SAIL RSP posts best ever H1 performance

Steel Authority of India Limited’s Rourkela Steel Plant has reported the best first-half production since inception during April to September 2008 helped by record productions in September.

RSP achieved all time best production for any September month in major production departments such as hot metal output of 187,036 tonnes, total crude steel production of 175,504 tonnes and total saleable steel production of 1,71,640 tonnes. These production figures correspond to capacity utilization of 114%, 112% and 125%.

Best ever September was achieved in the production of HRC at 133,330 tonnes, HRC for sale at 67,028 tonnes and plates from plate mill at 44,006 tonnes.

This has helped RSP to achieve all time best production levels for the April to September period in major areas.
1. Hot metal - 1.12 million tonnes up by 6% YoY
2. Crude steel - 1.05 million tonnes up by 7% YoY
3. Total Saleable Steel - 1.01 million tonnes up by 3% YoY

All time best first half performance was also achieved in finished products
1. Plates from plate mill - 236,047 tonnes
2. HRC for sale - 394,867 tonnes
3. CRNO - 40,608 tonnes

Monday Market Monitor - India (WEEK 40) - Slide continues

The fall in prices got aggravated in both Flat products and Long products. The overall steel index fell by 200 points:

ILPPI – Indian Long Product Price Index
IFPPI – Indian Flat Product Price Index
INDSPI – Indian Steel Price Index

The lowest values, after a continuous slide from August 5th 2008, are as under

ILPPI – Indian Long Product Price Index
IFPPI – Indian Flat Product Price Index
INDSPI – Indian Steel Price Index

Long products

Flat products

To know more about these indices please visit
http://steelprices-india.com/spi_services/spi.html

Input materials

Domestic prices for all input materials fell at all the centers.

Melting scrap
80:20
HMS

Change on October 3rd is with respect to prices on 26th September
Change is in INR per tonne

Alang

Change on October 3rd is with respect to prices on 26th September
Change is in INR per tonne

Pencil ingot

Change on October 3rd is with respect to prices on 26th September
Change is in INR per tonne

Pig Iron

Change on October 3rd is with respect to prices on 26th September
Change is in INR per tonne

Sponge iron

Change on October 3rd is with respect to prices on 26th September
Change is in INR per tonne

Long products

TMT
Fe 415
12mm

Change on October 3rd is with respect to prices on 26th September
Change is in INR per tonne

WRC
SWR14
5.5/6

Change on October 3rd is with respect to prices on 26th September
Change is in INR per tonne

ANGL
GR A
65x6

Change on October 3rd is with respect to prices on 26th September
Change is in INR per tonne

CHNL
GR A
75/100

Change on October 3rd is with respect to prices on 26th September
Change is in INR per tonne

JSTI
GR A
250x125

Change on October 3rd is with respect to prices on 26th September
Change is in INR per tonne

The prices are unlikely to look up since the pressure of imports owing to steep decline in international prices is an impaling situation for domestic majors who will be forced to reduce prices.

Flat products

HRC
Tube
2.5x1250

Change on October 3rd is with respect to prices on 26th September
Change is in INR per tonne

Patra

Change on October 3rd is with respect to prices on 26th September
Change is in INR per tonne

PLTS
GRA
8x1.5

Change on October 3rd is with respect to prices on 26th September
Change is in INR per tonne

PLTS
GRB
12-20x2.5

Change on October 3rd is with respect to prices on 26th September
Change is in INR per tonne

CR
DSK
0.63x1000

Change on October 3rd is with respect to prices on 26th September
Change is in INR per tonne

GC
100Gms
0.4

Change on October 3rd is with respect to prices on 26th September
Change is in INR per tonne

If you want to know the prevailing prices and changes across the week on daily basis, please subscribe to services of www.steelprices-india.com

Demand and supply mismatch is a concern - Mr Paswan

BS reported that delays in allocation of land and iron ore mines for setting up new capacities have caused India's steel output to grow at a modest rate of 4.2% even as demand has clocked a growth rate of 11%.

Mr Ram Vilas Paswan Union Steel Minister at the 22nd meeting of Steel Consumer Council said that in April to August 2008 output up by 4.2%, down from 5.2% during 2007-08 and 12.8% in 2006-07.

Mr Paswan said that “Mismatch in the rate of production and consumption of steel is a cause for concern as a result of the overall mismatch, the country has become a net importer of steel in 2007-08 and the same trend continues this year as well.”

He said that “Demand during the April to August period increase 11% as against 10% in the previous year. The Indian economy rests on strong fundamentals and I am confident that domestic demand will continue to grow at a healthy rate, despite a global slowdown.”

Mr Paswan said that steel output is likely to stagnate unless new capacities come on stream. India aims to produce 124 million tonnes of steel annually by 2011-12 more than double its current production capacity of about 56 million tonnes. He said that “I hope we will be able to meet this target.”

Singur pull off unfortunate - ASSOCHAM

The ASSOCHAM is extremely sad that one of its revered Patron Members The TATAs have pulled out of Singur. It is the most unfortunate happening of industrial activities in twenty first century.

Mr DS Rawat Secretary General of ASSOCHAM said that though, the West Bengal Government should not be blamed for TATA’s exiting West Bengal. The blame lies with a section of a polity and people of West Bengal will have to pay a very serious price for it.

According to the ASSOCHAM, despite TATA’s pulling out the West Bengal, the Chamber holds that its industrial prospects will continue to hold promises.

Mr Rawat said that ASSOCHAM regrets that the large industrial house has come out of a State which is intellectually very superior.

JSW commissions BF at Vijaynagar

Project Today reported that JSW Steel has commissioned its Vijaynagar plant near Bellary with 1,250 cubic meters capacity which will help the company to cope with 10 million tonnes per annum production.

As per report, the company has commissioned the furnace within 17 months. To meet the current needs of 5.50 million tonnes per annum and anticipating future needs, the company had resorted to large scale recycling, using ore fines or small particles once discarded. This recycling also went to reusing the fines of coal and coke for fuel.

The report added that JSW has also sought mining leases in Dhonimalai not far from the Vijaynagar steel plant. Proximity to mines is a cost advantage, it wants to attain. The mines it can now access have estimated reserves of around 30 million tonnes per annum.

L&T buys 4.2% stake in Kalindee Rail

ET reported that Larsen & Toubro has picked up 4.2% stake in Delhi based Kalindee Rail Nirman Engineers Limited from open market. L&T Capital a subsidiary of L&T bought 4.5 million shares of Kalindee at an average cost of INR 121.21 a piece.

Blackstone Asia was the possible seller.

Stock market sources said that L&T may scale up its stake in Kalindee Rail close to 15%. This however could not be confirmed with the two companies.

Kalindee Rail Nirman Engineers Limited is a significant beneficiary of aggressive CAOEX plans of Indian Railways and makes a strategic fit with L&T’s future plans. The company has proven skills in tracks, signaling and telecommunications.

Kalindee Rail Nirman Engineers Limited has a strong relationship with the Indian Railways and qualifies for required technical specification and safety norms by it. It has also entered into various tie ups and JVs with leading international players to keep pace with technology.

Economic slowdown hits Indian commodity sector

According to a survey of 400 CEOs done by Associated Chambers of Commerce and Industry ASSOCHAM, Indian commodities sector may not be doing well due to global economic slowdown despite the rising demand.

ASSOCHAM said that 230 CEOs held that mining, refining, petrochemicals and petroleum sector including cement and steel have not been doing well despite their demand in the market. This again will not augur for well as their contributions to GDP is not going to be significant.

According to 350 CEOs, ASSOCHAM estimates a minimum of USD 10 billion shortfall in India’s FDI’s target during current fiscal. India could optimally receive about USD 25 billion to USD 26 billion of FDI’s in fiscal 2008-09 against the targeted volume of USD 35 billion.

The other reasons cited for lower FDI’s include adverse sentiments in the stock market, bottlenecks on infrastructure, no initiatives on disinvestments, rising interest rates and volatility on economic front mainly because of 2 factors which include adverse and serious impact of global slowdown and US financial crisis.

According to 280 CEOs, stock market will continue to remain in dampen mood as large number of investors have shifted their investments to traditional source of savings channels. US financial crisis will definitely have a cascading effect on Indian economy particularly on FDI’s front and the law and order situation in India has unfortunately has come into serious question. All these factors put together do not send good signals to investors especially overseas and their strategy will be that of wait and watch in which the FDI’s will suffer towards India.

About 320 CEOs were of the view that foreign investors are keeping a watch on elections in four state and thereafter, their outcome and again the Parliamentary pool in 2009. Because of this the volatility of the Indian political front will remain and investors would also like to take advantages of stable polity after 2009 comes to close.

The vast majority of CEOs have also felt that inflationary pressures will continue to grapple the Indian economy as these expect further rising of interest rates which will cause credit and liquidity crunch in the Indian market as Indian industry would have no option, barring learning to live with the current realities. This again will discourage the sentiments for FDI’s towards India.

Mr Sajjan Jindal president of ASSOCHAM said that the financial year 2008-09 had begun with difficult times in which the inflationary pressures mounted beyond manageable limits, the adverse impact of which on Indian Inc. has been substantial in the sense that the yearly profitability of Indian industry would suffer a beating to an extent of 15% to 20%.

