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After L.N. Mittal, now it is Ratan Tata. Tata Steels acquires Corus, the biggest steel company in UK. This will raise the total steel making capacity of Tata to 23 MTPA and will place it 5th in the list of biggest steel companies in the world. A feather in the cap of TISCO and a moment of pride for Indian steel industry.

Infact, this acquisition phenomenon has been in existence since last few years. After the steel consumption centre shifted to Asian region, the steel companies in this region naturally became stronger with a firm backing of rising demand. Indian companies have an extra edge with huge deposits of iron ore and few have already acquired overseas steel businesses. I think such restructuring makes perfect business sense and give good returns on investment to shareholders.

TISCO has always enjoyed a special status in Indian steel industry. It is the first integrated steel plant in private sector and is icon of Indian steel industry for many years. It has its captive iron ore mines and was hailed as lowest cost steel producer in the whole world. As everybody knows, Indian steel industry was decontrolled in 1992 and in next few years many new steel projects were conceived. Essar, Ispat, Jindal, Lloyds emerged as new generation steel business houses on Indian steel horizon. Infact, it was to the surprise of many that a company like TISCO, which was in the best financial and strategic position did not announce any expansion plans except its Gopalpur port based steel project which was ultimately reduced to a cold rolling mill in Jamshedpur itself. But last few years were quite different for Tatas. They came out with a huge capacity expansion plan, both in India and overseas. While Greenfield / brownfield expansion projects in Chattisgarh, Jharkhand etc. are going on, TISCO has also acquired overseas steel companies like Natsteel (Singapore), Millennium Steels(Thailand) etc. It has also planned projects in countries like Iran, Bangladesh etc.

In sixties, India witnessed Green revolution. Nineties was the time for IT Revolution. Now, are we heading for a ‘STEEL REVOLUTION’ ?

D.A.Chandekar
Editor & CEO

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Automobile Market grows over 17% in April-September of 2006-07

The Automobile Market witnessed a growth of 17.12% in April-September 2006 when compared to the first six months of last fiscal. The Passenger Car sales rose by 22.84 percent during April September 06 compared to the same months last year. Utility Vehicle (UVs) sales grew at 12.85 percent during the same period. The cumulative growth of overall Passenger Vehicles sale during April-September of 2006-07 was 20.73 percent.

Overall Two Wheeler market grew by 15.49 percent during the April-September of the financial year 2006-07 over the same period last year. Motorcycles grew by 18.53 percent, Scooters at 0.12 percent and Mopeds Grew at about 6.53 percent over April-September 05. Three Wheelers sales grew at 19.90 percent. Goods carriers grew by 26.16 percent and Passenger Carrier grew at 15.78 percent during the April-September 2006, over the same period last year. Overall Commercial Vehicles segment grew at 36.96 percent. Growth of Medium & Heavy Commercial Vehicle's was 39.92 percent. Light Commercial Vehicles also performed well with a growth of 32.86 percent.

Overall automobile Exports registered 27.43 percent growth rate in the April-September of the year 2006-07 over the same period last year. Passenger Vehicles Exports grew at 13.15 percent. Two Wheelers and Commercial Vehicles Exports grew by 27.80

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Man Industries facility approved by GAZ PROM, Russia

The Company announced that it has got the approval for its manufacturing facilities from M/s Gazprom, Russia. M/s Gaz Prom is one of the leading players in the oil and gas industry in Europe and the approval is significant for the Company since it is diversifying its market across the globe.

Commenting on the developments, Mr. R.C. Mansukhani, Chairman of the Company said “It is highly encouraging to expand our market across the globe and the orders from countries like USA and Nigeria have established our proven track record for delivering quality products around the world. It's our privilege to associate with International Conglomerates to share our expertise and maintain our leadership position in the Pipeline industry”. Mr.R.C.Mansukhani further pointed out that the identification of new markets like USA with huge potential and prestigious approvals on the manufacturing facilities will strengthen the future business prospects of the Company.

