Universal Stainless & Alloy Products tumbled more than 10% after it cut its third quarter profit forecast in half, citing lower shipments to the aerospace market because of the strike at Boeing.

Universal Stainless also said that it has reached tentative agreement with the United Steelworkers union on a five-year labor agreement covering workers at its Bridgeville plant. Terms were not disclosed.

Mr Dennis Oates president & CEO of Universal Stainless said that "Shipments from our Bridgeville facility were below forecast in September due to production inefficiencies coinciding with labor negotiations."

Universal said it expects to earn 35 to 40 cents per diluted share for the quarter ended September 30th 2008, down from its previous forecast of 70 cents to 75 cents per share. Revenue will come in at USD 57 million to USD 58 million rather than the USD 60 million to USD 65 million previously forecast.

The results include a charge of USD 586,000 or 6 cents per share for moving bar finishing operations from Bridgeville to its Dunkirk plant.

Chinese domestic nickel prices may further slide

Interfax reported that China’s domestic spot nickel prices may further drop to below CNY 100,000 per tonne due to sluggish demand from downstream stainless steel mills and bearish sentiment arising from the global financial crisis.

Baosteel eying stainless steel supplies to GE

It is reported that Mr Xu Lejiang board chairman of Baosteel recently paid a visit to General Electric in hopes of expanding their cooperation.

Mr Xu visited GE and talked with Mr Faith VP of GE China.

Mr Faith introduced their core business, developing trend and so on, and gave high affirmation to Baosteel made products.

Mr Xu hopes further expand their current hot galvanized steel supply scope to the refrigerator panels, Mr Xu also wants to linkup with GE on other steel products like stainless steel.

(Source: http://china.toocle.com/cbna)

Norilsk Nickel maintains Cawse mine suspension

It is reported that Norilsk Nickel is continuing to suspend operations at its Cawse mine in the Western Australian goldfields. The operations at the site were put on hold earlier this year because of the gas crisis.

Norilsk Nickel said that the global economic uncertainty has contributed to a decision to review operations at the site.

Minara Resource still bullish on nickel outlook

Minara Resources said that the outlook for the steel hardening commodity is positive after posting a rise in output for the third quarter. Nickel production from the Murrin Murrin operation in WA during the three months to September 30th 2008 climbed by 14.7% QoQ on the previous corresponding quarter to 7656 tonnes.

Minara Resources reiterated its full year production forecast of 31,000 to 35,000 tonnes, but stressed output would be at the lower end of the range. It said that the nickel market continues to be volatile, but market fundamentals are expected remain sound.

Mr Peter Johnston CEO of Minara Resource said that "Going forward we believe that the nickel market will stabilize and some of our input costs will return to normal levels."

Minara said there had been a significant weakening in the sulphur spot market over the past two months and that the company expected the decline to continue. Minara holds 60% of the Murrin Murrin operation, with commodities trader Glencore International holding the balance.

Japanese SS imports in August 2008 down by 27.7% YoY

According to Japan Iron & Steel Federation, Japan imports 12,072 tonnes of stainless steel products in August of 2008, down by 3.5% MoM as compared with 12,522 tonnes in July 2008 and also down by 27.7% YoY as compared to 16,715 tonnes in August 2007.

Stainless steel companies of Japan have been maintaining the structure to decrease their production but some of mills are going to recover the production. In view of the facts that the production of stainless steel in Japan were unable to expand, the imports of stainless steel products into Japan were sluggish in August 2008.

The quantities of stainless steel products imported from main sources into Japan in August of 2008 were
South Korea – 10,004 tonnes, down by 0.2% MoM
Taiwan – 388 tonnes, down by 50.8% MoM
China – 273 tonnes, down by 53.6% MoM

The imports of stainless steel products from South Korea into Japan in August remained as nearly unchanged from that in July and those from Taiwan and China decreased to half of the imports in July.

The amount of stainless steel products imported into Japan in August of 2008 came to USD 5,277.50 million and the unit price of stainless steel products averaged on imports in August was USD 4,371.69 per tonne, having fallen by 4.6% MoM from USD 4,584.89 in July 2008.

For a reference, Japan imported 16,860 tons of special steel products in August 2008, down by 11.1% MoM as compared with 18,986 tonnes in July 2008 and continued a fall of these prices for the last two months.

Moly Mines secures gas supply for Spinifex Ridge mine

Moly Mines has marked another important milestone towards start up at its Spinifex Ridge mine in Western Australia with the completion of a 6 year gas supply agreement with oil and gas producer Santos.

Santos will supply about 15 tera joules a day of gas for power generation to Spinifex Ridge, beginning in mid 2010 and the agreement is conditional on the achievement of full financing for the project.

The pricing structure of the gas supply has been already reflected in the estimated mine operating cost of USD 7.20 per pound of molybdenum produced.

Despite difficult market conditions, Moly Mines announced last month that it had secured a USD 150 million debt financing facility, which would enable it to continue building the Spinifex Ridge molybdenum project while it works to arrange full project financing.

Commissioning at Spinifex Ridge is scheduled to begin in the second half of 2009. The project contains proven and probable reserves of 451 million tonnes, at 0.05% molybdenum and 0.08% copper and will produce an average of 24 million pounds of molybdenum and 27 million pounds of copper a year, although Moly Mines is already considering capacity expansions.

Australia union threatens strikes at BHPB mine

West Australian reported that a major Australian union is threatening strikes in Pilbara of Western Australia, targeting the world's biggest miner BHP Billiton. The report comes as Rio Tinto Ltd faces a 12 hour strike on Saturday by train drivers at its Pilbara region operations who want to force their employer to negotiate a union deal.

The Australian Workers Union said “It strongly favors strike action to force mining contractor Henry Walker Eltin to reverse its opposition to a union deal for its workforce at BHP's key Yandi site.”

Mr Stephen Price secretary of AWU told the West Australian newspaper that "Basically, that only leaves two options f