Mr Jindal said that the sentiments are extremely negative as not only industrial production has been falling because of manufacturing sector not doing too well. No doubt agriculture has done better and is expected to do still better because of anticipated good monsoon but agriculture alone doing well will not enhance the country’s GDP.

Mr Jindal said that nearly 300 CEOs hold a view that services sector followed by computer software and hardware, telecom, construction activities, housing and real estate will respectively receive FDI’s in 2008-09 as happened in the last fiscal.

It may be mentioned here that the Ministry of Commerce and Industry had set the target of FDI’s in last fiscal for USD 30 billion of which the total FDI received were to the tune of about USD 25 billion.

TATA Motors Nano plant at Singur - Chronology of events

TATA Motors confirmed on Friday that there will be no Nano from Singur as the company has decided to pull out of West Bengal.

This is how it all began and ended.

1. May 18, 2006: TATAs select West Bengal for the INR 100,000 small car plant. Mr Ratan Tata said that “We have scanned the country, looked at various locations and have decided to locate this rather revolutionary plant that will give India a true people's car in West Bengal.”

2. September 25th 2006: Ms Mamata Banerjee chief of Trinamool Congress decides to sit on dharna outside BDO's office at Singur to protest land acquisition drive. Also calls for rail and road blockade.

3. October 9th 2006: Trinamool calls 12 hour state wide bandh.

4. December 2nd 2006: Violence mars Singur 5 get hurt in rubber bullet firing.

5. December 4th 2006: Attack on TATA Motors showroom in Kolkata. Mamata Banerjee on hunger strike spurns Chief Minister's talks offer on Singur issue.

6. December 18th 2006: Trinamool issues 48 hour Bangla bandh after school girl Tapasi Malik's alleged rape and murder inside Singur project's fenced off area.

7. December 28th 2006: Mamata Banerjee calls off indefinite hunger strike after 25 days following appeals from PM and President.

8. January 14th 2007: Land puja offered at car project site.

9. February 5th 2007: Police mob clash at Singur.

10. March 9th 2007: State government signs a 90 year agreement with TATA Motors for 'Nano' plant.

11. March 11th 2007: A farmer Mr Haradhan Bag commits suicide at Singur.

12. March 16th 2007: Mob attacks TATA Motors' factory fencing at Singur.

13. March 18th 2007: Explosion at TATA Motors' factory damages fencing.

14. March 25th 2007: 5 guards at project site injured during clash with protesters.

15. May 24th 2007: Peace talks between state government and Trinamool fail.

16. May 25th 2007: Singur farmer Mr Prasanta Das commits suicide.
17. June 4th 2007: Jyoti Basu echoes Ms Mamata Banerjee's demand that 600 acres is required for the Singur project.

18. September 18th 2007: TATAs appoint first batch of 17 Singur youth after training.

19. November 12th 2007: Central forces deployed at Singur after fresh protests.

20. January 16th 2008: TATAs give jobs to 80 displaced farmers.

21. January 18th 2008: Calcutta High Court declares Singur land acquisition legal.

22. February 15th 2008: TATAs announce Nano roll out by October 2008.

23. May 13th 2008: Supreme Court refuses to block Nano roll out from Singur.

24. May 21st 2008: Trinamool wins majority of seats in Singur self governance institutions.

25. June 27th 2008: Singur protesters break factory gate.

26. August 7th 2008: Ms Mamata Banerjee willing to talk to TATAs.

27. August 18th 2008: CM invites Ms Mamata Banerjee for talks.

28. August 19th 2008: Ms Mamata says 400 acres must be returned to farmers.

29. August 20th 2008: Talks between state government and Trinamool Congress fail.

30. August 22nd 2008: Mr Ratan Tata threatened to move Nano projective out of West Bengal if violence continues at Singur.

31. August 23rd 2008: Indian industries rally behind TATA project saying continuing protests would tarnish state's image.

32. August 24th 2008: Trinamool begins indefinite dharna at Singur demanding return of land.

33. August 26th 2008: Nano factory workers stay away from work.

34. August 27th 2008: Mr Mukesh Ambani chairman of RIL backs TATAs on Nano project.

35. August 31st 2008: Trinamool delegation meets Governor Mr Gopalkrishna Gandhi over Singur suggesting a mediator to resolve the deadlock.

36. September 2nd 2008: Cricket icon Mr Sourav Ganguly bats for TATAs.

37. September 3rd 2008: TATAs suspend work at Singur plant due to assault and intimidation by agitators, threaten to relocate plant elsewhere.

38. September 3rd 2008: Governor invites state government, Trinamool Congress to meet him at Raj Bhavan to end stalemate.

39. September 4th 2008: Mr Ratan Tata says all possible steps being taken to roll out Nano on time.

40. September 7th 2008: Raj Bhavan agreement signed in presence of Chief Minister, Ms Mamata Banerjee and Governor Mr Gopalkrishna Gandhi to remove Singur impasse.

41. September 9th 2008: Special land search committee formed at the end of the meeting with members from Trinamool Congress and WBIDC.

42. September 12th 2008: CM-Ms Mamata meeting at instance of Mr Buddhadev Bhattacharjee in view of continuing deadlock at Singur.

43. September 13th 2008: State government announces rehabilitation package for the Singur farmers.

44. September 15th 2008: Left Front meeting on Singur calls for an end to deadlock.

45. September 16th 2008: Ms Mamata Banerjee holds counter rally at Singur demanding implementation of the agreement.

46. September 24th 2008: Attack on security guards at Singur factory.

47. September 24th 2008: Government hopes for a settlement of the Singur crisis.

48. September 30th 2008: All party meeting on Singur called by Chief Minister at Writers' Buildings, boycotted by Trinamool Congress and some of its allies.

49. October 1st 2008: CM said that Mr Ratan Tata to discuss Singur issue.

50. October 3rd 2008: Mr Ratan Tata formally announces that there will be no Nano from Singur.

Directory of Overseas Scrap Suppliers to India

India is large market for import of steel scrap and this is the directory which is going to help many interested group to know this industry.

Published in September 2008, 'Directory of Scrap Suppliers to India' has been comprehensively researched and prepared, to bring you a fully up to date guide to overseas scrap supplier.

Why spend hundreds of hours searching for new contacts? Invest in a copy TODAY!

Content:
This report covers name and product details of 1191 overseas scrap suppliers to India in alphabetical as well as location wise order. Look at the information you'll get in the 'Directory of Scrap Suppliers to India'

• Company name -1191 entries
• Address-1191 entries
• Email-1074
• Phone number-1140
• Fax number -431 entries

Format:
PDF File
Total no of pages – 545

Delivery by Email on receipt of payment

Price:
USD 500 or equivalent in INR
Additional Charges would be levied for delivery of file on a CD or in printed form

How to order:
Ordering the report is simple. You can order your copy to reports@steelguru.com, which will send you an invoice of the report.

Century of Trust, The Story of TATA Steel

DNA reported that TATA Steel's decision to bid for Corus sprouted from mere discussions in late 2005 between the two companies on how they could work together. And when the idea of a buyout was mooted by Mr Ratan Tata chairman of TATA Group even Mr B Muthuraman MD of TATA Steel s and D T Mukherjee deputy MD were taken back.

The book on TATA Steel published by Penguin said that they perhaps did not take his words very seriously.

The book “Century of Trust, The Story of TATA Steel” said that during a meeting with Mr Philippe Varin CEO of Corus a statement from him struck Mr Ratan Tata making him ponder over a possible acquisition. Mr Varin said that “Corus and TATA Steel have capacities of 20 million tonnes and 5 million tonnes respectively. Corus and TATA Steel have approximately the same market value and have similar product lines.”

After pondering over having a grander alliance with Corus, Mr Ratan Tata told Mr Muthuraman and Mr Mukherjee that “Look, we are wasting our time on these smaller issues. Why don t we look at buying Corus?"

The book said that “Both of them were a little taken aback and did not take TATA's words seriously.”

Later during another meeting, Mr Ratan Tata stated categorically that whatever structure was decided upon, the identity of TATA Steel would have to remain intact.

Directory of Shipyards and Marine Service Providers in India

The Indian maritime sector has entered a high-growth phase fuelled by the country's spectacular economic growth and rapidly increasing seaborne trade. The most striking feature of this development is the simultaneous buoyancy in all the sub sectors shipping, ports and shipbuilding. This provides tremendous opportunities for all the players in the maritime field.

With the Government encouraging private sector participation in port infrastructure development under the National Maritime Development Program, the Ports & Shipping Industry is poised for spectacular growth in order to meet the surge in demand.

Published in October 2008, 'Directory of Shipyards and Marine Service Providers' has been comprehensively researched and prepared, to bring you a fully up to date guide to Indian shipyard industry.

Why spend hundreds of hours searching for new contacts? Invest in a copy TODAY!

Content:
This report covers name and product details of 49 shipyards and marine service providers of India in alphabetical as well as location wise order. Look at the information you'll get in the 'Directory of Shipyards and Marine Service Providers'

• Company name -49 entries
• Address-49
• Email-35
• Phone number-48
• Fax number -42 entries
• Mobile -6 entries

Format: PDF File
Total no of pages – 35
Delivery by Email on receipt of payment

Price:
USD 150 or equivalent in INR
Additional Charges would be levied for delivery of file on a CD or in printed form

How to order:
Ordering the report is simple. You can order your copy to reports@steelguru.com, which will send you an invoice of the report.