With the commissioning of a state-of-the-art line pipe and coating complex at Anjar (Gujarat) in the year 2005, which is the company's second facility in the country, the company has emerged out as a prominent manufacturer of line pipes and coating system on a global level. The total installed manufacturing capacity of the Company is over 2000 KM of Line Pipe and over 5.00 Million Sq. Meters of Coating Systems every year.

With the comprehensive infrastructure and world class facilities, the Company is geared up to execute the booked orders well within the contractual completion periods and is heading firmly to achieve the targeted turnover. The current order book position of the Company including the fresh orders stood at Rs.1700 Crores.

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International Seminar on Clean Development Mechanism Opportunities in Iron & Steel Sector

Climate change is one of the most important global environmental problems. Recognizing threats posed by climate change, many of the countries joined an international treaty under the United Nations Framework Convention on Climate Change (UNFCCC) and became signatories to the Kyoto Protocol, 1997. India is also one of the signatories to the Kyoto Protocol and has access to the carbon market through the route of Clean Development Mechanism (CDM) to fulfill its objective of reducing emission of Green House Gases (GHGs).

Today, India is a fast growing economy. It is taking great strides in manufacturing & production sectors particularly in Iron & Steel Industry. The presence of Indian Steel Industry in the development of energy efficient technologies will significantly push up Indian contribution to the environment clean up programme.

In the context, MECON, in association with JP Steel Plantech Co, Japan and Toyoto Tsusho Corporation, Japan and the other professional bodies is organizing an International Seminar on Clean Development Mechanism Opportunities in Iron & Steel sector on 18th & 19th December, 2006 in MECON Community Hall, Shyamali, Ranchi.

This seminar will deliberate on CDM concept ; CDM opportunities in India ; Transfer of Technologies ; Applicability ; Carbon Trading ; Role of Statutory Authorities, Consultants and Validators with specific emphasis of the Steel Sector.

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Tata to become 5th largest steel producer with corus

Tata to become 5th largest steel producer with corus Corus board accepts $8.04 billion Tata Steel bid; largest shareholder says price low. Eleven months after Corus Chairman Jim Leng travelled to India to meet Ratan Tata and his team, Tata Steel today announced an agreement to acquire Corus, about four times its size, in what is India's largest overseas acquisition. Tata Steel will pay £4.3 billion ($8.04 billion) to emerge as the world's fifth-largest steel company, from 56th now.

The deal is expected to be completed by January 2007 when Tata Steel turns 100. The board of the Anglo-Dutch steel company approved the bid and recommended to the shareholders to support the Tata offer. The board of directors made it clear that they would subscribe to the offer. Their combined holding is 0.1 per cent. Tata Steel will pay 455 pence per equity share and 910 pence per American depository share to Corus shareholders. It also agreed to a deal on Corus pensions, a potential stumbling block, and will pay £126 million ($236 million) into the firm's pension scheme. The Tatas also agreed to increase their contribution to the pension scheme from 10 per cent to 12 per cent till March 31, 2009. Ratan Tata will become the chairman of Corus, which will remain a separate identity for now.

The senior management team will continue. In order to provide a common platform for strategy and integration, Leng will be the deputy chairman of Corus and Tata Steel; another three Corus representatives will join the Tata Steel board while three Tata Steel representatives, B Muthuraman, Ishaat Hussain and Arun Gandhi, will join the Corus board. Ratan Tata, chairman of the Tata group, said: “The union of the two companies is built on a global strategy and is not opportunistic. Corus is seeking to address new markets. Tata Steel also has the same intention.” Tata said the deal valued Corus at a multiple of about 5.4 times underlying earnings before interest, tax, depreciation and amortisation (EBITDA) from continuing operations for the year ended December.

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Jharkhand Govt woos China's Sinosteel

The Jharkhand government has invited the Chinese company to the state, which is still upset with the recent decision of global steel tycoon Lakshmi Mittal to shift his plant to Orissa. The Jharkhand government under former chief minister Arjun Munda had signed agreements with a total of 46 domestic and foreign companies involving a total investment of over Rs 2,00,000 crore.

