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Dear Readers,

Many important issues related to steel industry in Asian region were debated in recently concluded 7th Asian Steel Conference.

Experts were generally positive about the prospects of the industry in coming years though everybody admitted that what will happen after 2008 is still an uncertainty. One can not predict weather China would be bullish even after Beijing Olympic Games. It was pointed out by Dr.S.K.Gupta that economies of some countries flattened after hosting such huge events. Nevertheless, rest of the Asian countries still look fertile for the growth of steel industry. With India's low per capita steel consumption, it was felt that there is a vast scope for the growth and sustained efforts are needed to promote usage of steel especially in housing and construction sector.

Everybody agreed that there is a growing emphasis towards raw materials and availability of materials like iron ore, coal etc. is going to play a major role in the growth of steel industry in future. Also, with the predicted shortage of ferrous scrap, steel production will have to depend more on BF and sponge iron route. It was also felt that for mega projects, BF is the most viable route in Indian context. Apart from the above, the shortage of qualified manpower and also shortage of contracting companies may restrict the growth of the industry in future. In today's open economic model, government has a little role to play in actually running of the industry but, it can surely play a vital role in creating the required manpower for the industry. Also it can act as a mediator for land acquisition process between the industry and the land owners. It can and should ensure smooth supply of iron ore and coal at a reasonable price to the steel industry.

With Indian economy poised to grow nearly at a double-digit rate, Indian steel companies are planning huge Greenfield / Brownfield expansions and also acquisitions in few cases. Indeed, India is surely going to make a bigger mark in global steel sector for years to come.

 D.A.Chandekar
Editor & CEO

 

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VIDEOCON TO SET UP Rs. 15K CRORE STEEL PROJECT IN WB  

The Videocon group, which signed a memorandum of agreement (MOA) with the West Bengal government for a Rs 15,000 crore steel and power project last month, has directly negotiated with land losers near Asansol for 2,000 acres. The direct negotiation with the landowners was a clear deviation from the West Bengal government's stance that the land would be acquired by the government agency West Bengal Industrial Development Corporation (WBIDC). Venugopal Dhoot, Chairman, Videocon Group said that the group had negotiated with 250 landowners who hold around 2,000 acres for land. Around 95 per cent of the landowners opted for compensation in the form of cash. The group had also given an option of shares in the proposed joint venture being set up for the project. However, most of the landowners opt for monetary compensation. The package was over and above the one job offered to each family by the company. Videocon is yet to take possession of the land since the West Bengal Urban Land Ceiling Act does not permit acquisition of such large tracts of land by industry.

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RUMORS MONGER FOR BHUSHAN STEEL TAKEOVER

The Bhushan Steel stocks dropped 13.17 per cent to Rs 1,368.20 last month on the Bombay Stock Exchange, after the company scotched rumours of a dilution of stake. The stocks raised up 45 % earlier on widespread speculation that Sanjay Singal, the elder son of founder chairman Brij Bhushan Singal, was talking to a third party to sell his shares in the company. The speculation suggested that the Aditya Birla group would buy 10 per cent stake in the company from Sanjay Singal.

An Aditya Birla Group spokesperson said they would not like to comment on speculation. Sanjay Singal said he had no intention of selling his stake. Neeraj Singal, Managing Director of Bhushan Steel, pointed out that Sanjay Singal anyway had no right to sell his shares. “As per a CLB order, the status quo on the shareholding of Bhushan Steel and Bhushan Power & Steel should be maintained,” he added. B B Singal moved CLB in August 2006 alleging that the settlement scheme was not honoured by Sanjay Singal. He had also sought valuation of the two companies – Bhushan Steel and Bhushan Power & Steel – so that crossholdings between the two companies could be untangled.

The promoters' stake in Bhushan Steel was equally split between Brij Bhushan Singal and his two sons Neeraj Singal and Sanjay Singal when the family was spilt five years ago. The group split its empire into two – the listed Bhushan Steel and unlisted Bhushan Power and Steel. Chairman B B Singal and his younger son Neeraj manage Bhushan Steel while Sanjay is the Chairman and Managing Director of Bhushan Power & Steel. As on September-end of 2007, promoter's stake in Bhushan Steel was at 64.18 per cent.

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TATA STEEL IN JV WITH AUSSIE CO

Tata Steel recently signed a joint venture with Australia's Riversdale Mining to develop a hard coking and thermal coal project in Mozambique. Tata Steel is to pay around A$100 million to acquire 35% of Riversdale's Benga and Tete licences in the southern African country, which is developing into a region of increasing significance for coal. Coking coal derived from this venture will be delivered to Tata Steel's facilities in Europe, Asia and elsewhere. The mine is expected to produce 10 mt of coking and thermal coal from 2010. Tata Steel managing director B Muthuraman welcomed the deal, saying it gave the company a chance to participate in developing the region as a coal resource for its global operations. This will enhance Tata Steel's long-term competitiveness.

Tata Steel has vast experience of coal mining spanning over several decades and will be contributing technical expertise to the joint venture. Muthuraman said he expected consolidation of the raw materials and steel sectors to continue, noting that BHP Billiton's three-for-one merger proposal with rival Rio Tinto “fits in” with this trend and is a “logical” deal. Riversdale has raised an additional A$235 million to develop the Mozambique resource, which is estimated to represent around 1.225 billion tonnes of coal. Riversdale chairman Michael O'Keeffe welcomed Tata Steel's involvement. “Riversdale has a dominant land holding in a coal region of increasing global significance, a supportive government and a strategic joint venture partner of similar standing in Tata Steel,” O'Keeffe said. “Our overall position and timing could not be better.” Tata Steel is the world's sixth largest steel maker.

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ESSAR MAY PRUNE $1.9 BN PLANT IN INDONESIA

Essar Steel may shelve its plans to construct a $1.9 billion plant in Indonesia, following an adverse ruling by the country's anti-dumping authority. Indonesian news agency Antara reported that Essar Indonesia, the local unit of the Indian firm, will postpone construction of the hot rolled coil (HRC) processing plant in the South-east Asian nation. When contacted, an Essar Group official said, “As a result of the anti-dumping ruling, the company will review its plans for setting up the HRC plant.” “The decision followed alleged dumping against Essar's principal by the Indonesian Anti-Dumping Commission (KADI),” Antara said.

KADI is investigating the dumping allegation filed by companies led by state-run steel maker Krakatau Steel against Essar Steel Holdings and other HRC suppliers from a number of other countries. “Essar said the investment climate is less conducive and there is no guarantee of supply of the basic material in iron ore,” Antara said.

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TATA STEEL INKS MT NIMBA IRON ORE JV IN IVORY COAST WITH SODEMI

It is reported that Tata Steel has entered into a JV agreement with Sodemi for the development of Mount Nimba iron ore deposits in Ivory Coast. The Mount Nimba deposit spreads over 3 countries in Liberia, Guinea and Ivory Coast and is one of the biggest in West Africa. The JV was signed in the presence of Mr. Monnet Emmanuel Leon, Mines & Energy Minister of Ivory Coast, Mr. Momy Guei, Chairman of Sodemi, Mr. Jean Likane, MD of Sodemi, Mr. B. Muthuraman, MD of TATA Steel, Mr. A D. Baijal, VP of TATA Steel and other officials from the government of Ivory Coast and Tata Steel.
TATA Steel has a 75% stake in the project with the balance held by Sodemi. The initial phase will involve exploration and detailed feasibility assessments followed by construction of the mine and other facilities. The mine will start production during the next two to three years. The iron ore from this project will be supplied to TATA Steel facilities, especially those located in the United Kingdom and Netherlands.
Mr. Leon said that, “Ivory Coast is very happy to have identified TATA Steel as its partner for this mega iron ore project. It is a major step towards development of the country and will improve lives in many ways. We are convinced that TATAs have the technical and financial capability along with the experience to undertake this project to a successful implementation.”
Mr. B. Muthuraman said that, “Tata Steel is very pleased to have signed this agreement. TATA Steel has a vast experience in mining, spanning several decades and will introduce the best practices for mining the environment and project management. It is TATA's philosophy to participate in a country's development process. We value our partnership with Sodemi and the government of Ivory Coast.” He added, “An initial study of the Mt Nimba project shows it has reserves of 700 million tonnes to 1 bnt of ore. TATA Steel will complete its exploration of the site within three months and aims to secure as much as 60% of the supplies over the next five years.”
Sodemi is a 100% state owned company formed for development of mineral resources in Ivory Coast. It already has a manganese mining operation in Ivory Coast and a partnership for gold mining and another for drilling.