Air Liquide to set up ASU in Panipat

It is reported that Air Liquide, manufacturer of industrial and medical gases, will invest around INR 300 crore in India to set up an air separation unit.

The ASU will manufacture 850 tonnes per day of oxygen, along with liquid oxygen, nitrogen and argon and is expected to be commissioned by July 2009.

The produce from the plant will primarily be sold to Indian Oil for its upcoming naphtha cracker facility at Panipat. IOC is currently building a 3 million tonnes per annum naphtha cracker complex adjacent to its existing 12 million tonne per annum refinery at Panipat,

Nano vendors ready to move with TATA Motors

BS reported that all the vendors of TATA Motor’s Nano plant, maintained that they were committed to the project and would relocate with TATA Motors if necessary.

As per report, all vendors whom Business Standard spoke to admitted that there would be significant financial losses for them in case of relocation. At the same time, many pointed out that TATA Motors has unofficially conveyed they would be offered some form of cushion.

Caparo Engineering supplier of sheet metal and body frames for the Nano had already invested around INR 100 crore on its facility at the vendor park and was ready to go into production. In case of relocation, the entire equipment will have to be shifted to a separate site as the product is customized for the Nano.

Another vendor ready to start production at the ancillary park in Singur, Lumax Industries said that it was ready to supply from its facilities in Gurgaon, Pune or Chennai.

Leading vendors such as Exide Industries said that the company could not have delayed a decision on Singur further.

Overseas majors eye investment in local ports

ET reported that investment in domestic ports may come from majors in China, France and Britain now and would help private and government port authorities to use new technology and expedite implementation of schemes.

According to a senior official with a private port, total investment may cross INR 10,000 crore over a year. Investment could include setting up Greenfield projects, improving productivity at existing ports and setting up other facilities like container terminals and roads. As per report, some of the deals could be in the form of JVs with foreign ports. FDI up to 100% is allowed under the automatic route for construction and maintenance of ports and harbors.

As per report, Jurong Port Authority of China had plans to set up a Greenfield port on the east coast with Sical Logistics involving an initial investment of INR 1,500 crore. Similarly Mumbai Port Trust is entering into a sister port agreement with the Port of Marseille-Fos of France while the Irish Port Authority is likely to invest in Jaigarh Port in Maharashtra. Mundra Port has already signed a MoU with Antwerp Port Authority to absorb some of the international port management practices.

A senior official with the infrastructure advisory committee of KPMG said that “The main idea of foreign collaboration is to enhance the business skills of major Indian ports. Collaboration with the foreign ports will not only enrich Indian ports technologically but also enable them to operate from anywhere in the world.”

12 companies shows interest in PSEB's power project

It is reported that twelve companies including TATA Power, Nagarjuna Constructions, Reliance, Lanco and GMR, besides two Malaysian companies and a Spanish power company have evinced interest in Punjab State Electricity Board's 2640 MW thermal power plant at Gidderbaha in Muktsar district.

The power plant is located on Bathinda-Abohar National Highway number 15 on common land of villages Ghagga, Teri and Babania in Gidderbaha town of Muktsar district.

In total, 2,432 acre has been identified for the project and the site has been cleared by the Central Electricity Authority, while Section 4 notices for acquisition under the Land Notification Act have been issued.

Power Finance Corporation Consulting, a wholly owned subsidiary of Power Finance Corporation, is the consultant for this project.

IOC import bill to jump by 6%

Indian Oil Corporation the nation's largest oil firm said that its crude oil import bill this fiscal is likely to up by 17.6% to USD 40 billion as spiraling international oil prices and depreciating rupee are adding pressure.

Mr Sarthak Behuria chairman of IOC said that IOC spent USD 34 billion to import about 41 million tonnes of crude in 2007-08. He said that “This year the bill will be about USD 40 billion.”

This fiscal the company would import 46 million tonnes to 47 million tonnes of crude oil.

He said that besides rising global oil prices, the depreciating rupee was adding to the pressure. He added that “For every INR 1 depreciation against the dollar INR 300 crore is added to our oil import cost. The impact till now is INR 1,200 crore.”

He said that IOC was losing INR 193 crore per day on sale of petrol, diesel, domestic LPG and kerosene. The industry lost INR 350 crore per day on fuel sales.

Ambuja Cements September production up by 8%

It is reported that Ambuja Cements September production went up by 8% in September 2008.

Ambuja Cement said that its production for September was 13.77 million tonnes against 12.70 million tonnes a year ago recording a growth of 8.4%. According to a company release, the company has dispatched 13.68 million tonnes in September against 12.88 million tonnes a year ago a growth of 6.2%.

Its cumulative production from January to September 2008 was 132.02 million tonnes against 125.05 million tonnes a year ago a growth of 5.57%. Its cumulative dispatch for the same period stood at 131.94 million tonnes compared with 125.40 million tonnes in the period under review a jump of 5.2%.

Allcargo plans to set up 2 Greenfield sea ports

It is reported that Allcargo Global Logistics of Mumbai plans to set up Greenfield projects that include one port each on the east and west coasts.

As per report Allcargo will form an SPV with an unnamed shipping company. While feasibility studies for the project location are on Gujarat is a probable location while Andhra Pradesh and Orissa are being considered on the east coast.

It added that construction work on the ports is likely to begin within a year. Allcargo will make an initial investment of INR 500 crore moving to INR 2,000 crore in the next 4 to 5 yea.

Mr Ramesh to attend India-Ethiopia Joint Trade Commission

The 5th meeting of the India-Ethiopia Joint Trade Commission will be held in Addis Ababa on 6th & 7th October 2008. Mr Jairam Ramesh minister of State for Commerce & Power will be leading the Indian delegation comprising of senior officials, businessmen, export promotion councils and bankers.

A number of important bilateral agreements are expected to be signed during Mr Jairam Ramesh’s visit. Among them is pact to set up a 38 MW hydel project by BHEL and IL&FS.

In addition bilateral agreements on standards, small and medium enterprises and agricultural research are on the anvil. The 2 countries are also in the advanced stages of finalizing a trade agreement to replace the earlier trade agreement signed in November 1982. India is also bidding to participate in Ethiopia’s railway modernization and expansion program.

In the context of India emerging as the single largest foreign investor in Ethiopia, the two countries are negotiating a double taxation avoidance agreement which is expected to be clinched in the next three months. A bilateral investment promotion and agreement has already been signed between the 2 countries and its implementation will be announced at the 5th meeting of the Joint Trade Commission.

Indo Tech gets export order worth INR 300 million

Reuters reported that Indo Tech Transformers Ltd has got an export order worth INR 300 million. The order is for supply of five power transformers of various capacities.

It added that Indo Tech has also commissioned a transformer tank manufacturing facility for a cost of INR 35 million.

AP moots 2,000 MW Nuclear power plant

BL reported that Andhra Pradesh government has asked the State generation utility to prepare a plan to establish a 2,000 MW nuclear power plant in the State.

Dr YS Rajasekhara Reddy CM of Andhra Pradesh has asked the officials of APGenco to prepare a preliminary project report to set up the plant.

He said that “We are keen on cashing in on the favourable developments with regard to nuclear deal with the fuel supplier countries. We will discuss the project in detail after getting the preliminary report.”

Panel to review Haldia dock draft crisis

BL reported that the Standing Parliamentary Committee on Shipping headed by Mr Sitaram Yechury CPI(M) Member in the Rajya Sabha is to shortly review the crisis facing the Haldia dock of the Kolkata Port Trust.

As per report, the crisis thrown up by the declining draft in the Hooghly River is believed to have been aggravated by the non deployment of sufficient number of dredgers by the public sector Dredging Corporation of India in the Hooghly River near the dock. The Shipping Secretary it is learnt will present his views on the subject before the committee.

Eicher Motors September sales down by 34%

BL reported that Eicher Motors 34.33% decline in its total sales in September at 1,865 units as against 2,840 units in the same month 2007.

The company said in a statement that its domestic sales also down by 38.87% to 1,552 units as compared to 2,539 units in the same period a year ago. Exports during the month stood at 313 units compared to 310 units 2007. Sales of light commercial vehicles in the domestic market during the month down by 29.12% to 1,451 units the same stood at 2,047 units in September 2007.

It added that heavy commercial vehicle sales also recorded a slump of 79.47% at 101 units as against 492 units in September 2007.

Sumitomo to build new BF No 1 at Wakayama Steel Works

It is reported that Sumitomo Metal Industries Limited held a furnace building ceremony for its new number 1 blast furnace at the Wakayama Steel Works. Since the commencement of work in November 2006, construction has been performed smoothly on schedule and the steel shell for the blast furnace has been installed.

The number 4 blast furnace at the Wakayama Steel Works has been running since February 1982 for over 26 years, the longest duration in the world. It will be replaced by the new number 1 blast furnace. The blowing in ceremony is scheduled for July 2009.