Madhu Koda and backed by the UPA coalition at the Centre. However, an official delegation of the Jharkhand government met the Sinosteel top brass including its president Huang Tianwen recently in New Delhi and extended an invitation to the company to explore investment opportunities in Jharkhand. The director of industry of the Jharkhand government, Rahul Purwar, said the government made a presentation to the Sinosteel top brass and extended an invitation to the company to visit Jharkhand to explore investment opportunities in the state. He claimed that the Chinese company had responded positively and assured to send a team to Jharkhand to assess the opportunities for investment.

According to a source in the mining sector, Sinosteel was planning to invest in mines and steel plants in India. The company's first priority was Orissa followed by Jharkhand and West Bengal, he claimed. At present, Sinosteel purchased iron ore from India for sale in China. Sources said India exported over 68 million tones of iron ore valued at $5.2 billion to China and this accounted for about 83 per cent on India's total iron ore exports last year. China's steel production had reached 349 million tonne last year.

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Kalyani in talks for Corus arm

The Kalyani group has initiated negotiations with Corus for buying some of the Anglo-Dutch company's units. Corus is into strip products, long products and distribution, and building systems, with a total capacity of 18 million tonnes of steel a year. Sources close to the development said the Pune-based Kalyani group had held high-level talks for a possible acquisition of a part of the business of the London-based Corus.

Both parties were expected to continue discussions this week as well, sources added. The acquisition will be independent of the Tata-Corus deal. The deal, if it materialises, will be in line with Tata Tea-Tetley's, when the Tetley owners sold off their coffee business in early February 2000, and were left with the much larger tea business. Tata Tea had announced the acquisition of Tetley in the end of February. The Corus Group had agreed to sell most of its aluminium assets in March. The details of the units that may be taken over by the Kalyani group could not be ascertained.

When contacted, a Corus spokesperson said, “We are not commenting on market rumours.” The Kalyani group spokesperson said she could not comment on this as Chairman Baba N Kalyani and Bharat Forge Joint MD Amit Kalyani were “in Europe.” The Kalyani group also owns Kalyani Steel, which mainly produces forging quality steel to meet the group's in-house requirements. Tata Steel did not go beyond its announcement last week that it was looking at opportunities “including Corus.” There has been speculation that the bid may wait until Corus pays its interim dividend on October 16.

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A high-level committee of secretaries is understood to have suggested the Bangladesh government to go ahead with the project proposed by the Indian corporate giant Tatas with an estimated investment of about three billion dollars. The committee, headed by the communication secretary Shafiqul Islam, is believed to have submitted a report to Bangladesh's Finance Minister Nizami and said that the proposed project by the Tatas can be given the go-ahead. Tatas, India's biggest business conglomerate, had recently decided to indefinitely suspend work on its three billion dollar investment plan in Bangladesh citing frustrating delays in getting government approval for its investment plans.

Tatas' plan presumably included a steel plant with an annual production capacity of 2.4 million tonne, a urea factory with a one-million tonne capacity, a 500-mw coal-fired station and a 1,000-mw gas-fired power plant. If approved, this would be the largest ever foreign direct investment in Bangladesh, sources said. They also said that the Bangladesh government was not able to okay the Tatas' project, as elections were due in January next year. This was the reason (election and formation of the new government) cited by the Tatas for suspending the work on their three billion dollar investment. They had said the company would continue to monitor opportunities here closely. According to sources, the Bangladeshi government was supposed to have signed a final agreement with the Tatas in July itself.

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The country's apparent steel demand will grow 10 per cent in 2006, thanks to the rising expenditure on infrastructure and construction. This is against the backdrop of the country witnessing a consistent growth of 7-8 per cent. The expected growth rate in apparent steel consumption is the second best only after China's 14.4 per cent, according to an International Iron & Steel Institute forecast. Apparent steel use reflects the deliveries of steel to the marketplace from producers as well as importers. These figures, however, may differ from the amount of steel actually being used with the difference being added to, or drawn from inventories.