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MOU SIGNED FOR IRON ORE RAIL LINK IN BASTAR 

Ministry of Railways, Steel Authority of India Limited, National Minerals Development Corporation and State Government of Chhattisgarh have come together to construct a 235 kilometer new broad gauge railway line from Dalli Rajhara to Jagdalpur via Rowghat in Chhattisgarh.

An MoU in this regard was signed among these four agencies in the presence of the Union Minister of Railways, Mr. Lalu Prasad, Union Minister of Chemical & Fertilizers and Steel, Mr. Ram Vilas Paswan, Chief Minister of Chhattisgarh, Dr. Raman Singh and Minister of State for Railways Mr. R Velu. The signatories to the agreement included Mr. KC Jena, Chairman of Railway Board, Mr. Shivraj Singh Chief secretary of Chhattisgarh, Mr. SK Roongta chairman of SAIL and Mr. Rana Som CMD of NMDC.

The project will be constructed in 2 phases. The first phase is 95 kilometer from Dalli Rajhara to Rowghat whereas phase II is 140 Kilometers from Rowghat to Jagdalpur. The cost of this project is INR 968.60 cr at 2004-05 price level. The phase I will be completed in 5 years and the SAIL will bear the entire cost of INR 304 cr. The phase II will cost INR 640 crore which will be shared by Indian Railways with INR 376 cr or 57%, SAIL with INR 141 cr or 21%, Chhattisgarh with INR 76 crore or 12% and NMDC with INR 70 crore or 10%.

The new railway line will include 1 tunnel of 460 meter length, 46 roads under bridges, 16 road over bridges, 42 major bridges and 303 minor bridges. In addition to transportation of ores and minerals, which will form the core activity, forest produces and food grains of the local region, is also proposed to be transported through this railway line. For transportation of mineral ores like iron, dolomite and bauxite, Indian Railway has planned to run goods trains having 58 wagons with diesel traction. Provision of additional private sidings can be considered on specific demands from the Industry.

Mr. Yadav, while speaking on the occasion, said that this new railway line is an important project which will help to accelerate economic development India. The railway line will pass through iron ore rich regions of Bailadila and Rowghat. He added that the new line will also facilitate the bulk transportation of forest products, in addition to transportation of ores and minerals and line will provide lot of employment opportunities to tribal and backward class people.

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MSTC TO LAUNCH ONLINE CEMENT AND IRON ORE TRADING  

MSTC Limited is planning to launch online cement trading within a month besides launching online trading in iron ore. Mr. Malay Sengupta CMD of MSTC said that, “We expect a turnover of INR 4,000 crore through e auctions during the current financial year. The business stood at INR 3,200 crore in 2007.” MSTC has been trading in coal, metal scraps and ferromanganese through its e auction facility.

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ELECTROSTEEL PLANS CEMENT UNIT

The Kolkata-based ElectroSteel Casting Limited (ESCL) will set up a cement plant in Kawardha district of Chhattisgarh with an investment of more than Rs 1100 crore. The company today entered into a pact with the Chhattisgarh government to execute the proposal of venturing into the cement production in the state. The company will set up a 3 mtpa cement plant with an investment of Rs 1150 crore in Kawardha district—about 100 km from the state capital. The additional chief secretary (industries) P Joy Oommen signed the Memorandum of Understanding (MoU) on behalf of the state government while Executive Director of the ESCL, H K Modi represented the company. The pact was sealed in presence of Chief Minister Dr Raman Singh. This would be the first cement plant in Kawardha. Dr. Singh welcomed the proposal and said that it would generate job opportunities for thousands of people.

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SAIL TO TAKEOVER KERALA'S STEEL PLANT

State-owned Steel Authority India Ltd (SAIL) has initiated steps to takeover the ailing Steel Complex Ltd (SCL) owned by Kerala government. SAIL had already conducted two rounds of discussions with company authorities and the state government in this regard. The takeover is expected to bring in an investment of around Rs.3.5 billion to the state. “After the takeover, SAIL is expected to invest in SCL and ancillary units. It has plans to start small units that will help it meet demands from the Kerala market,” said K. Sasikumar, Managing Director of SCL. A delegation from SAIL had visited SCL in the first week of Nov and assessed the facilities at the unit. The SCL is currently producing steel billets, which are used by rolling mills to make iron bars used in construction.

“From June, SAIL has been engaged in participation management with us. SAIL engineers are working here and helping us in increasing the quality of products, in marketing and in the supply of raw materials. SAIL has already drawn up plans to set up a rolling mill at SCL and is working on the project report,” Sasikumar said. The rolling mill will help the unit derive more value for its products, he added. As part of its revival plan, SCL has been expecting aid from the state government and financial institutions to establish a rolling mill. It had earlier submitted a proposal in this regard to State Bank of India. “By having a production unit here, SAIL can effectively compete in the Kerala market. At present they are bringing products from their plants in Bhilai and Durgapur. Due to transport cost, their products are less competitive in Kerala compared with local producers,” Sasikumar said.

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MITSUI HIKES INDIA STEEL STAKE TO 20 PER CENT 

Mitsui & Co, Japan's second largest trader, has scaled up stake in the Ruchi-group-controlled Indian Steel Corporation to 20 per cent by picking up 10 per cent stake for Rs. 65 crore. Indian Steel Corporation will utilise the sale proceeds to part finance the Rs. 950 cr expansion plan, which aims at trebling its production capacity to 600,000 tonnes a year by the third quarter of FY09. The company will fund the project through a mix of equity and debt in 1:2 proportion. It means that the promoters, along with Mitsui, will chip in one-third of the project cost through subscription of equity while the remaining two-thirds will be borrowed from a consortium of banks. Mitsui's contribution to the project now stands at Rs. 80 crore, including Rs. 15 cr it paid for acquisition of 10% stake earlier.

The Ruchi group is bringing in nearly Rs. 250 crore. Over Rs 600 crore will be borrowed from banks. In November 2005, Mitsui signed a joint venture agreement with the Ruchi group for its greenfield project. It happened to be Mitsui's first ever equity investment in the Indian steel products sector. The project would target the booming construction and auto sectors and is located near Kandla. The capacity of the project is 400,000 tpa for cold-rolled steel and 200,000 tonnes for galvanised products including colour-coated products. Mitsui, it may be mentioned, had this year sold out its majority stake in Sesa Goa to Anil Agarwal-controlled Vedanta group.

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STEEL STRIPS WHEELS GETS Rs. 8 Cr. ORDER

Steel Strips Wheels Ltd has received an order for wheel rims worth Rs. 8 crore from Kubota of Japan. It said the Japanese firm would be sourcing 40,000 tractor wheels rims.

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ABHIJEET GROUP TO INVEST Rs. 55K Cr. IN STEEL, POWER 

Abhijeet Group, a steel and mining powerhouse, today said it will invest Rs 55,000 crore to build steel and power plants in various parts of the country, besides planning forays into other sectors. “We would invest around Rs 40,000 crore to build three steel plants with combined production capacity of 10 million tonnes (MT) in Jharkhand, Maharashtra and West Bengal,” Abhishek Jayaswal, Group Director, Abhijeet said. The proposed plant at Seraikela in Jharkhand would produce 3 MT of steel, while the one at Yavatmal, Maharashtra would have a production capacity of 2 MT, he said, adding “the plant near Asansol in West Bengal would produce 5 MT of steel.” “Funding the steel projects is not an issue as banks are keen to provide money. We would borrow from banks and financial institutions in the debt-equity ratio of 65:35,” he said. “We are also planning to go public by 2010 to raise additional resources,” he added.