Summary of constructions is as follows
1. Construction cost – JPY 51 billion
2. Construction period – November 2006 to July 2009
3. Capacity – 7,500 tonnes a day
4. Inner volume – 3,700 cubic meters
5. Overall width – 12.5 meters
6. Number of tuyeres – 34
7. Number of tap holes – 4
8. Bricks used – Approximately 22, 000 tonnes

Nippon finishes HR negotiations with South Korean buyers

Tex reported that Nippon Steel Corporation has finished all its HR coil export negotiations for shipments to South Korea in the October to December 2008 quarter. As a result, price increases of USD 30 to USD 50 per tonne apply in negotiated export deals with Korean steel rerollers such as Hyundai Hysco.

In the negotiations this time, NSC first indicated inability to provide sufficient HR coils for reasons such as blast furnace repairs at its works, which aroused bad feeling among the Korean steel rerollers. Then, signs of a decline arose both in South Korea's steel exports and domestic steel demand. As a result, the two sides agreed to less supply volumes than the quarter before as a compromise at the final stage.

Japanese integrated steelmakers have held back on their deals of HR coil exports to part of Southeast Asia for October to December 2008 quarter shipments. A case in point is Vietnam where local buyers are noncommittal to new exports of HR coils. But the Japanese steelmakers have negotiated flat or increased prices in their HR coil exports to China and Latin America for Q4 shipments.

In China, meanwhile, the domestic HR coil market is way down. Chinese steelmakers are reacting with moves to promote HR coil exports in Asia at reduced prices, mainly for commodity-grade HR coils in thick sizes of around 3mm. Accordingly, there are no marked cases so far of a price reduction in Chinese exports of high-grade HR coils featuring thin sizes.

Recession reports - Freight rates to fall for next 2 years

Mr Khalid Hashim MD of Thai dry bulk shipper Precious Shipping Limited said that it expects freight rates to continue falling over the next 2 years due to the US financial turmoil and global demand slowdown.

Mr Hashim said that the Baltic Exchange's chief sea freight index for global raw materials, which has fallen almost 75% from a record 11,793 points on May 20th 2008 to 2,990 points now, could drop to between 1,000 to 2,000 points over the next 18 to 24 months.

He said that the index, which reflects dry bulk rates on the most important shipping routes, has not been that low since March 2002. He added that "The financial explosion has traveled from America like a big wave and hit Europe, Britain, Japan and Asia. So, there is definitely demand destruction taking place. The greater probability is that because the financial explosions are not yet over, and I think they're going to get larger, not smaller, freight prices as reflected by the BDI will come to between 1,000 points to 2,000 points in the next 18 to 24 months."

Precious was looking to sell 25 of its older vessels and replace them with cheaper, newer ones over the next 2 to 3 years. The purchases would be financed through loans. Precious, which has a fleet of 44 ships with average size of 25,700 DWT and average age of 20 years, has earmarked USD 588 million to acquire new 18 vessels in 2010-2013 and would fund it by cash and bank loans.

He added that "We do not have much exposure to the spot market. If the market comes down sharply, our earnings will remain up there and our cash flow will be good due to our long term forward book. But the second hand value of ships will drop dramatically. That will allow us to replace the 25 old ships that we have with younger, larger and better ships at very reasonable prices."

PSL, valued at USD 453.7 million on the Thai bourse, is 42% owned by one of Thailand's richest families. Mr Khalid and his younger brother have a combined 17.5% stake.

In depth analysis of steel projects in India

What is important to take note of now, however, is that the Indian steel industry suddenly finds itself in a completely different context. In the world of steel, every player remains familiar with the cyclical nature of the growth. Therefore, the slowdown should not have surprised any in the industry. But, none really expected this to have happened so fast. The steel super cycle seems to have been ended abruptly or really?”

“India’s steel dream looks to be fading away” This is how we started our last year’s steel report. With the added uncertainty, the industry’s plans are in total disarray. There are no questions on the opportunities this country has offered in steel. From all points of view, these have been strong and credible ones.”

But the recent great years in steel have supported strong capacity growth in the steel industry in India. The more competitive Brownfield expansion projects have started delivering results and more are expected to come. What has been extraordinarily interesting to note in the past few years is the growth of very small to mid size capacities.

The Indian steel industry is in a peculiar fix. The capacity could not be raised immediately because of their own strategic problems. The limited capacity in the country and higher global prices provided to them all the opportunities to make sufficient money themselves and raise their credibility in the global capital market. However, an impulsive government, given the high political value attached to inflation in India, intervened in the steel business more than it needed to do.

Despite the fact that the capacity expansions in India have been of recent origin, a huge chunk of the existing capacity is technologically outdated or is uniquely backward.

It will be premature to write India’s steel ambition off despite all the bad news surrounding it currently.”

“Indian Steel Projects: Ground Reality, Strategic Issues and Opportunities” from Steel and Natural Resources Strategy Research analyses the context each significant producer is placed in and identifies their core problems. It makes an objective assessment of the strength and weakness of each of the major projects, when they are expected to be completed and at what cost.

It takes a macro view of the emerging steel supply scenario till 2021.

This 115 page report with 35 tables, 12 charts, a number of annexure, three maps and an appendix looks at the steel industry’s future in India from a strategic point of view to guide the investors in the industry, capital goods industry, steel traders, raw materials suppliers and the policy makers in the government in their own individual planning for the future.

Report Summary:
1. Published: Sep 2008
2. Format PDF File (Delivery by Email on receipt of payment)
3. Total no of pages – 115

Price: USD 1100 or INR 50,000
(Note: You can Save USD 100 if you order before October 15th 2008)
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You can order your copy to reports@steelguru.com

Recession reports - Auto majors predict longer slump

Bayerische Motoren Werke AG, Ford Motor Co and France's Renault SA said that a slump in car sales may be more prolonged than manufacturers have anticipated.

Mr Norbert Reithofer CEO of BMW said that auto markets would not recover until at least the middle of 2009.

Mr Alan Mulally CEO of Ford said that a recovery would not begin before 2010. Mr Mulally said that the US auto market would not improve in 2009 because of a stagnant economy. He added that "The most important thing for all of us is to stabilize the US economy. The auto industry is going to be closely linked with economic development. We have a lot of things in play. We are trying to figure out what this change means for the mix as well as what it means for the volume.''

Mr Carlos Ghosn CEO of Renault boss said the slowdown may last 2 years. He added that "We do not know if we're at the beginning of the end or the end of the beginning.''

Auto sales plunged by 27% in the US in September 2008 as tightening credit and an economic slowdown discouraged buyers. They are also sliding in Europe, dropping 16% in August, the biggest monthly decline since 1999. Demand is even slackening in emerging markets such as Russia, Eastern Europe and Brazil, where carmakers have been investing to expand capacity.

Schoeller-Bleckmann acquires Techman Engineering

Schoeller-Bleckmann Oilfield Equipment AG, listed on the Vienna Stock Exchange, acquired 100% of the shares of British oilfield service provider Techman Engineering Ltd effective October 1st 2008.

The sellers are the former private owners of the company. It was agreed not to disclose the purchase price. Techman will remain a separate entity and supply the existing customer base as before.

Techman is a manufacturer of precision components collars and tools for the oilfield service industry and, with around 70 employees, recently generated annual sales of approximately GBP 13 million.

Apart from the production site in Rotherham and the Service & Supply Shop in Aberdeen, Techman Engineering is the third operational site of Schoeller-Bleckmann in the United Kingdom.

Mr Gerald Grohmann CEO of Schoeller-Bleckmann Oilfield Equipment said that "For Schoeller-Bleckmann, the acquisition of Techman is an ideal addition to our capacities in the core business of high-precision components for the oilfield service industry.”

He added that “Moreover, Techman has the expertise in using plastic and composite materials, rounding off the broad material know-how of the SBO group. With a clear commitment to first rate quality and perfect customer service, Techman superbly fits into SBO also in terms of corporate philosophy.”

In total, SBO now operates six production bases around the world, two in North America, one in Mexico, two in the UK and one in Austria, where the Ternitz site also accommodates the head office. Additionally, SBO runs service and supply centres for the oilfield service industry in the US, UK, Russia, Dubai and Singapore.

Rautaruukki raises EBIT target and expects continued growth

Rautaruukki is holding its annual Capital Market Day for investors and analysts in Vaasa Finland on October 1st and October 2nd 2008. Topics covered this year include the company's main growth segments, actions to further improve operations and the company's latest technology solutions.

Mr Sakari Tamminen president & CEO of Rautaruukki said that "Our company's profitable growth is based on sustainable fundamentals. Rautaruukki's revised EBIT target is to exceed 15% instead of 12% as earlier. Efficient operations, strong growth segments, actions already carried out to improve profitability and our new operational excellence program create the fundamentals for us to raise our EBIT target."

Other financial targets and the company's dividend policy remain unchanged.

Rautaruukki's management expects continued growth in the company's main market areas, especially in Central Eastern and Eastern Europe. It believes the impact of the current general factors of uncertainty in the global economy is likely to be less in its core market areas such as the Nordic countries, Central Eastern Europe and especially in Russia and Ukraine.

Comparable consolidated net sales growth during the current year is expected to meet the target and exceed 10 per cent. Operating profit in 2008 is expected to be higher than in 2007.