According to the Brussels-based institute, domestic apparent steel demand will slow down to 9.1 per cent next year. Apparent steel consumption of China will also come down to 10.4 per cent on the back of stronger credit control and administrative measures introduced by the Chinese authorities. The global apparent steel consumption for 2006 is pegged at 8.9 per cent and is expected to fall to 5.2 per cent level next year. The domestic output in the eight-month period from January to August rose 15.3 per cent, as steelmakers produced 28 million tonne steel against 24.3 million tonne in the corresponding period last year. The global steel demand is expected to rise at 4.9 per cent a year till 2010. During the same period, the demand in India and China is forecast to grow at 7 per cent a year and 8.4 per cent a year, respectively. The rate for the rest of the world is pegged at 4 per cent a year. Projections for 2010-2015 suggest a 4.2 per cent yearly growth in steel demand for the whole world.

For the same five-year period, demand growth in India will is estimated to reach 7.7 per cent a year and that in China 6.2 per cent per a year. The national steel policy earlier laid a production target of 110 million tonne to be achieved by 2020. However, the steel ministry's recent statements have suggested that the target will be revised upward to about 200 million tonne.

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The country's apparent steel demand will grow 10 per cent in 2006, thanks to the rising expenditure on infrastructure and construction. This is against the backdrop of the country witnessing a consistent growth of 7-8 per cent. The expected growth rate in apparent steel consumption is the second best only after China's 14.4 per cent, according to an International Iron & Steel Institute forecast. Apparent steel use reflects the deliveries of steel to the marketplace from producers as well as importers. These figures, however, may differ from the amount of steel actually being used with the difference being added to, or drawn from inventories.

According to the Brussels-based institute, domestic apparent steel demand will slow down to 9.1 per cent next year. Apparent steel consumption of China will also come down to 10.4 per cent on the back of stronger credit control and administrative measures introduced by the Chinese authorities. The global apparent steel consumption for 2006 is pegged at 8.9 per cent and is expected to fall to 5.2 per cent level next year. The domestic output in the eight-month period from January to August rose 15.3 per cent, as steelmakers produced 28 million tonne steel against 24.3 million tonne in the corresponding period last year. The global steel demand is expected to rise at 4.9 per cent a year till 2010. During the same period, the demand in India and China is forecast to grow at 7 per cent a year and 8.4 per cent a year, respectively. The rate for the rest of the world is pegged at 4 per cent a year. Projections for 2010-2015 suggest a 4.2 per cent yearly growth in steel demand for the whole world.

For the same five-year period, demand growth in India will is estimated to reach 7.7 per cent a year and that in China 6.2 per cent per a year. The national steel policy earlier laid a production target of 110 million tonne to be achieved by 2020. However, the steel ministry's recent statements have suggested that the target will be revised upward to about 200 million tonne.

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Bhushan Power and Steel Ltd, a Rs 3,000-crore group in Chandigarh, is expected to raise its output by 40 per cent without any incremental investment. The back-end support provided by its upcoming plant at Sambalpur in Orissa is responsible for the rise in output. Earlier, the company was importing iron ore from Orissa, and then iron ore was converted into value-added inputs at the units located in north. The Sambhalpur unit, located near the source, will process iron ore.

It would be more cost-effective to transport intermediate items, as freight loss will be less. Hot rolled sheets and sponge iron are the main inputs required for the units located in north and Bhushan supplies inputs to the automobile and infrastructure companies of the region. The scale of production in the existing units would be upgraded without any addition of fixed capital as the machines would now run for the longer duration.

The company's foray into power generation at Sambhalpur also helped it register lower costs. Of the 100 Mw of power generated, half is consumed in-house and the balance is sold in the open market through Reliance. An addition of 250 Mw is in the pipeline. If the wheeling of power gets constitutional clearance, this would help in cutting cost further as the units located in states other than Orissa would be able to consume the surplus power generated at Sambhalpur plant.