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ELECTROSTEEL CASTINGS TO SET UP Rs. 1,150 Cr. CEMENT UNIT

Pig iron manufacturer Electrosteel Castings Ltd. said it will set up a three million tonne per annum cement production unit in Chhattisgarh with an investment of Rs 1,150 crore. “The company has signed a memorandum of understanding (MoU) with the Chhattisgarh government for setting up the plant in Kabirdham district,” Kolkata-based Electrosteel Castings said in a statement.

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STEEL PRICE IN INDIA MAY INCREASE DUE TO COST PRESSURES 

Officials of steel companies and analysts, during the recent 7th Asian Steel Conference, said that Indian steel producers may be forced to hike steel prices in the next few months in the wake of the galloping costs of raw materials, including coal and iron ore. Dr. SK Gupta, Director of JSW Steel, on the sidelines of the conference, said that “There will be a marginal increase in steel prices in the medium term. I cannot project the long term impact. But, if raw material costs continue to rise like now, there has to be either more price increases or steel producers will have to cut production.” The report cited an official of Sesa Goa as saying that pig iron prices, similarly, could rise by INR 2,000 to INR 3,000 a tonne in the next 3 months from INR 20,000 a tonne due to the increase in raw material costs.

Mr. Malay Sengupta CMD of Metal Scrap Trading Corporation said that “In the last 3 years, prices of the raw material increased by 300 %. One would normally expect, under these circumstances, a rush of investments in this sector. But it is not happening in India. Once the mining policy is cleared, one may expect a lot of investments to come in and price to stabilize.” He added that the EBT margin of iron ore produces increased from a little over 20% in 2003 to over 45% in 2006.

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SESA GOA EYEING TIE-UPS AND JVS IN INDIAN MINING SECTOR

It is reported that Indian iron ore major Sesa Goa is looking for tie ups with domestic state run and private steel companies for undertaking their mining operations to tap a major share worth INR 12,000 crore in the iron ore mining market. The report cited Sesa Goa source as saying that, “We are open to tie up with anybody if it makes business sense. The Indian iron ore market is poised to grow bigger and with the government's setting an ambitious target of 200 million tonnes for the steel industry by 2020, we envisage a big market opportunity in the mining sector.”

Sources said that Sesa Goa will also be interested in forming JVs with mine owners to develop iron ore mines in the mineral rich states like Jharkhand, Orissa and Chhattisgarh. Sesa Goa enjoys core competence in providing total solutions to those outsourcing their mining operations, including executing turnkey projects exceeding production level of more than 1 million tonne.

Sesa Goa, which has been recently taken over by Vedanta Resources, has invited expression of interest from owners of iron ore mines for undertaking mining operations on their behalf. The efforts of it assume significance with the likely entry of foreign players who are increasingly evincing keen interest in the domestic mining operations, which is bound to make the market more competitive.

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STEEL OUTPUT SET TO QUADRUPLE BY 2020   

  India's steel production capacity will at least quadruple by 2020, catapulting the nation to the world's second-biggest maker of the alloy from the seventh position, said Tata Steel, the cpuntry's oldest steelmaker. Should only 80 per cent of the announced expansion plans be executed, India's capacity will jump to more than 175 million metric tonnes a year by the end of next decade, up from 44 million, Amit Chatterjee, adviser to Tata Steel Managing Director B Muthuraman, said today in a conference in Sydney.

The Steel Authority of India, Tata Steel, ArcelorMittal and Essar Steel are the existing producers that have announced plans to add 99.4 million tonnes of capacity in the next 10 years. Per capita consumption of steel in India is 38 kg, compared with a world average of 189, Chatterjee said. “Indian steel will be big, it will be second only to China by 2020,” Chatterjee said at McCloskey Group's Australian Coal conference. “Stringent” environmental conditions and the displacement of local communities will be the biggest challenges to the growth outlook, he said.

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JSW STEEL OPENS 2 SHOWROOMS IN KARNATAKA 

  It is reported that JSW steel has opened 2 exclusive showrooms for its steel products in Hubli in Karnataka. The showrooms will display and sell products of JSW Steel ranging from HR Coil to color coated steel and long products. Besides, it plans to open 25 showrooms in the Southern and Western region by March 2008.

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JSPL BAGS NATIONAL ENERGY CONSERVATION AWARD  

  Jindal Steel and Power Limited announced that its Raigarh plant has bagged an award for implementation of best practices to achieve energy efficiency. JSPL's Raigarh plant secured an award for the implementation of best practices to achieve energy efficiency. As per report, by the use of modern energy savings, JSPL has achieved 5% savings on gross sales for the year 2006-07.

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CIL INCREASES COAL PRICES  

  It is reported that, for the first time in 3 and a half years, Coal India Limited has increased coal prices across the board by 10% for its subsidiaries and 15% for coal produced at North Eastern Coalfields with effect from mid-December'07. Mr. K. Rangnath, Director, Marketing of CIL, said that, “Coal prices were last revised in June 2004. In the intervening period, the annualized inflation was 5.5% and the actual inflationary impact on the overall input cost to CIL was even more. So it became imperative to increase the coal price.” He added that with effect from the midnight of December 13th 2007, CIL had increased coal prices across the board by 10% for all its subsidiaries and 15% for coal produced at NEC.

Mr. Rangnath said that the long overdue increase in real terms might not be adequate to cover the net impact of inflation over the period of more than 3 years. However, this rise would help in improving the bottom line for the cash starved coal firms like Eastern Coalfields and Bharat Coking Coal. He added that the increase would generate additional income of around INR 763 crore during January to March 2008.

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COAL MINING MAY GET INFRASTRUCTURE STATUS  

  It is reported that coal mining may finally get infrastructure status as Mr. P Chidambaram, Union Finance Minister of India is expected to make the announcement in Budget 2008. As per report, the Energy Coordination Committee headed by Dr. Manmohan Singh, Prime Minister has favored the move and with the power ministry too seeking infrastructure status for coal mining, the coal ministry's case is stronger now.

The report cited an official source as saying that “With the power sector already enjoying infrastructure status, it is felt the same should be extended to coal mining that will now extensively be undertaken by power companies under the captive route. Infrastructure status would enable coal mining activities to boost production required for meeting 78,500 mw generation capacity largely based on coal.” He added that the proposal includes grant of infrastructure status to both coal mining and coal washery activities and is likely to be cleared ahead of next year's Budget.

It would entitle companies in the sector for a 10 year tax holiday. Under Section 80-IA (2) of the Income Tax-Act, a deduction of 100% profit is available to companies for any 10 consecutive years of the first 15 years. It would also enable companies to seek cheaper credit from financial institutions. The coal ministry had proposed duty sops for the industry to achieve economies of scale and increase production of coal to reduce demand supply mismatch. Coal companies would be also able to import capital equipment and spares at concessional rates.

It is noted that the proposal on infrastructure status for the coal sector was rejected by the finance ministry, which did not favor tax sops for a market monopolized by government owned companies. Coal mining, however, is expected to undergo a major change in the coming years with large scale production from captive coal blocks mainly by private sector companies. The production figure from captive mines is expected to rise to over 200 million tonnes in the coming years and these suits the finance ministry that rejected the proposal earlier pending a decision on opening up of the coal sector for commercial mining. The main beneficiaries would be power companies as concessions would make coal production economical that would ultimately help in keeping power tariffs low. Infrastructure status for the coal sector would bring it on a par with other sectors such as roads, railways, oil and laying of oil and gas pipelines.

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CIL SET FOR JHARIA AND RANIGANJ COALFIELDS EXPANSION  

  Coal India Limited has lined up a massive investment plan of INR 14,000 crore to scale up production of coking as well as non coking coal in its Jharia and Raniganj coalfields. Mr. N C. Jha, Director technical of CIL said that, “CIL will invest INR 9,000 crore for the Jharia coalfields and the balance INR 5,000 crore on Raniganj. The funds will be raised through cess to be levied on the sale of coal and also through center's grants.” CIL plans to raise its overall mining area in the Jharia coalfields to 430 square kilometer and feels this can be achieved through the displacement of population. It has also approved the tender document for setting up washeries for all varieties of coal on a build, operate, own and transfer basis.