Rautaruukki's divisions are focusing on growth in the following geographical areas and business segments

Ruukki Construction
Non residential construction market in Central Eastern Europe and CIS countries. The division's rolling net sales for the 12 months ending June 30th 2008 in the above business areas totaled EUR 518 million.

Ruukki Engineering
Lifting, handling and transportation equipment industry and machinery and equipment manufacturers in the energy industry. The division's rolling net sales for the 12 months ending June 30th 2008 in these business segments totaled EUR 461 million.

Ruukki Metals
The division's rolling net sales for the 12 months ending June 30th 2008 in the special steels business totaled EUR 534 million.

Based on forecasts in customer industries, Rautaruukki estimates a compound annual growth rate of 8% to 12% in Ruukki Construction's Central Eastern European market and 10% to 18% in CIS countries between 2008 and 2011. It estimates an annual market growth rate of 5% to 7% in Ruukki Engineering's lifting, handling and transportation equipment industry and 7% to 11% in the energy industry, and Ruukki Metals' special steel market is expected to grow at an annual rate of 6% to 7% over the same period.

POSCO braces for stricter carbon rules with FINEX

South Korea, the world's 10th largest CO2 emitter, plans to announce its target for greenhouse gas reduction next year, as world nations try to agree on a replacement for the UN's Kyoto Protocol that will bind all nations to emissions curbs. South Korea is not among those 37 because it was deemed to be a developing nation when the protocol was negotiated in the mid 1990s.

Mr Hwang Byung so a manager in charge of climate change policy in the prime minister's office said that "Given that Korea's economy is based on energy intensive industries such as petrochemical, steel and manufacturing, it is difficult to lower carbon emission levels dramatically. But we will prepare measures that are in line with our economic status in the world and will contribute to global moves towards cutting greenhouse gas emissions."

Reuters reported that a wall of heat and sulphur from a towering furnace stoked to 1,500 degrees Celsius hits onlookers at POSCO's Pohang plant in South Korea amid the din of coal and iron ore rattling into vats of molten metal. Pohang's oldest furnace helped POSCO grow into the world's number 4 steel giant.

POSCO, which alone produces around 10% of South Korea's total carbon dioxide emissions, moves to new technology to cope with stricter emission rules.

POSCO's strategy centers on a new technology called FINEX, which is jointly developed with German firm Siemens as an alternative form of iron making to the decades-old blast furnace. FINEX reduces greenhouse gas emissions and allows producers to use cheaper raw materials such as ore fines and non-coking coal, a strategy that pays off at a time when coking coal and iron ore prices almost tripled and doubled respectively.

Carbon dioxide, the main greenhouse gas, is produced from burning fossil fuels to run industry and big emitters such as steelmakers are now rushing to improve energy efficiency as South Korea prepares to join a global move in tackling climate change. South Korea is likely to promote trading of UN managed certified emission reductions and expand its own version called KCERs to encourage companies to cut greenhouse gas pollution.

Recession reports - US manufacturing sector lost 51,000 jobs

Mr Scott Paul executive director of Alliance for American Manufacturing said that "The US manufacturing sector lost 51,000 jobs in September 2008. Now more than ever, it is critical that the candidates for President and the Congress commit to an aggressive plan to stem the flow of manufacturing jobs overseas."

Mr Paul said that "Washington should quickly pivot its attention to the structural problems in our economy a massive trade debt, a crumbling infrastructure, and competitive pressures that are eliminating good paying manufacturing jobs. Communities all over America are suffering. It’s time for Washington to respond."

He said that "The big picture is of lost jobs and excessive debt. In our Town Hall meetings, we are asking voters to look at the positions of their elected officials. Are they helping to create and sustain productive American jobs? This is really a key issue for the November 2008 election."

Colombia will be self sufficient in steel by 2013 - Report

BNamericas quoted Mr Juan Manuel Lesmes executive director of national steel association Andi Fedemetal as saying that Colombia will be self sufficient in steel production by 2013, thanks to investments underway. He said that the forecast is based on investments being announced in the country right now in long and flat steel products.

Mr Lesmes pointed out a USD 1.4 billion investment for a rolled steel plant announced recently by Brazil's Votorantim Metais and Colombian steelmaker Acesco. He added that "Those investments are elevating us to self-sufficiency, which doesn't mean protectionism. We will also continue free trade."

He said that, currently, Colombia only faces a shortage of flat products but the deficit will be filled as soon as the Acesco Votorantim project is fired up. The project is designed to supply 800,000 tonnes per annum of rolled products needed on the domestic market and could eventually export an estimated 500,000 to 600,000 tonnes per annum.

Acesco currently imports finished hot rolled steel and runs it through a cold process. The new plant is expected to generate savings of close to USD 700 million for the country, which is what hot rolled imports currently cost.

Mr Lesmes said that another project that will promote a self sufficient Colombia is the new cold rolled plant that Corpacero is about to launch in northern Barranquilla city.

Colombia's apparent consumption is 3.1 million tonnes per annum and the country imports 1 million tonnes per annum of steel, where 80% represents rolled steel and steel coils, mainly from Brazil, Venezuela, Mexico, China, Japan, Russia and Ukraine.

Recession reports - UBS to exit commodities excluding precious metals

Bloomberg reported that UBS AG, the European bank hardest hit by the credit crisis, will stop over the counter trading in natural gas, crude oil, power, agricultural products and industrial metals as it cuts jobs to reduce costs.

Mr Dominik von Arx spokesman of UBS said that it will retain its precious metals trading operations, started about a century ago, its commodities index unit and exchange traded commodity derivatives business. He added that "You have got a liquidity crisis, businesses need to survive and people need to raise cash and cut costs.''

Mr Mark Mathias CEO of Quantum Asset Management Limited said that "Commodities remain a good business going forward.''

UBS has posted write downs of USD 44.2 billion since the credit crisis began last year, more than any other European bank. It said that it made a small profit in the three months through September 2008, its first profitable quarter in more than a year after it cut holdings in mortgage securities.

UBS will cut 2,000 jobs at its securities unit or about 10% of the total. It had already announced 6,000 job cuts in the past year. At the end of the year, the investment bank will have about 17,000 employees.

PT Krakatau reports import duty evasion on HR cut plates

Jakarta Post reported that foreign producers of hot rolled coil steel have allegedly manipulated deliveries to Indonesia by turning coils into plate form in an attempt to evade anti dumping duties.

Mr Fazwar Bujang president director of PT Krakatau Steel said that these producers are from China, Taiwan, Thailand, Russia and India. He said that "Exporters from other countries have cut HRC steel so as to make it similar to plate steel, which carries normal import duty of 5%. The plate steel is in fact similar with HRC. We have sent a letter to the directorate general of customs to monitor this practice as it could jeopardize local steel producers."

Mr I Gusti Putu Suryawirawan metal industry director at Industry Ministry said that HRC imports amounted to 400,000 tonnes to 600,000 tonnes in the first semester of 2008. Local steel production was recorded at 4 million tonnes to 4.5 million tonnes in 2007, while domestic demand normally grows by 10% annually.

Mr Ansari Bukhari director general for metal, machinery, textile & miscellaneous industries at Industry Ministry said that Krakatau Steel executives had informed him about the dumping issue. He added that "It is now more difficult for foreign producers to sell their HRC in Indonesia because the government has already imposed anti dumping import duties. Apparently, these overseas manufacturers found loopholes to help them dump their HRC here."

In February 2008, the finance ministry approved a proposal from the Indonesian Trade Ministry's anti dumping committee to slap more duties on steel producers from China, Taiwan, Thailand, Russia and India. Duties, effective for 5 years, ranging up to 42.58% have been imposed on Chinese producers Angang Steel Co Limited and Baoshan & Steel Co Limited. Extra duties of 12.95% to 56.51% have also been imposed upon Indian steel makers Essar Steel Limited and JSW Steel and extra duties of 5.58% to 49.47% have been imposed on Russian producers Magnitogorosk Iron & Steel Works.

The government has also imposed extra duties on Taiwanese manufacturers China Steel Corporation and Chung Hung Steel Co Limited ranging up to 37.02%. Similarly additional charges of between 7.52% and 27.44% have been imposed on Thai steel producers G Steek and Narkonthai.

According to the Central Statistics Agency, in the first seven months of 2008, imports of iron and steel and their products stood at almost USD 7 billion or equivalent to 7.5 million tonnes. This figure is already 1.5 million tonnes more than the total imports of 6 million tonnes during 2007.

Wire rods shortages in Paraguay domestic market - Report

Mr Walter Bogarín manager of local company Walt Metalúrgica SRL said that in addition to a rod deficit plaguing Paraguay's market, the country is also facing a shortage of wire rods for wire making. He added that the shortage is causing problems with the production of steel wire used for various purposes.

He also said that there is still a shortage of rebar for construction, so the country's only steelmaker Acepar can not keep up with market growth.

Rebar demand on the domestic market has grown to over 5,000 tonnes per month while Acepar only provides 3,000 to 3,500 tonnes per month.

In September 2008, a spokesperson from Paraguay's industry and trade ministry said that the rebar supply crisis will stretch into November, when local company Aceros Industrializados begins producing for the domestic market.

Acepar produces plain rods for construction and other uses in addition to rods and billets for rolling. It churns out 100,000 tonnes per year on average.