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KNPC invites 8 local contractors to submit bids for tank farm

State refinery operator Kuwait National Petroleum Company (KNPC) has invited eight local contractors to submit bids by 17 December for the contract to upgrade the tank farms at its three refineries. Bid evaluation will take about three months, with an award due by the end of the first quarter 2007. The 21-month engineering, procurement and construction (EPC) contract covers the relocation of existing tanks and pipeline interface detection systems, and the installation of new tanks for the slops systems and pipeline interface collection. It also covers the supply and installation of 24-inch-diameter pipelines, shipping systems and new pumps and instrumentation. All but two of the local contractors must have an international engineering subcontractor.

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New Dohal Intl airport project contract awarded to local JV

The joint venture (JV) of Greece's Aktor, the local Darwish Engineering, Bahrain's Cebarco and Italy's Cimolai has been issued with a notice to proceed on the airline support facilities package at New Doha International Airport (NDIA). The design and build contract, which was first issued for bid last year, is worth an estimated QR 715 million ($199 million). The contract, due to be completed by December 2008, involves the construction of the emiri hangar, a cargo terminal and car park, and a mail terminal and car park. The other bidders were: a JV of the UK's Balfour Beatty and Athens-based Consolidated Contractors International Company (CCC); Turkey's Enka; and Cyprus-based Joannou & Paraskevaides (J&P Overseas).

The next award on the estimated $5,000 million project is expected to be for the special systems package. The bidders are: a JV of US-based EDS and Team ESX; France's Alcatel; Amsterdam-registered SITA Information Network Computing; and a JV of the France's Thales and US-based Arinc. In addition, bidding is under way for a further four construction packages on the development. US-based Bechtel is the engineering, procurement and construction management (EPCM) contractor on the NDIA project. The client is the NDIA Steering Committee.

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NPCC as lowest bidder for Jebel Dhanna crude oil storage tanks

The local National Petroleum Construction Company (NPCC) is the low bidder for the engineering, procurement and construction contract to build new crude oil storage tanks at Jebel Dhanna in Abu Dhabi. Its $200 million offer is about 1.5 per cent lower than the quote from Turkey's Tekfen. The UK's Whessoe Oil & Gas has quoted about $210 million. The Abu Dhabi Company for Onshore Oil Operations (Adco) contract includes the construction of storage tanks with capacity of 200,000 cubic metres, pumping stations, tie-ins and hot tap connections.

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Chu Kong Steel Pipe Company to supply 300.000 tons

China made progress on exporting oil equipment. On the “2006 China Guangdong- UAE Economic and Trade Cooperation Seminar” held in Dubai, Guangdong Panyu Chu Kong Steel Pipe Company Ltd signed a LASW pipe supply contract with National Iranian Gas Company (NIGC), which involves an amount of USD360 million and is the largest deal in the Seminar. As a state owned enterprise, NIGC holds a natural gas reserve of about 29 trillion cube meters in Iran, which accounts 18% of the whole reserve of natural gas in the world. And the company operates ten large natural gas refineries.

In addition to supplying to the 350 cities in domestic market, NIGC is exporting natural gas to Turkey, Jordan, UAE and Europe. According to the contract that involves an amount totaling USD360 million, Chu Kong Pipe will supply 300,000 tons of pipes. And to secure the delivery on schedule, the company arranges two production lines specializing in producing these materials. Besides, the company has signed supply contract of plates for the pipe production with Baosteel and South Korean companies. The sample of the pipe has passed the check of authorities in China and met the Iranian requirements.

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SABIC announces huge increase in net profit

The Saudi Basic Industries Corporation (SABIC) reported net profits of SR 5.4 billion during the 3Q2006. These profits are the highest ever achieved in a single quarter since the company's foundation, an increase of 19% over the second quarter of the current year and an increase of 12% over the profits in the same period last year. The total net profit for the first nine months of this year amounts to SR 14.2 billion compared to SR 14.7 billion in the same period of the previous year, a decrease of 3.5%.