He revealed that CIL has evolved a master plan for rehabilitation and resettlement for families to be displaced from the Jharia and the Raniganj coalfields and currently, the plan has reached the Cabinet Committee on Economic Affairs for approval. Mr. Jha pointed out that constraint of space in these two coalfields, both of which were densely populated areas is acting as a roadblock for enhanced productivity.

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SAIL TO GRAB A PIE OF STEEL PLANT EQUIPMENT MARKET IN INDIA  

  Steel Authority of India is now planning to enter into equipment manufacturing to cash in on the boom in the domestic steel sector. As per report SAIL plans to convert its engineering shops attached to its steel plants as a separate profit centre to manufacture medium and small equipment for commercial sale and it may also finalize a JV arrangement with an existing equipment manufacturer to scale up its manufacturing activities.

Mr. S K. Roongta, Chairman of SAIL, told that, “We plan to strengthen our existing engineering shops so that they grow beyond in house centers into full fledged manufacturing units and even cater to the requirements of other steel companies. The plan is to convert these into notional profit centers, which could later forge alliance with a joint venture partner and function as a separate entity.” He added that, “Commercial manufacturing of steel-making equipment makes sense for SAIL as it already has expertise in this area. Moreover, the huge investments of over INR 800,000 crore projected in the domestic steel for carrying out ambitious expansion plans, presents enormous business opportunity for the company.”

As per the plan, the engineering shops would be converted into manufacturing facilities capable of making small and medium equipment like fabricated wagons, stores, pipes, and foundry. The shops have already taken statutory licenses for manufacturing of specialized equipment such as high pressure vessels, medium size cranes, electro magnets etc. At present SAIL's engineering shops are used for making small and medium equipment required for captive consumption of the company. These shops are already undergoing expansion as SAIL's steel making capacity is set to increase from 15 million tonnes to 26 million tonnes by 2010.

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DANIELI TO EXPAND INDIAN OPERATIONS 

  It is reported that steel designing and engineering services major Danieli's Indian unit Danieli India would open its second office in Pune with an investment of INR 30 crore and increase the number of engineers at its Kolkata office by 40% by early 2008. Mr. Franco Alzetta, Executive Vice President of Danieli & C, said that, “We will invest in skill set and manpower development to enhance our Indian operations. We are finalizing the site for our new engineering office in Pune that would be in place by the next year.” He added that “Initially, we will hire close to 40 people, who will include skilled engineers and fresh graduates of reputed engineering institutes. We are also planning to collaborate with various universities of Mumbai and Pune to run joint engineering program in future.”

The move underscores Danieli's growing business volumes in India, which would almost double its turnover to INR 1,300 crore in 2008 , from INR 650 crore currently. It has already bagged orders worth INR 900 crore this year and is further targeting to increase it's a market share in steel designing and engineering services by the end of 2008.

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SAIL BAGS SCOPE GOLD TROPHY 2007  

  Steel Authority of India Limited has won the prestigious Gold Trophy of the prestigious “SCOPE Award for Excellence and Outstanding Contributions to the Public Sector Management” for the year 2006-07. The award is instituted by Standing Conference of Public Enterprises and aims to reward recognize and encourage the contribution of public enterprises as well as of outstanding individuals for their vision and leadership qualities in creating national wealth. Bestowed every year after evaluation of established performance criteria by a jury comprising eminent persons and assisted by the International Management Institute, the 5 member jury for the awards was headed by Justice Mr. PN Bhagwati.

SAIL had earlier bagged the SCOPE Gold Trophy for excellence and outstanding contribution to public sector management for the year 2004-05 and special SCOPE Award in the turnaround category for achieving a spectacular turnaround in 2003-04. The SCOPE award for SAIL is in continuance of a number of awards including “India's Employer of Choice 2007” in the PSU category award instituted by CNBC TV18 et al very recently, the prestigious “Business World FICCI SEDF Corporate Social Responsibility Award 2006”, “BML Munjal Award for excellence in learning and development” in public sector category for the year 2006, etc which bear testimony to its ever increasing efforts towards improving efficiencies.

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SIEMENS BAGS EURO 80 MN ORDER FROM SAIL

Siemens Metals Technologies has received an 80 million euro order from SAIL to supply caster's for the modernisation work at the company's IISCO steel plant. The order is for the supply of two new 6-strand billet casters and one new 4-strand bloom-beam-blank combi-caster to be installed at the company's IISCO steel plant in Burnpur, West Bengal, the company said in a release.

Siemens Metals Technologies is a division of Siemens Industrial Solutions and Services (I&S) group. The new casters are a part of the ongoing modernisation and capacity expansion project at SAIL's IISCO steel plant. In addition to engineering, supply of equipment and installation of electrics, Siemens Metals Technologies will also provide advisory services for erection, commissioning and training for all three casters, the release said.

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ARCELORMITTAL TO USE TURKEY AS A SPRINGBOARD FOR REGIONAL EXPANSION

It is reported that ArcelorMittal is aspiring to have a key position in the Turkish construction equipments sector and also expand position in the Mediterranean and Caspian regions. Mr. Gonzalo Urquijo, CFO of ArcelorMittal, while speaking at a press conference recently, after ArcelorMittal expanded its position in Turkey by acquiring 51% of the shares of Rozak AS, said that “ArcelorMittal aims at becoming an important player in the Turkish construction sector.” He said that, “We will establish a rolling mill in Turkey that will have an annual production capacity of 4.5 million tonnes of Steel. We will make an investment of USD 500 million to this end. We will also seek other opportunities to expand our position in Turkey.”

Financial details of the deal have not been disclosed.The deal follows the announcement of ArcelorMittal in October that it will build a USD 500 million new hot strip mill in Gemlik, northwestern Turkey with Borusan Holding.

Mr. Philippe Darmayan Executive Vice President of ArcelorMittal's on the other hand stated that his company wants to become a pioneer in the Steel sector in developing countries. He said that “ArcelorMittal sends some 15 million tonnes of Steel to almost every corner of the world each year. We wish to expand our position in the Mediterranean and Caspian regions. We believe that we will attain our objective thanks to our partnership with Rozak.” Rozak was established in 1983. Since 2003 its production and turnover has grown notably from 104,000 tonnes and a turnover of USD 42 million in 2003 to USD 307 million and 460,000 tonnes in 2006.

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UAE REMAINS JAPAN'S BIGGEST TRADING PARTNER IN GCC  

According to statistics released by Japan External Trade Organization, UAE remains to be its largest trading partner among the 6 nation GCC bloc, as Japan bought 200.3 million barrels of oil during the January to June 2007 period up by 3% YoY. The release added that, the crude oils priced at USD 62.08 per barrel or 2.21% lower, covered 80.8% of the imports and another 11.5% was made up of gaseous hydrocarbons and other petroleum preparations.

While, transport equipment including passenger motorcars, topped the UAE imports from Japan in January to June 2007 period at AED 5.51 billion or 43% of the total Japanese products that entered UAE. According to JETRO, UAE Japan bilateral trade rose by 4.35% to AED 69 billion for January to June 2007 period from AED 66.1 billion. It said that Japan's total imports from the UAE for January to June 2007 period reached AED 56.5 billion up by 1.4% YoY.

Mineral fuels made up the bulk of Japan's imports from the GCC for the January to June 2007 period, with Saudi Arabia as the main supplier with a 35.32% share, followed by the UAE with 34.46% and Qatar with 15.79%. Japan imported 559.85 million barrels of crude oils from the GCC countries during the January to June 2007 period at an average of 3.07 million barrel per day.