DTI awaits test result on seized Chinese rebars

It is reported that Department of Trade and Industry in Southern Mindanao in Philippines still waits for the results of the laboratory test on the samples of uncertified steel bars from China that were intercepted in Bukidnon on September 18th 2008.

Ms Marizon Loreto regional caretaker and assistant regional director at DTI said that the laboratory tests from Bureau of Product Standards will be released after two weeks from the time the samples were submitted.

Ms Loreto also said that the importer of the seized steel bars has already been identified by the DTI. She added that "We have identified him from the very start. We need to do a lot of intelligence work. He is a Manila based importer."

She further said the steel bars did not really come from the port of Davao. She added that "We have strict monitoring of cargoes at Davao port."

Mr Lucky Siegfred Balleque legal officer at DTI Southern Mindanao said that the intercepted steel bars have no Import Commodity Clearance. He added that the steel bars were loaded in a truck intercepted by the Malaybalay police on September 18th 2008. The DTI provincial office in Malaybalay then informed its regional office about the incident.

He further added that "We recovered 11 bundles of steel bars. Each bundle has 400 pieces. Once the steel bars pass the standards set by DTI, they will be sent back to the owner. But once it will be proven substandard, those steel bars will be destroyed."

Recession reports - Merrill downgrades 3 metal companies in US

Reuters reported that Merrill Lynch has downgraded Nucor Corporation, Steel Dynamics Inc and Century Aluminum Co and said that metals and mining equities have been hit hard over the past months as worries over the credit market and the global economy weigh on the sector.

While the downgrade of steel makers Nucor and Steel Dynamics was due to uncertainty in the macroeconomic environment, Century Aluminum's downgrade was based on weak aluminum pricing, high inventories and lack of catalysts to drive the aluminum price higher.

Mr David Lipschitz, an analyst, said that "We do expect aluminum prices to rebound next year, but with the Chinese not cutting production as much as originally signaled, we believe the aluminum price will trade around its marginal cost."

Recession reports - Sanyo and Daido plunge on auto slump

Bloomberg reported that shares of Sanyo Special Steel Co dropped by the most in almost 7 years after it said their US auto sales fell by the most since the 1980s.

Sanyo Special sank 14% to close at JPY 470 in Tokyo trading, the largest slump since December 18th 2001. Daido Steel Co, a maker of hardened alloy for car parts, dropped 16% to JPY 446, the biggest decline since September 3rd 2001.

Daido gets about 35% of operating income from selling automobile and industrial parts. Sanyo Special gets about 95% of operating profit from specialty steel. Nippon Steel Corporation is the biggest shareholder in both companies.

Toyota Motor Corporation and its two biggest domestic rivals said that US sales fell by as much as 37% as a credit crisis stifled consumer confidence.

Sanyo Special and Daido led declines that dragged the Topix Iron & Steel sub index down by 8% as compared with the 1.9% drop in the benchmark Nikkei 225 Stock Average.

Recession reports - Irish manufacturing PMI weakens in September

Following is a commentary on the latest Purchasing Managers' Index for Ireland's manufacturing sector by Markit, which compiles the survey.

Operating conditions in the Irish manufacturing sector continued to deteriorate in September 2008. There were substantial falls in output, new orders and employment, as the economic climate remained difficult.

At 43.7 in September, the seasonally adjusted NCB Purchasing Managers' Index showed that operating conditions declined at a faster pace than in August and only slightly slower than July's survey record. A lack of new orders continued to have a negative impact on production levels at Irish manufacturers.

The marked contraction in September was steeper than that recorded in August. New orders from both Irish and foreign companies declined considerably. Panellists attributed the fall in domestic new business to the slowdown in the wider Irish economy, while new export orders were affected by reduced demand from the Eurozone and the UK.

The weakening in new order levels caused outstanding business to decline at the second-fastest pace since the series began in September 2002. More than one third of panelists reported lower backlogs over the month.

September data indicated a further substantial rise in input prices, with fuel, steel and energy specifically mentioned by Irish manufacturers as being more expensive. However, the rate of input cost inflation eased sharply compared with August. Output price inflation also reduced, although charges to customers still increased markedly over the month.

Subscription of Rautaruukki's shares with warrants

Between June 27th 2008 and September 11th 2008, a total of 14,101 Rautaruukki Oyj shares were subscribed with the warrants based on the 2003 bond loan with warrants. The share capital has been increased by EUR 23,971.70 accordingly. The increase in share capital has been registered in the Trade Register on October 2nd 2008.

The new shares will provide shareholder's rights starting from the date of registration October 2nd 2008. It is estimated that the shares will be subject to public trading, together with the existing Rautaruukki shares, on the OMX Nordic Exchange Helsinki as of the following day.

After the increase, the share capital of Rautaruukki will be EUR 238,390,029.30 and the total number of shares 140,229,429. This number includes the shares held by the company. The next increase in share capital based on the 2003 bond loan with warrants will take place in December 2008, when the new shares subscribed by November 26th 2008 will be registered.

Cap SA falls most since 2002 on steel demand concern

Bloomberg reported that shares at Cap SA, Chile's biggest steel and iron ore producer, fell the most in 6 years in Santiago trading on speculation slowing global growth will curtail prices and profits.

Cap dropped by 12% to CLP 11,790, the biggest decline since March 2002. Its 20% fall so far this week would be the biggest weekly loss since trading began in 1994.

It traded to the lowest in nine months as the Bloomberg World Iron Steel Index fell to a 2 year low amid concern that the US government's USD 700 billion ban bailout plan won't be enough to stimulate growth.

Mr Juan Jose Ponce, who covers Cap as an analyst at Santiago based brokerage Larrain Vial SA, said that "Steel stocks are factoring in future price destruction.''

Men of Steel Rebar to become member of Philadelphia 100

Men of Steel Rebar Fabricators has been recognized as one of the fastest growing privately held companies in the Philadelphia region. Men of Steel Rebar Fabricators attributes its success to good old fashioned hard work. In a market place where outsourcing and subcontracting is standard practice, it relies on local talent for success, controlling all aspects of business, in house.

The Philadelphia 100(R) is an annual program conducted by the Entrepreneurs' Forum of Greater Philadelphia, Philadelphia Business Journal and Wharton Small Business Development Center. This year's 20th anniversary event is being held on October 22nd 2008 at the Sheraton Philadelphia City Center.

The event is produced by MAC Alliance and sponsored by Square 2 Marketing, RR Donnelley, Sabre Systems Inc, Rome Technology Limited, Flaster Greenberg PC, CBIZ, Verizon Wireless and Temple University's Fox School of Business, among others.

Men of Steel Rebar Fabricators is a premier rebar and caisson fabricator. Its business strategy is built around 3 main ideas, great products, great service and customer satisfaction. It strives to provide only the best service from engineering to on time job site delivery.

Czech wind power output to multiply in 2009 - Report

A report from Energy Regulatory Office said that the wind power production should increase several times in the Czech Republic in 2009 to around 700 GWh, while estimates for this year are over 100 GWh. The share of wind power plants in the total power production in the Czech Republic would thus reach nearly 1%. In 2007, it topped one tenth of percent and it will remain quite the same this year.

The so called renewable energy sources are having an increasingly larger significance in the Czech energy production, although most experts claim these will always remain in the minority compared to traditional sources of energy.

According to the ERU data, in 2007, they produced more than 2,300 GWh of electricity, which is nearly 3% of total electricity produced and around 4% of power consumed in the country.

According to the data from the analytical company EGU Brno, in 2000, their share in power production and consumption did not even reach 1 percent, with wind power plants contributing almost nothing. In the past several years, the number of wind poles has risen and this year, all Czech wind power plants' installed capacity is 354 MW.

ERU estimates that power production from both the wind and solar power plants should increase in 2009.

SABIC Hadeed to cut rebar prices by USD 192

Reuters reported that the Gulf's largest steel maker Saudi Basic Industries Corp will slash some prices from Monday amid signs of slowing demand.

SABIC, whose subsidiary Hadeed is Saudi Arabia’s largest steel maker, said in a statement prices of reinforcing steel bars will be reduced by SAR 720 (USD 192) per tonne. It did not give details on the current level of prices.


The price cut meant a reduction of between 14% and 15.2% depending on measurements and for steel deliverable to the eastern city of Dammam, which is the closest to Hadeed's plant.

The report cited a steel trader as saying that "SABIC had to cut prices after competitors made similar moves, although none of them were of SABIC's magnitude. It says a lot about the sharp drop in demand.”

Monday's decrease will be the second by SABIC in less than a month after it slashed prices by SAR 175 per tonne last month.

UNISTEEL H1 production declines

The United Steel Industrial Company in Kuwait has produced 266,000 tonne of reinforcing steel during the first half of 2008 against 277,000 tonne during the same period of 2007. While the production of rebars declined during the period, the sales have seen a notable increase.

The volume of the company's sales during the first half of 2008 amounted to 298.500 tonne against 241.000 tonne during the same period of 2007. The sales have been concentrated in the domestic market while no export of any quantity has been made to the neighbouring markets, according to authorized sources.

UNISTEEL has achieved a good return during this year as a result of increasing the sales volume as well as due to the rising prices. The sales price per ton of reinforcing steel during June of this year amounted to KWD 284 against KWD 172 at the same month of 2007.