SABIC Vice Chairman and Chief Executive Officer, Mohamed Al-Mady said the operating profits of the first nine months of the current year amounts to SR 24.8 billion compared to SR 24.7 billion for the same period last year. The share profit for the current period amounts to SR 5.67 compared to SR 5.87 for the same period last year. Al-Mady added that the company's recent profits reflect the improvement in the prices of most products in parallel with the rise in sales to 29 million tons, an increase of 8% compared to the corresponding period of the previous year. The income earned during the period amounts to SR 63.6 billion, an increase of 12% over the same period last year.

Al-Mady said that the 3Q2006 saw the start of commercial operations of the Ethylene Glycol plant at the UNITED affiliate's complex as well as the long steel products at HADEED, thus raising the total production of SABIC manufacturing complexes to 36.3 million tons, an increase of 5% over the same period of the previous year. Al-Mady lauded the achievements of the company during this period, foremost of which is Standard & Poor's upgrade of SABIC's long-term corporate credit rating to 'A+' and the company signing an agreement for the acquisition of Huntsman's European Base Chemicals and Polymers Business, which will enable the company to acquire new assets that contribute to strengthening SABIC's strategy in Europe and further its competitive position in world markets.

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Eight complexes to be built in 2nd phase

Dubai Municipality has completed nearly 50 percent of a $25.9 million project to expand the Used Car Complex in Ras Al Khor given the growing business at the existing premises. The assistant director general for General Projects Affairs at Dubai Municipality, said expansion works during the second phase involve construction of eight steel-structured complexes consisting 74 showrooms whose areas range from 360 square meters to 630 square meters. The total area of the complexes would be 130,000 square meters.

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Bid submitted for Khurais gas pipeline

Local and international companies submitted commercial and technical bids on 9 October to Saudi Aramco for the downstream gas pipeline package on the Khurais crude increment programme. Estimated to be worth $125 million-150 million, the lump-sum turnkey (LSTK) contract covers the installation of a 145-kilometre-long, 38-inch-diameter pipeline from the central processing facility at Khurais to Shedgum.

The bidders include: Lebanon's Contracting & Trading Company (CAT); Tekfen of Turkey; Saipem of Italy; Techint, also of Italy; Suedrohrbau of the Netherlands; US-based Willbros Group, with the local Al-Rushaid Group; Russia's Stroytransgaz, with the local Metal Services for Trading & Contracting Company; and RH al-Marri Establishment (RHM), also local. Saipem and Suedrohrbau are carrying out work on the three main seawater/crude oil pipeline packages, under contracts awarded in early summer. The Khurais increment programme aims to deliver 1.2 million barrels a day of crude by 2009.

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Dubai sees steel futures launch before March 2007

Local and international companies submitted commercial and technical bids on 9 October to Saudi Aramco for the downstream gas pipeline package on the Khurais crude increment programme. Estimated to be worth $125 million-150 million, the lump-sum turnkey (LSTK) contract covers the installation of a 145-kilometre-long, 38-inch-diameter pipeline from the central processing facility at Khurais to Shedgum.

The bidders include: Lebanon's Contracting & Trading Company (CAT); Tekfen of Turkey; Saipem of Italy; Techint, also of Italy; Suedrohrbau of the Netherlands; US-based Willbros Group, with the local Al-Rushaid Group; Russia's Stroytransgaz, with the local Metal Services for Trading & Contracting Company; and RH al-Marri Establishment (RHM), also local. Saipem and Suedrohrbau are carrying out work on the three main seawater/crude oil pipeline packages, under contracts awarded in early summer. The Khurais increment programme aims to deliver 1.2 million barrels a day of crude by 2009.

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Chinese could relax steel rules

The Chinese government could relax rules over foreign ownership of its steel companies as a way to help the consolidation of the country's steel industry, according to Xie Qihua, chairwoman of Baosteel, China's biggest steelmaker. Ms Xie, speaking to the Financial Times at the International Iron and Steel Institute conference in Buenos Aires, said the rule banning foreign companies from taking majority stakes in steelmakers was a “good idea” - but might not be permanent. “As the Chinese economy develops, this ruling could be revised or updated,” she said. “Different stages of development [of an economy] require different rules.” Ms Xie is a powerful voice in the Chinese steel industry because of the size of her company.