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MEA LAGGING IN TERMS OF ENERGY EFFICIENCY IN CONSTRUCTION 

Mr. Michael Ankers, CEO of UK based Construction Products Association said that Middle East is lagging behind the UK in terms of energy efficiency. He said that “I think, there is greater attention in the UK on energy efficiency than here in the kind of products used in construction, the use of water and the use of energy. Energy efficiency has not been as big a focus here as it has in the UK.” He added that, reflecting the global increase in awareness of energy efficiency issues, regional awareness of the importance of energy efficiency is expected to improve with the greater use of solar power in particular.

Mr. Ankers said that the use of off site solutions is another major difference between the Middle East and the UK construction market, with the UK doing more and more work off site for components such as bathrooms. He added that, “There is less focus in this region on off site solutions because labor is plentiful and cheap.

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TENDERS TO BE ISSUED FOR 4 NEW STEEL PLANTS IN EGYPT  

It is recently reported that tenders will be issued to pre qualified companies in early December 2007 for 4 licenses to build new Steel facilities in Egypt. Out of 4 plants, 2 will manufacture direct reduced iron and 2 will produce Steel billets. Each will have capacity of 2 million tonnes a year.

As per report, out of the 17 companies applying to pre-qualify, 11 were short listed and 10 are expected to bid by the mid January 2008 deadline. The bidders include Al Ezz Steel Company, Suez Steel Company and Egyptian Iron & Steel Company, Essar Global and Zoom Developers, both of India and ArcelorMittal. Egypt's present Steel capacity comprises 6 million tonnes per year of direct reduced iron, 3 million tonnes per year of billets and 6 million tonnes per year of Steel bar.

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ITALIAN FIRMS TO INVEST IN TURKISH ENERGY SECTOR 

Dr. Roberto Luongo, Director of the Italian Trade Center said that 9 prominent Italian energy companies will come to Turkey in December 2007 to invest in the Turkish energy sector and to develop cooperation with Turkish companies. He added that a delegation from the 9 companies will arrive in Istanbul on December 6th 2007 and inspect companies with which they plan to cooperate.

He said that, “We want these 9 companies to invest in the Turkish energy sector because they plan to make an investment of EUR 100 million. Italian government urges all countries to invest in renewable energy sources and supports incentives to decrease dependence on oil. Several Italian companies prefer the United States, Middle Eastern countries and Turkey for investment.” He added that Turkey provides a golden opportunity for Italian investors.

He added that, “The annual commercial cooperation between Turkey and Italy is around USD 15 billion. Italian energy firms Rossi and Beneditti will be among the 9 companies coming to assess the investment atmosphere in Turkey.” He added that Turkey is an important geothermal center.

Mr. Luongo further added that, “Our strategy is to make both countries see each other's potential. We conducted the necessary studies on the Turkish energy market. We all know that almost 60% of Italy is dependent on the machinery industry. Italian companies are trying to obtain a significant share in the global market with new initiatives. I believe that Turkey and Italy will take concrete steps for cooperation in the energy sector because Turkey is a very attractive market for Italians.

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PIPE SCRAP SMUGGLING IN PAKISTAN ON AFGHANISTAN BORDER 

It is reported that despite heavy checking at Afghan Pakistan borders, Steel pipes from states of the former Soviet Union are being smuggled into Pakistan through Afghanistan at Taftan, Chaman, Quetta and Waziristan resulting in around PKR 3 billion annual losses to the national exchequer in terms of taxes and a competition to the Gadani ship breaking yards.

As per report, Steel water pipes from states of the old Soviet Union, especially Russia, have found their way into Pakistan and are available much cheaper than the scraps of ships, thus making it difficult for the ship scrap to compete in the market. Mr. Azam Malik chairman of the Ship Breakers Association said that around 20,000 to 25,000 people worked at the ship breaking yard in 1999 but currently the number of workers at Gadani ship breaking yard had declined below 2,000 men only.

According to a report of the Engineering Development Board, illegal import of the substandard material from former Soviet states is reported in the range of 0.75 to 1.0 mt annually.

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CHINESE STEEL EXPORTS TO MEA SURGING   

It is reported that Iran, United Arab Emirates and Syria and other neighbors in Middle East area are importing lots of Steel products from China for infrastructure construction. There is strong demand for such construction Steel as high strength Steel, bars and wires in the Persian Gulf areas. China happens to be a big supplier of such cheap Steel products and most exporters are private and small sized producers.

China's total Steel exports to Iran have reached 2.3 million tonnes in the first seven months of 2007 up by 2200% YoY where as UAE and Syria imports jumped up by 296% YoY and 659% YoY to 1.3 and 5 million tonnes respectively.

According to Steel Association of Iran, the Steel output of Iran for January to August 2007 reached 6.56 mts up by 1% YoY. Mr. Noshahr, Chairman of SAI, pointed out that the fast development of trading between China and Iran has provided pretty good opportunity for Chinese Steel exports. He forecast 6 million tonnes of Steel imports in total till March 2008.

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SUMITOMO, J POWER AND TABREED FORM JV IN UAE    

It is reported that Sumitomo Corporation, Electric Power Development Company Limited and National Central Cooling Company have established a new company called Sahara Cooling Limited in the UAE. Sumitomo and Electric Power Development Co Limited have each invested 30% in the new entity, with the remaining 40% coming from Tabreed.

Sahara Cooling has begun operations after it purchased 6 plants in the UAE owned by Tabreed. Operating funds for the new company will be managed and raised by Sumitomo Mitsui Banking Corporation. With the growing demand for environ-mentally friendly, energy saving district cooling in the UAE and neighboring nations, the 3 companies are planning further expansion of business in the UAE and the surrounding region.

In 2004, Sumitomo and Tabreed established a special purpose corporation called Summit District Cooling Company with 49% invested by Sumitomo and 51% by Tabreed. One project was started by this corporation in October 2006. The new company is designed to build on the foundation established by Summit District Cooling to further expand business.

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TURKISH STEEL MILLS INCREASING THEIR PURCHASES OF SCRAP FROM US    

It is reported that delivery price of HMS scrap from US was posted at USD 361 per tonne CIF in December 2007 whereas shredded scrap price was at USD 366 per tonne and P&S scrap price was at USD 371 per tonne. As per reports, Turkish Steel mill also transacted with European scrap traders and H1 and H2 mix scrap price was posted at USD 343 per tonne CIF.

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HADEED SALES IN JAN TO SEPT UP BY 13% YOY    

Saudi Iron & Steel Company has posted total sales of long and flat products at 3.3 million tonnes during January to September 2007 period up by 13.2% YoY as against 2.9 million tonnes in January to September 2006 period. The sales to the domestic market accounted for 89% of the total sales or 72% long products and 28% flat products.

It may be noted that the total sales of flats increased during the comparative period in 2007 by 26% over the level of 2006. Most of the sales concentrated on the hot rolled products of which the production amounted to 619131 tonnes during January to September 2007 period up by 58% YoY as against 391510 tonnes in January to September 2007 period.

Compared to the increasing sales to the domestic market during the past period of 2007, the volume of exports declined and constituted during the past period of 2007 less than 20% due to the growing demand in the domestic market, for the long or flat products.

HADEED has also increased its production at 3.4 million tonnes during January to September 2007 period up by 19% YoY as against 2.9 million tonnes in January to September 2006 period. It expects its production by the end of 2007 to reach 4.5 mts, which constitutes an increase of 21% over the level of 2006.

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BEHSAZEH'S LIGHT STRUCTURAL STEEL FACILITY IN IRAN COMMISSIONED    

Genesis Worldwide Inc. has announced the commissioning of the new production facility of its licensee Behsazeh Construction Engineering Co in Iran. The new plant will enable Behsazeh to build residences and institutional buildings with greater efficiency and speed.

Using the Genesis Solution, a turn key solution which includes leading edge software, industrial equipment, hardware, processes and engineering services, Behsazeh will utilize the latest version of the C4 custom panel fabrication line, which is a key element of the Genesis technology package. C4 is a light Steel panel assembly line which is designed to maximize production and maintain quality control. As part of the Genesis Solution, Behsazeh will also receive assistance from a team of Genesis experts that support project management and implementation services.