Monday Market Monitor - MEA (WEEK 40) - Markets closed

Due to Ramadan holidays, the markets remained closed and reopened yesterday only.

On the first day of opening, large numbers of inquiries for buying steel were reported to be floating in the market. They could be real ones as the inventory levels with buyers are reported to be low and as such the construction activities are likely to pick up after holiday.

Or it could be a case of fishing by buyers amid global slowdown.

Egyptian decision on steel imports receives mixed reactions

Al Ahram reported that Egypt’s ministry of Trade and Industry recently decided to allow the importation of steel manufactured according to Gulf standards as well as steel manufactured according to GSO ISO 6935 standards. Prior to this decision, only steel made to Egyptian standards was allowed into the country.

Earlier this year, such a decision would have appeared to be a lifesaver, helping fight prices which at one point reached LE 8,000 per tonne. But with prices on a downward trend, the decision was received with mixed reactions. The price of steel dropped slightly this month to around EGP 6,150 per tonne to EGP 6,300 per tonne down from EGP 6,970 per tonne to EGP 7,750 per tonne last month.

Prior to this recent drop in prices, steel prices were almost double their levels in January this year. The hike was attributed to increased demand from emerging markets and a higher cost of production inputs. Meanwhile, the current price drop is attributed to the global decline in the cost of raw materials such as scrap metal and pellets, which are essential components for the industry.

Local steel manufacturers are not troubled by a decision to allow broader importation. A source at one of the major local producers does not believe that this decision will make such a change in practice. "There was nothing stopping importation in the first place. In fact the Gulf and ISO standards are tougher to abide by than Egyptian standards.”

The source added that “he does not believe that increased imports pose any threat to local production at all. Imported steel has to bear the additional cost of shipping and storage, possibly rendering it more expensive than the local product. In the meantime, local production is already priced adequately and any price fluctuation is dictated by changes in the price of raw materials internationally.”

Mr Patrick Gaffney vice president for equity research at investment bank EFG-Hermes believes that the decision was a move to confirm that the government is committed to open its markets. He does not believe that there will be a significant change in the amount of imported steel, but it will guarantee that local producers follow international prices. Mr Gaffney said that “Because international prices are lower than they are locally, the move will help local prices align with international prices, he said. In his opinion, locally manufactured steel may well end up being priced below imported steel because local manufacturers do not have to take into account the cost of shipping and other expenses related to importation.”

Rights issue by Ezz Steel raises funds for expansion

Daily Star reported that Ezz raised EGP 1.8 billion in a rights issue that closed September 25th 2008 the company reported to Al Mal. Ezz offered every shareholder the right to buy two shares at EGP 5 (par value) each, and 90% of those shareholders subscribed. Ezz announced that it would not reopen the subscription to fill the final 10%.

The company will use these funds for its expansion in Egypt, where it is building two direct reduced iron plants and expanding its flat steel production by up to 1 million tons, and Algeria, where it plans to have 3 million tons of finished steel capacity by the end of 2011.

The company expects this expansion to cost USD 3 billion with two thirds for the Algerian plants and the remainder in Egypt, the total cost will be closer to USD 3.15 billion.

It said that Ezz will issue debt to cover 60% of these investments and use the rights issue and its strong cash flow to fund the rest.

Oil price below USD 100 is too low - Iranian oil minister

According to Iran's oil minister, oil producers are pumping too much oil to the market and a price under USD 100 is too low.

Mr Gholamhossein Nozari oil minister of Iran said that members of the Organization of the Petroleum Exporting Countries should respect their output targets to prevent oversupply from worsening.

He added that "USD 100 and below is not suitable for oil producers or oil consumers.”

But Mr Nozari said that he did not expect OPEC ministers to meet to discuss oil policy ahead of their next scheduled gathering in December in Algeria.

High fuel prices and the wider economic crisis have eaten into oil demand in the United States and other big consuming countries. Concern about slowing demand has knocked US oil to around USD 93 a barrel from a peak of over USD 147 struck in July 2008.

USD 500 million loan to prop up Pakistani economy

Pakistan's central bank said that it has received a USD 500 million loan from the Asian Development Bank to help shore up the country's ailing economy.

Mr Syed Wasimuddin a spokesman of Central bank said that the money is the first installment of a USD 1.5 billion loan designed to support economic development in Pakistan.

He added that the funds will top up Pakistan's foreign currency reserves and help restore some confidence in its sagging currency. Pakistan also faces high inflation and slowing growth.

Kuwait Oil to extend bidding deadline for Al-Zour pipeline

State upstream operator Kuwait Oil Company is extending the bidding deadline for the contract to build a pipeline network serving the planned refinery at Al-Zour for the third time.

As per report KOC has previously twice put back bids from the original deadline of July 24th 2008 at the request of prequalified contractors to allow them more time to prepare their offers.

KOC has not given an explanation for the latest extension, until November 18th 2008 but it comes as Kuwait National Petroleum Company, which is developing the refinery deals with a dispute over contracts, awarded on the 615,000 barrel a day plant.

Parliamentary critics complained that refinery deals were not tendered through the Central Tenders Committee, which evaluates and approves most public sector contracts in the country. The State Audit Bureau is now probing the tender process.

While KNPC has responsibility for the scheme's overall development, control of the supply pipelines falls under KOC's mandate.

Despite the delays with Al-Zour, the other major refinery project in the state, the USD 18 billion Clean Fuels Project to upgrade Mina al Ahmadi and Mina Abdullah refineries is moving ahead.

UOP of the US and France's Axens have been short listed for the contract to supply KNPC with a process license and design package for an isomerisation unit to increase refining capacity.

Firms had been told that the CFP would be delayed while KNPC deals with the dispute over the Al-Zour contracts.

Protest over congestion at DP World terminal in Melbourne

SeatradeAsia Online reported that member companies of Shipping Australia, which represents the major users of Australian wharf and shipping facilities, are meeting with severe congestion at the Port of Melbourne at the DP World facility.

DP World has taken over terminal operations at Swanson Dock in Melbourne. Port users had previously warned the Port of Melbourne Corporation that the continued growth of containers being handled would put existing facilities under severe pressure.

Mr Lew Russell CEO of Shipping Australia said that "Our fears have come to pass. SAL members using the DP World container terminal at Swanson Dock in Melbourne have complained they have been unable to ship out all the empty containers they need to, due to DP World yard congestion.”

He added that “This impacts on the facilitation of Australian trade.

Mr Russell pointed out that "One member alone said they had to cancel 3000 planned empty exports over the past two months. Other members have also experienced problems adding that one problem appeared to be the late handover of the tank farm site from the Port of Melbourne Corporation to DP World which will not now be ready for occupation until late next year.

He added that “There is a need for all stakeholders to work together to sort out a workable solution as soon as possible. Bringing forward the establishment of a new container terminal at Webb Dock must now be high on the agenda.”

Consulting Engineering Services L1 bidder for Batinah Railway study

MEED reported that Consulting Engineering Services is the low bidder for the contract to carry out the feasibility study for Oman's Batinah Railway.

As per report the Indian group is one of a number of local and international engineering businesses bidding to plan the 260 kilometer line which will run along Oman's northern coast. Other bidders include the local Cowi & Partners, Saudi Arabia's Hamdan Consulting and Lebanon's Khatib & Alami and Dar al-Handasah.

Among the international bidders are four UK firms: Bovis, Scott Wilson Railway, Mott MacDonald and WS Atkins; Finland's Modern Engineering; three US firms, Reinhardt Consultancy, Merritt International, and Parsons Brinkerhoff; Germany's Dornier Consulting and DB International; Italy's Italfeer; Systra from France and South Korea's Sunjin and LG International.

The winning bidder will plan all elements of the design for the railway, including passenger and freight services. The line is intended to provide an alternative to traveling by car on the Batinah highway, which runs parallel to the railway's route, relieving traffic congestion.

A winner is expected to be confirmed during October.

Limitless appoints Tristar for Arabian Canal Earthworks

It is reported that Arabian CanalLimitless has appointed Tristar Transport & Contracting for the first phase of earthworks on its USD 11 billion Arabian Canal project.

The contract involves removing more than 200 million cubic meters of earth to be re used to form new landscapes, including valleys and hills up to 200 meters high along a nine kilometer stretch of the waterway’s route. Work on phase one will begin this week, with excavation and land reforming completed in three years. Abu Dhabi-based Tristar is one of 10 local and international companies who were considered for the work.

Mr Ian Raine project director of Arabian Canal said that “Construction of our 75 kilometer Arabian Canal is a mammoth task, so we are splitting the earthworks into around 10 different packages. Tristar will work on phase one and the tender for the second phase will be released shortly.”

He added that “Limitless is also master planning a USD 50 billion, 14,000 hectare waterfront city for 2.5 million people, to be built along the 30 kilometer inland stretch of the canal. Phase one of the development covers 2,200 hectares and will accommodate 600,000 people.”

Kurdistan gas project goes on stream

It is reported that a joint venture of Dana Gas and Crescent Petroleum has begun gas production in Iraq's Kurdistan region. The USD 650 million 50:50 partnership between the two companies completed the first phase in a record 15 months along with a 180 kilometer pipe line to supply gas to the Arbil and Sulaimaniya power plants.