Beijing holds a 78 per cent stake in the group, with the rest publicly traded on the Shanghai stock exchange. It is unlikely that she would make her comments about the possibility of a potential change in ownership rules unless they reflected official thinking. Ms Xie also hinted that she could be open to broadening Baosteel's relationship with Luxembourg-based Arcelor Mittal, the world's largest steel company. Asked whether she might be keen to increase what is at present a fairly insubstantial link with Lakshmi Mittal, perhaps through a joint venture or alliance, Ms Xie said: “We'll see.” She described Mr Mittal, president of Mittal Steel, as an “optimist” on China's steel industry.

Mr Mittal has urged Beijing to relax its rules on foreign ownership as a way to help Arcelor Mittal expand in China. But he has acknowledged that such a change will take time. Beijing has viewed the country's steel industry, responsible for about a third of world output, as strategically important because of its role in helping China's strong economic growth. Ms Xie played down fears by some in the steel industry that potential over-production of steel from China could lead to a glut on world markets and push down prices.

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Novolipetsk Steel in talks with Duferco Over JV

Russia's OAO Novolipetsk Steel said that it was in discussions with U.S. company Duferco Participations Holding Ltd. to create a joint venture that would acquire certain steel production facilities currently owned by Duferco in Europe and the US. The main companies expected to be acquired by the joint venture include Duferco Farrell Corporation in the U.S., Carsid SA, Duferco Clabecq SA and Duferco La Louviere SAm all in Belgium, France's Duferco Coating SAS, Sorral SA and Duferco Transformation Europe, and Acciaierie Grigoli S.p.a. in Italy. The transaction, which is subject to the negotiation and execution of a definitive agreement and competition and other approvals, is expected to be completed by the end of the year. No further announcement is expected to be made until the execution of a definitive agreement for the transaction.

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Steel prices may soften over next few months - Experts

Steel and iron ore prices may soften over the next several months as recent idling of some U.S. steel facilities indicates that demand for the commodity is slowing, Ricardo Leiman, chief operating officer of Noble Group Ltd. said. Singapore-listed Noble Group, which had a revenue of $11.7 billion in 2005, trades several commodities globally. "First of all, there's not much likelihood of an explosion in prices. If anything, steel prices may soften in the next few months," said Leiman.

He said Mittal Steel USA's idling of blast furnaces at its Cleveland, Ohio and Indiana harbor facilities this month indicated a slowdown in demand for at least high-cost steel plants. The company said the furnaces would be reactivated when market conditions warrant increased production levels. Mittal Steel USA is a unit of the world's largest steel company Mittal Arcelor (MT).

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US, Japanese automakers argue for end of US Steel tariff

US automakers joined their Japanese competitors to argue before the U.S. International Trade Commission for an end to 13-year-old steel tariffs. They said the steel industry had changed enough in recent years to survive without protection from imports from Japan, Canada and other countries. "The restructuring of steel has created a very different industry," said Mustafa Mohatarem, chief economist for General Motors Corp. (GM). "It is not just an industry that is ready to face competition. It is an industry that needs more competition."

But Robert Lighthizer, a steel industry lawyer, said he doubts that $472 worth of steel in a $27,000 car is causing U.S. automakers' woes, especially when the more profitable Japanese companies are paying the same steel costs as their American counterparts. Steelmakers "are only making $19 per vehicle," he said. "Does that sound like market power to you? That's not even enough for a packet of air fresheners."

The future of the tariffs is crucial enough to jobs and profitability that 11 lawmakers interrupted their campaigning for the Nov. 7 midterm elections and returned to Washington to appear before the commission. Two Michigan congressmen said the tariffs should end. The rest spoke in favor of extending them for five more years against galvanized steel from Japan, Canada, Australia and other countries. One central dispute is how much profit steelmakers are getting from high-end corrosion-resistant steel, 1,000 pounds (453 kilograms) of which goes into the average car. Steel companies say they're earning 5.2%; the car companies say it's 12%

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Posco, Nippon Steel seek to buy 2% stakes in each other

South Korea's Posco and Japan's Nippon Steel Corp. are seeking to buy additional 2% stakes in each other in order to strengthen their technological cooperation, said an official at the Korean steelmaker. Currently, Posco has a 2.17% stake in Nippon Steel, while Nippon owns a 3.3% stake in Posco as part of their alliance.