Mr. Mohammadali A. Gholitabar, GM of Behsazeh, said that he believes that by joining the international network of Genesis' licensees, Behsazeh's key goals can now be achieved. He added that “Our business objective is to be the leading building manufacturer in Iran and local regions, with a building solution that is not only quick to assemble but also built to withstand the seismic activity common to the geography of Iran. Our agreement and ongoing relationship with Genesis is an ideal partnership because of its superior products and services and the ongoing support that they provide. We are in negotiations with the govt and other potential clients and are extremely optimistic about the numerous opportunities in Iran.”

Mr. Vince Mifsud, president & CEO of Genesis, said that, “This is another important milestone in the growth of our company by expanding our licensees globally. We are very optimistic about the growth opportunity in the Iranian building market. This is the third plant that we have commissioned in 2007 and therefore we have successfully met our goal of commissioning 3 plants by year end.”

Behsazeh, an Iranian building construction company, recognized the need for alternative safe building technologies due, in part, to the frequent seismic activity in Iran. Iran requires safe schools and housing for its population. Behsazeh has responded to these needs by building its new production facility specifically to produce light Steel structural frames.

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SAUDI ARABIA TO BOOST TRADE TIES WITH PAKISTAN    

Mr. Saleh Al Turki, Chairman of Jeddah Chamber of Commerce & Industry, said that Saudi Arabia is keen to enhance trade relations with Pakistan. He added, “Last year we held a successful joint program and we encouraged Saudi businessmen to meet and interact with their Pakistani co partners.”

In a statement, Mr Shahid Karimullah Pakistani ambassador to Saudi Arabia, said that Saudi-Pak relations in the field of trade and investment go back to decades and both of them have consistently tried their utmost to increase the volume of bilateral trade. He added that “Saudi Arabia is one of the major export destinations for Pakistan.

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Sharq Sohar Steel to start melt shop in Jan 2008  

It is reported that Oman's rebar manufacturer Sharq Sohar Steel Rolling Mills is planning to produce its own stock Steel of 300,000 tonnes per year in January 2008. Its new facilities for Steel production will include a 360, 000 tonnes electrical Steel furnace, a ladle furnace and a 3 stream continuous casting machine.

Sharq Sohar Steel Rolling Mills is the leading producer of high tensile reinforcement bars in Oman. It rolls imported Steel billets and produces about 290,000 tonnes of rebars per year. It also produces about 18000 to 24000 tonnes of rebars with epoxy coating.

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VIETNAM REFUSES TWO FDI PROJECTS TO PROTECT ENVIRONMENT

It is reported that Vietnam Central City's authorities have refused to license two foreign direct investment projects worth USD 2.5 billion, for fear that the steel and paper projects may pollute the environment.

Mr. Nguyen Ba, Party Committee Secretary, Thanh Da Nang City, said that the city had decided to refuse two FDI projects capitalized at USD 1.2 and USD 1.4 bln each. He added that one of the two projects had been proposed by Taiwan's China Steel Corporation, Japan's Sumitomo Metal Industries Corporation and Vietnam's Vedan Enterprise Corp Ltd.

The city is on the course of changing its economic structure, striving for the tourism service industry scheme. Industrial projects must meet the requirements on clean industries which do not pollute the environment. The central city, which is famous for Da Nang beach, one of the most beautiful beaches on the planet, is striving to become the 'environment city' by 2020.

Since the beginning of the year, Da Nang has licensed 24 FDI projects and approved expansion plans with the total investment capital of USD 803.6 million, up by 3.5 times over the same period last year.

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POSCO TO BECOME WORLD'S 2ND LARGEST STEEL MAKER

South Korean firm POSCO, has reignited its Kwangyang Number 3 blast furnace, leading to additional output of 650,000 tonnes, which will result in POSCO's annual production capacity to reach 33 million tonnes making it the second largest steelmaker in the world.

POSCO disclosed in November-end that, the 17-year-operated melting furnace 3 at the Gwangyang steel mill was repaired for fifty-five days and a ceremony was held to light the furnace again. The firing ceremony on this day was attended by more than 200 participants, including Chairman, Mr. Lee Gu-Taek.

It further said that the recent production capacity expansion has equipped POSCO with an annual productivity of 33 million tonnes. Since their Japanese competitors have not developed their production facilities recently, POSCO is expected to rise as the world's second ranking steelmaker following ArcelorMittal.

The repair enables Gwangyang melting furnace-3 to produce 3.85 million tonnes of liquid steel annually. Having completed building the Finex facility scaled at 1.5 million tonne annual production late May, POSCO's productivity is now anticipated to reach 33 million tonnes in 2008.

As per the available figures, output from ace steelmaker ArcelorMittal is around 117.2 million tonnes followed by Nippon Steel, which is capable of producing 32.7 million tonnes. POSCO is expected to narrowly beat the world's second and third ranking Nippon Steel Corporation and JFE Steel respectively, in crude steel productions.

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VIETNAM'S AUTOMOBILE SALES HIT 11 MONTH RECORD 

It is reported that sale of Viet Nam Automobile Manufacturers' Association members reached 10,110 units in November 2007, up by 167% YoY and the highest record so far this year. Viet Nam Automobile Manufacturers said its members have sold 68,388 units during the January to November 2007 up by 97%. It added that Commercial vehicles accounted for 5,452 units up by 235% YoY, while passenger cars made up 2,177 units up by 198% YoY.

In November alone, Toyota Viet Nam sold 2,190 units, followed by Truong Hai Automobile with 1,390 units and the Viet Nam Motor Industry Corporation with 1,335 units. Meanwhile, Viet Nam Daewoo Motors ranked fourth with 1,016 units. November became the first month that Vidamco's sales volume hit the four digit number.

According to initial statistics, manufacturers still have around 10,000 orders. It is forecast that the fever for automobiles still continues and the demand will especially increase when the Tet festival is near.

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SOUTH KOREA TO SUPPLY PLATES TO NORTH KOREA  

It is reported that South Korea provided 5,100 tonnes of steel plates to North Korea during mid-December of 2007, in a six party deal that involved the provision of energy or alternatives to North Korea in exchange for the North's disablement of its nuclear facilities by year-end.

The shipment is the first alternative to oil sent to the North under the agreement, although participants in the six way talks have been taking turns to provide 50,000 tons of heavy fuel oil to the North every month recently. North Korea has requested that half of the economic aid, that had been promised, should be given in energy related equipment mostly steel products for renovating its outdated power plants.

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SOUTH KOREAN CONSORTIUM TO DEAL A COAL PROJECT DOWN UNDER 

A Korean consortium, including state and private companies, is seeking to join a coal development project in Australia. The consortium, consisting of the Korea Resources Corp, the Korea Electric Power Company and other private power companies is in talks with Australian energy officials over joining a bituminous coal development project in the Australian State of New South Wales.

Korea Ministry of Commerce, Industry and Energy said that its Ministry Officials and Company Representatives recently met with the officials from Australian Ministry of Industry, Tourism and Resources in the South-Eastern city of Gold Coast to request cooperation from local authorities.

Korea in its efforts to become more independent in energy sustainability is boosting up overseas resource projects recently, since the country is heavily dependent on energy imports. According to a Ministry Survey conducted in early 2007, the country's investment in overseas resource development is expected to jump more than 80% to AUD 3.78 billion, mainly on increased spending in oil development.

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SPAIN TO INVEST $340 MN IN PHILIPPINES 

Mr. Joseph D. Bernardo, Philippine Ambassador to Spain, announced that the Spanish government is planning to invest $340 million in railway system and wind and power venture in the Philippines. Spain is also currently extending its soft loan to Manila in shipping and power industry.

In a statement he further added that, Madrid is interested in extending a financial assistance package for the construction of 96 steel bridges, construction of 70 modular roll on roll of ports across the country, improvement of solar energy production in central and southern Philippines and a loan assistance facility to the Aboitiz Group and the Spanich company, Socoin for a power project in Southern Philippines.
He said, “At present, the Spanish government is also interested in financing projects through soft loans in the following areas: renewable energy particularly wind and solar power and transport especially train and light Rail Transit.