The plants will eventually generate 1,250MW of power. The first phase production from the project is 75 million cubic feet which will be increased to 300 million cubic feet later. The projects will save Iraq about USD 2.5 billion in import costs annually. The project is being executed under a strategic alliance with the Kurdistan Regional Government.

Mr Majid Jafar ED of Crescent Petroleum said that "This is the first project of its kind in Iraq and it will provide important economic and social benefits for the Kurdistan region and all of Iraq.”

Mr Ahmad Al Arbeed the ED for Dana Gas said that "We aim to now build on these achievements in the Kurdistan region and across Iraq, with our strategic focus on maximizing economic benefit and addressing local needs.”

Pakistan to initiate new power distribution scheme

The Daily News reported that Pakistan government, in order to meet severe power shortfall, is initiating several power generation and distribution schemes through utilization of internal and external resources.

For increasing power generation capacity, the government is planning ‘Power distribution enhancement project Phase-I’ scheme with a cost of PKR 3.005 billion with PKR 240 million as foreign exchange component. Pakistan Electric Power Company will be the sponsoring agency and the executing agency is PESCO. The project will be partly funded by Asian Development Bank’s loan and partly by Peshawar Electric Supply Company own resources. The expected time for completion of project is 30 months.

It would help in extension of existing 132KV grid stations and augmentation of transformer capacity at various locations. Under this project, the installation of capacitors within switchyard of the grid stations and on 11KV feeders will be completed. The scheme would help in the completion of Distribution of Power which includes new 11KV feeders and installation of distribution transformers for accommodating new rural/urban customers. The project would help the government to initiate Energy Loss Reduction program of existing feeders.

For additional power generation requirement, emphasis is laid on the development of indigenous resources i.e. hydro, renewable, coal, natural gas and nuclear. The power sector requires immediate enhancement in capacity to meet the economic growth targets. Electricity demand is expected to grow by around 10% per annum during the coming years. To cope with this high growth in demand, it is estimated that Pakistan would require about 2000MW additional capacity annually, which would need to be distributed through transmission and distribution network.

Maersk and Marlink sign fleet broad band retrofit deal

Trade Arabia News Service reported that AP Moller Maersk has signed a contract with Marlink for a large scale retrofit of Inmarsat FleetBroadband across its Maersk Supply Service and Maersk Tankers Fleet.

As per report, the 2 year retrofit program is believed to be the largest in the history of maritime satellite communications with over 150 vessels being converted to FleetBroadband in the first phase. The vessels will be equipped with Thrane & Thrane Sailor 500 terminals.

The order covers vessels operating in all parts of the world. The first vessel in commercial service to be fitted with FleetBroadband and was the ‘Maersk Challenger’, a Maersk supply service vessel. The program includes the possibility for a second phase to convert up to another 150 vessels operated by the Danish shipping group.

Mr Peter Faurhoj of Maersk Supply Service said that “We are dedicated to crew welfare and installation of the relatively small FleetBroadband terminal ensures that we can offer internet to our crews by this autumn.”

He said that “The installation of the FleetBroadband terminals have been outsourced’ to the crews, on all our vessels and have received an installation pack with a computer, Lan Switch, radome mast and fittings. Feedback from the vessels has been that it was easy to do the job and they are very happy. At present the record installation took 3 hours so we can conclude that ‘size matters.”

Slack Chinese demand spells bleak future for steel globally

It is reported that the deterioration in global macro economic steel metals through the remainder of 2008.

As per report, ht in particular, would be steel, whose consumption is slowing in China, the world’s largest producer and consumer of the industrial metal.

Construction activity in China has turned sluggish and this is likely to hit the steel market. Because construction accounts for about half of steel end use demand, a slowdown in construction activity is expected to exert negative pressure on steel demand and, in turn, steel prices.

An industry analyst said in the first half of 2008, prices were driven to unprecedented levels by steel shortage and speculative buying by traders and end users.

The recent weakening of the Chinese demand and a surge in Chinese exports, combined with weaker EU and US orders has led to a major price correction.

WISCO cuts domestic sales prices for November shipments

It is reported that China's Wuhan Iron & Steel Group Corp has informed domestic customers of sales price reductions by CNY 600 per tonne to CNY 800 per tonne in the company's November shipments of various steel products except grain oriented electrical sheets it was learned in Tokyo recently.

The price reductions by the ton are
1. CNY 600 for HR coils
2. CNY 800 for CR sheets
3. CNY 300 for hot-dip galvanized sheets
4. CNY 400 for commodity-grade heavy plates
5. CNY 700 for tinplate
6. CNY 800 for non-oriented electrical sheets
7. CNY 400 for wire rods.

As to grain oriented electrical sheets, the asking price remains unchanged. But it is uncertain whether a price reduction or a flat price applies to ship plates. As a result, Wisco's new price of HR coils translates into USD 651 per tonne before tax, a price level that is lower by as much as USD 81 than what Baosteel Co Ltd is supposed to charge for November shipments. Baosteel's new price translates into USD 732 per tonne before tax.

In this connection, Baosteel's new price of HR coils for November shipments amounts to a bottom price even after a pass along addition of around US$250/ton to meet increased raw materials costs, according to Japan's steel industry sources. Therefore, it is assumable that Baosteel would fall into the red if the company sells HR coils at a lower price level than USD 732 per tonne. Likewise, there are forecasts that even Wisco will face deficits in its operations if the worst happens.

With Wisco's major price reductions this time, there is a strong possibility that Anshan Iron & Steel Group Corp will respond accordingly in its sales of various steel products for November shipments. Ansteel has already brought into effect an additional price reduction of CNY 400 per tonne for October shipments. Also, there is speculation that Baosteel may hold down what the company charges for December shipments as well.

China's various integrated steelmakers are scheduled to start preliminary negotiations from October onward on imports of essential raw materials from Australia and Brazil for shipments in fiscal 2009. In this connection, it is considered certain that China's domestic steel market conditions will work strongly against price increases in raw materials supplies from Australia and Brazil. There are even forecasts that some Chinese steelmakers will opt out of purchases if raw materials prices move up.

US CIT orders reassessment of duties on Chinese silicon

Platts reported that large increases in US antidumping duties on silicon metal from two new shippers of Chinese silicon metal are expected to be implemented following a decision from the US Court of International Trade earlier this week.

Currently, all imports of Chinese silicon metal are subject to a 134.49% antidumping duty rate, except for imports from two suppliers Jiangxi Gangyuan Silicon Industry Co and Shanghai Jinneng International Trade Co. Lower rates for these companies 50.62% for Jiangxi Gangyuan and 7.93% for Shanghai Jinneng in the final results of new shipper review issued by the Department of Commerce in October 2007. Both US domestic silicon producer Globe Metallurgical and the two Chinese exporters appealed the finial result to the CIT.

On October 1st the CIT ruled in favor of Globe in its main claim, which involved improper valuation of by-product silica fume. It rejected all the claims made by the Chinese shippers and directed Commerce to recalculate antidumping duties for the two Chinese suppliers. The court gave Commerce 45 days to submit the recalculated duties to the CIT.

According to the CIT decision both Globe and the Chinese shippers will have 11 days after that date to file objections and Commerce will have a further seven days after that to file a response.

According to Globe's attorneys DLA Piper, any US importer of silicon metal supplied by these two Chinese companies will have to pay much higher cash deposits of antidumping duties on any imports after the new rates take effect. An importer would also face paying much higher duties on previous imports.

Momentive Performance Materials has been the consignee of most of the imported silicon metal from the two Chinese shippers. Up until May 2008, it had received 3,959 tonnes. A further 1,625 tonnes of imported Chinese material was reported in June 2008 but the exporter and the consignee are not identified. However, DLA Piper believes the material concerned did come from the two Chinese shippers.

Monday Market Monitor - China (WEEK 40) - Market closed

Chinese market remained closed from September 29th to October 5th 2008 due to National Day holidays.

It is opening today.

Spanish ACS to buy 30% stake in Citic Construction of China

Economic daily newspaper Expansion reported that Spain’s ACS will acquire a 30% stake in the building division of China’s Citic group in the next few days.

Expansion, citing unnamed sources close to the deal, said a delegation from Citic will visit ACS’ headquarters in Madrid in the next few days to formalize the terms of the agreement, including the purchase of the stake. No financial details of the acquisition have been revealed.

The paper said the main objective of the collaboration accord is to give ACS and China Citic the combined strength to bid for important contracts in Asia, Africa and Latin America.

At ACS’ AGM in May, Mr Florentino Perez chairman announced plans to buy the stake in the Chinese company Citic Construction as part of a wide ranging collaboration agreement reached between the two groups over a year ago. Mr Perez said that “It is very difficult to conceive of a future without China.”

The newspaper said in 2007, over 90%of Citic Construction’s revenues came from overseas, including many non-OECD countries such as Iran, Uganda and Vietnam. It said this business will provide a strong complement for ACS’ European Union and eastern European business focus. ACS owns about 30% of German building group Hochtief.

China calls on rich nations to slash emissions by 95%

Bloomberg reported that China has called on wealthier countries to slash production of greenhouse gases as much as 95% by mid century and leave developing economies with a lower pollution cutting burden.

The Chinese government said