Posco's chief financial officer, Lee Dong-Hee, said last week the two companies are in talks and a final decision on the stock purchase is likely to be made soon, the official said. The Korean steel maker will soon hold a board meeting to decide on the stake purchase including the size of its purchase, according to the company official. She said that, as an agreement has yet to be finalized, the end outcome could see slightly larger or smaller stakes purchased.

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Mittal Steel Krviy sues USFP

As per reports by dpa German Press Agency and some other local media, Mittal Steel Krivy Rih has filed a court case against Ukrainian State Property Fund over valuatio of 4.8 billion dollar for the Ukraine steel mill. The report said that the issue mentioned in the suit is that USPF concealed some $6.6 million of debt owed by Krivorizhstal at the time of the Mittal purchase and so acted in bad faith. The suit also alleges that the legal framework of the record turnover of the factory to Mittal also suffers from numerous procedural shortcomings. Mittal Steel had purchased Ukraine's largest steel mill Kryvorizhstal for $4.8 billion in an open bidding on 24th October 2005, to make it the largest privatization in Ukraine's history.

Breach of faith suits is a common legal tool in Ukrainian business disputes concerning privatizations. Typically, the company sues in order to change the terms of a turnover of state property to private industry. Incidentally, Ukrainian PM Mr Viktor Yanukovich prime minister of Ukraine, last weekend warned all owners of industrial assets, if they default on the liabilities assumed at the moment of the assets acquisition, the deals may be severed and Ms Valentina Semenyuk chief of Ukraine’s State Property Fund was in Krivoy Rog to confer with the Mittal Steel Krivy Rih management to analyze if all terms of the sale and purchase contract have been observed.

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US Steel industry intensifies lobbying for continuing AD

The lobbying for continuing or revoking anti dumping duty on imports of corrosion resistant coated steel into US is intensifying with the start of hearings by US International Trade Commission of sunset review to determine whether to terminate anti dumping duty on these products. US Steel industry executives and union officials advocated that tariffs on galvanized steel imported into the US must be maintained for the health of American steel producers as without the tariffs, the US market will see a flood of imports as overseas manufacturers look for a place to dump their excess steel.

Mr John Goodish COO of US Steel said that corrosion resistant steel is the crown jewel of the industry and where much of the technical innovation occurs. There is little doubt the price on galvanized products would plummet if restrictions are lifted. Top executives of Nucor Corp, Arcelor Mittal as well as the president of the United Steelworkers union joined in the call for extending the current protections. Galvanized steel represents about 20% to 25% of US Steel's sales, 25% of Mittal Steel USA's sales and about 15% of sales for Nucor's flat rolled products division. Galvanized steel goes into autos, appliances and various construction applications.

According to data provided by the American Iron & Steel Institute, imports of galvanized sheet and strip steel into the U.S. from China during August were 87,586 tons, up from only 7,443 tons for August 2005. For each month thus far in 2006, imports of galvanized steel from China have exceeded year ago levels. The ITC's review on the tariffs comes at a critical time for the steel industry. Though steelmakers have enjoyed several quarters of strong demand and pricing, steel inventories and imports appear to be on the rise amid Chinese threat.

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BlueScope Steel Ltd will open a $211 MILLION coating and painting facility at the Suzhou Industrial Park in Jiangsu Province 80 kilometers west of Shanghai.The new processing facility has an annual metallic coating capacity of 250,000 tons and painting capacity of 150,000 tons. It will produce a range of products for China's rapidly growing building and construction markets as well as supply BlueScope's own downstream network of operations. Ms Kathryn Fagg BlueScope’s president for Asian building and manufacturing markets said “The plant enables us to produce tailored product offerings to respond even more quickly to market developments and opportunities.”

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