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INDONESIA NOT TO CAP THERMAL COAL EXPORTS  

Indonesia will not impose a ceiling on coal exports as their domestic demand is still below production. According to data from the Indonesia's energy ministry, Indonesia, world's largest exporter of thermal coal, is expected to produce 196 mt of coal in 2007 with domestic consumption seen at 49 mt.

Mr. Purnomo Yusgiantoro, Energy Minister of Indonesia, said that, “Domestic market obligation for coal is included in contracts but we don't need it because domestic demand is small. We will produce coal based on demand and we won't set a ceiling on exports.” Indonesia was expected to export 147 million tonnes in 2007. He further said that coal output is likely to rise nearly 11% next year as producers increase capacity, but demand for coal is also set to soar as industries switch from petroleum to coal.

Indonesia is expected to consume 75 million and 90 million tons of coal in 2009 and 2010, respectively. The expected increase in domestic coal demand is because of government plans to generate an additional 10,000 MW of electricity by 2010, some of it from coal fired plants. Industry officials said coal exports were likely to slow because of the expected increase in domestic demand. Indonesia is expected to export 148 million tonnes of coal in 2008. Coal exports would increase by only 2 million tonnes to 150 million tons in 2009.

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VIETNAM TO CUT COAL EXPORTS IN 2008  

Vietnam's top coal producer Vinacomin, which mines 95% of national coal output, will have to reduce exports next year by 11% from 2007 to 19.5 mt to save more of its domestic consumption.
Mr. Hoang Trung Hai, Deputy Prime Minister of Vietnam, in a government report said, “The coal industry should calculate to save and use the country's black gold effectively.” He further urged the group to look for coal overseas to raise supply for domestic consumers, mainly power and cement plants. Most of the group's exports go to China and Japan.
The report said that the unlisted group planned to maintain its total production next year at 40 mt, unchanged from 2007. The group also asked to the government to deregulate domestic coal prices so it could raise more funding for new projects.

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TAIWANESE MILLS TO CUT DOMESTIC SS PRICES FOR DECEMBER  

It is reported that Taiwan's stainless steel mills including Yieh United Steel Corp and Tang Eng Iron Works have announced to reduce their domestic stainless prices on stainless steel hot rolled product prices by TWD 2,000 per tonne effective from December 2007. Meanwhile, the price of stainless steel cold rolled will be cut by TWD 3,000 per tonne. However, the export prices at both companies will be reminded unchanged. It also said that Yusco will also hold its 400 series stainless steel prices steady for December 2007.

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SOUTH KOREAN CRUDE STEEL OUTPUT IN 2008 TO RISE 6.2% YOY 

South Korean crude steel production will increase by 6.2% YoY in 2008 due to its commissioning of new furnaces. The Korea Iron & Steel Association in a report said that South Korean steelmakers are expected to make 54.6 million tonnes of crude steel in 2008 as compared to estimated 51.4 million tonnes in 2007. The report added that domestic demand plus inventories will also gain by 4.2% to 57.1 million tonnes as shipyards build more vessels.

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PHILIPPINE' POWER CORP ISSUES TENDER FOR THERMAL COAL PURCHASE  

It is reported that state run Philippines' largest power producer National Power Corporation has issued tenders for purchasing of 1.08 million tonnes of coal with a total budget of USD 78 million for its three remaining coal fired power plants for next year. A pre bid conference was during mid-December of 2007 and the bid opening date would be during first week of January 2008.

The tenders contained in three separate bid invitations are for 6 lots of 65,000 tonnes of coal for the Sual plant with an approved budget of PHP 1.16 billion and 6 lots of 65,000 tonnes of coal for the Pagbilao plant at a budget of PHP 946 million. The tender notice on Napocor's Website also showed it is seeking to buy 300,000 tonnes of coal locally for its Naga Cebu plant with an approved budget of PHP 1.15 billion. No delivery period was specified.

Napocor said that Masinloc and Calaca will need 1.67 million tonnes of coal next year. National Power Corporation is left with three coal run plants after it sold its Masinloc and Calaca plants to private investors this year, as part of a government privatization program. The government expects to turn over the 600 MW Masinloc coal fired plant to Singapore's AES Transpower Pte. Ltd. before the end of 2007 and the 600 MW Calaca plant to Suez Tractebel, a unit of France's Suez Tractebel, early 2008.

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HYUNDAI STEEL ORDERS HEAVY-PLATE ROLLING MILL  

Hyundai Steel Corporation, South Korea, has placed an order with SMS Demag, a co. of the SMS group, Germany, for the supply of a 5-m heavy-plate rolling mill. The new facility is being built in Dangjin on the east coast of South Korea and will go into operation in late 2009. The supply scope comprises the mechanical and automation systems for the entire process line, with finishing stand, hot plate leveler, cooling beds, shearing line and finishing line with cold plate leveler. The new works is designed for the production of plates in widths between 900 and 4,800 mm and thicknesses from 6 to 200 mm.

Hyundai Steel would concentrate above all on the manufacture of ship plates, though it will also be supplying plates to the construction and mechanical engineering industries as well as pipe grades. The annual production is around 1.5mt of finished plate and can be expanded to 2mt by installing a roughing stand. The mill stand possesses a rolling force of 100 MN and is equipped with CVC plus technology to enable close profile and flatness tolerances to be observed. The plate cooling system is designed as a laminar cooling system.

Provision has already been made for expanding the system to include a pre-leveler and spray cooling. All SMS group is, under the roof of the holding SMS GmbH, a group of companies internationally active in plant construction and mechanical engineering for the steel and nonferrous metals industry. Furthermore, the dividing and cropping shears are of closed-type design, which serves to further optimize the cut-to-length accuracy and edge quality above all for high-strength plates.

The mill is equipped not only with a hot plate leveler but also a cold plate leveler in 9/5 design with an extended leveling range, thus ensuring excellent plate flatness. The entire automation system will be set up in our test facilities beforehand and tested according to the Plug & Work concept. Plug & Work simulates the production sequence and allows the automation functions to be tested and optimized under realistic conditions prior to installation in the works.

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BAOSTEEL ORDERS A ROUGHING STAND FOR HEAVY-PLATE MILL  

Baoshan Iron & Steel Co. Ltd. (Baosteel), China, has placed an order with SMS Demag, a company of the SMS group, Germany, for the supply of a new roughing stand for its 5-m heavy-plate mill in Shanghai. Baosteel's heavy-plate mill, which was built by SMS Demag, has been in operation since March 2005 and will raise its annual production from 1.4 to 1.8 mt as a result of the expansion. The new roughing stand will also make it possible to produce plates in thicknesses of up to 400 mm, which are playing an increasingly important part above all in ship-building. The feedstock for plates in these gages is blooms of up to 1,000 mm thickness. The roughing stand, with a work-roll barrel length of 5,100 mm, will have a rolling force of 108 MN, like the finishing stand. It will have hydraulic adjustment systems and rapid mechanical roll presetting so as to enable short reversing times.
A special revamping concept will allow the expansion to take place without non-scheduled stoppages. Already at the end of 2007, the roller tables upstream and downstream of the roughing stand area are to be revamped to enable special-purpose vehicles to remove the hot slabs downstream of the de-scaler and to re-introduce them upstream of the finishing stand. Thus they would be able to erect the roughing stand completely and put it into operation without needing to interrupt the production. The first plate is to be rolled on the new roughing stand in December 2008.

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SOUTH KOREAN CRUDE STEEL OUTPUT IN 2008 TO RISE 6.2% YOY  

South Korea crude steel production will increase by 6.2% YoY in 2008 due to commissioning of new furnaces. The Korea Iron & Steel Association said that South Korean steelmakers are expected to make 54.6 million tonnes of crude steel in 2008 as compared to estimated 51.4 million tonnes in 2007. The statement added that domestic demand plus inventories will also gain by 4.2% to 57.1 million tonnes as shipyards build more vessels.

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ARCELORMITTAL TO DOUBLE CAPACITY OF ITS BRAZILIAN MONLEVADE PLANT 

ArcelorMittal has announced that it has decided to double the capacity of its integrated long products of Monlevade plant located in Brazil's Minas Gerais State, which produces wire rod. It currently runs one blast furnace, which was commissioned in 2000. The doubling of the plant's capacity will occur through the construction of another blast furnace, which will add over 1 million tonnes.

On expansion to 7.5 mts of ArcelorMittal Tubarão, Mr. L N. Mittal, President & CEO of ArcelorMittal, said that, “The decision to construct a new blast furnace in Monlevade is part of the Group's recently announced growth plan, which aims at increasing shipments by 20% by 2012 through organic growth alone. It was recently taken by the Group's Board of Directors and Group Management Board is now set to implement it. Work on the ground will begin shortly.

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IRON ORE PRICE NEGOTIATIONS – RIO SEES SUBSTANTIAL INCREASE 

According to Mr. Sam Walsh, CEO, Rio Tinto, the long term contracted iron ore benchmark prices will see substantial growth in 2008 on the back of tight market supply. During a shareholder meeting he said that, “The 2008 benchmark iron ore price negotiations have kicked off in Asia and Europe, taking place against the backdrop of spot prices from India to China that are approaching USD 200 per tonne. The iron ore market is tighter than it has ever been, so a very substantial price increase can be anticipated.”

He further said that the spot price from India to China is currently nearly USD 100 higher than this year's benchmark price. Iron ore demand is strong and getting stronger, not only in China, but also in India, the rest of Asia and the Middle East. He added that, “We are addressing the freight differential as a major part of the current price negotiations.” He added that the company also expects Renminbi appreciation, meaning domestic Chinese producers will face rising costs in US dollar terms, which will reinforce the position of low cost producers like Rio Tinto.

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JAPANESE STEELMAKERS TO HIKE CRUDE STEEL OUTPUT  

It is reported that Japan's Nippon Steel Corp, Sumitomo Metal Industries Ltd. and Kobe Steel Ltd. plan to spend a combined JPY 250 billion to boost their domestic crude steel production capacity by 7% by 2012. Nippon Steel will spend JPY 100 billion to add about 1 million tonnes of capacity a year at the No. 2 blast furnace at its Kimitsu works in Chiba Prefecture, near Tokyo. It said that in 2009, the company will raise the capacity at the No 1 blast furnace in Oita Prefecture, western Japan by 1 million tonnes annually to 5 million tonnes.

The Nikkei said that Sumitomo Metal will invest JPY 140 billion to upgrade one blast furnace in 2009 and another in 2012 at its mill in Wakayama Prefecture in Central Japan lifting capacity there by 1.2 million tonnes a year. It added that Kobe Steel will add 300,000 tonnes of capacity at its Kobe mill in western Japan. In 2006, crude steel output reached 32 million tonnes at Nippon Steel, 13.4 million tonnes at Sumitomo Metal and 7.8 million tonnes at Kobe Steel.

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COLOMBIAN STEEL IMPORT DOWN BY 14% YOY IN SEPTEMBER 2007

  It is reported that Colombia imported steel products of about 170,000 tonnes in September 2007, reducing its steel import for two months in a row. Also, it is a big drop from 193,000 tonnes if compared to the September 2006.

According to the data released by Colombian government, total steel import in September 2007 was about USD 123 million based on CFR item up by 14% YoY. Colombian steel import during January to September 2007 was 1.51 million tonnes down by 13.2% YoY as compared with January to September 2006.

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US COAL EXPORTS TO DOUBLE TO 20 MT IN 2008 

According to McCloskey's conference on US Coal Imports 2007, which has focused on renewed export activity as much as on the original planned agenda, US coal exports are likely to double to 20 million tons in 2008. A panel representing industry and trade publications said that deals have been made and rail and port arrangements made, totaling at least 20 million tons for next year.

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ARGENTINA TO INCREASE DUTIES ON RAW MATERIAL EXPORT 

After rising custom duties on oil and agriculture export products, Argentina government has initiated a plan for raising custom duties on raw material products. Argentina's exportation has reached USD 250 million this year from USD 150 million in 2005. The great volume of raw material export has caused domestic metal supplies tight, and even making the cost of producing coinage higher.Currently, Argentina exporter had to pay 10% custom duties on all the raw material.

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ARCELORMITTAL WANTS GLOBAL STEEL EMISSIONS DEAL  

Mr. L N. Mittal, Head of Global Steel Giant ArcelorMittal, during a news interview told Belgian business daily De Tijd that the steel industry should be covered by a global deal on carbon dioxide emissions. He believed that a level should be set for the allowed emissions per tonne of steel. Steel producers below that level should be given a credit, while those above would be forced to buy credits. He added that, “In this way you make the sector invest in efficient solutions so as constantly to improve its technology.”

He added that, “ArcelorMittal is investing millions to reduce emissions at its plants. But I think that we need a sector deal on the environment for the whole of the steel industry. An average Chinese steel plant emits twice as much carbon dioxide as a European one. But the Chinese steel can be imported into Europe without any problems.” Mr. Mittal said that European Commissioner for Industry, Mr Guenter Verheugen, supported this idea and planned to set up a committee of experts next year with steel representatives.

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IBS FORECAST BRAZIL STEEL PRODUCTION IN 2007 TO SURGE 10% YOY  

According to the figures from Brazilian Iron and Steel Sector Association, this year Brazilian steel output is reported at 34 million tonnes in 2007 so far, up by 9.9% YoY as compared to 2006. IBS in a statement said that in 2008, Brazil is expected to produce 37.6 mts up by 10.8% more than 2007, though installed capacity will be at 41 mts by the end of 2007.

It added that the internal sales are due to jump by 18% in 2007 to 20.6 million tonnes while apparent consumption is to rise 19.7% to 22.1 million tonnes. Internal sales of flat steel products is expected to increase 17.8% while apparent consumption to go up 20.5% mainly due to record automotive production in addition to improvement in the oil and gas sectors, agricultural heavy machinery and appliances. IBS without providing figures said that long steel owes its performance to renewed housing construction driven by better availability of mortgage credit.

In exports, IBS said it expects Brazil to ship abroad 10.5 million tonnes of steel this year, 2 mts less than previously forecast and 15.6% less than in 2006. But because of increased steel prices, this year's export revenues are to total USD 6.8 mn, only 1.4% less than last year. IBS said that Brazil is forecast to import 1.6 mts of steel in 2007 or 12% less than in 2006.

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ARGENTINA STEELMAKERS GAS SUPPLY ISSUES TO GO ON IN 2008  

Argentina's steel sector may continue to be affected by problems with gas supply in 2008. The report quoted Ms Victoria Santoella an analyst with Santander bank in New York as saying that "The problem might stay similar to what we saw in 2007 but it will depend on the companies since some are more protected than others.”

She explained that steelmaker Siderar has a better chance of gaining access to power but Acindar is more vulnerable to spot prices and has less access to power that's available on the market. She added that however, pending the success of ArcelorMittal's bid to gain 100% control over Acindar, the local company would have more opportunity to invest in energy.

Ms. Santoella said that, “The company itself already had enough money to be able to invest in that. It hasn't done so but maybe it will change its mind. It obviously wasn't prepared for the shortage.” The Argentine government made the decision to cut gas supply to industry in May after residential demand increased as a result of the onset of cold winter temperatures. According to Argentine economic consultancy IES, The decision caused iron and steel production to drop in January to September 2007 compared to the year ago period.

According to figures from the Latin American Iron and Steel Institute, Steel output in the period dropped 8.1% to 3.9 million tonnes while primary iron production fell by 7.3% to 3.16 million tonnes.

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WORLD STEEL MARKET TO REMAIN STRONG TILL 2010 

According to analysts from Taiwan's Industry & Technology Intelligence Services, a market research institution, after suffering a recession in 2001, the global steel market bottomed out and began recovering in the past two years, with prices being pushed upward by strong demand from China.

It predicted that due to continuous mergers and acquisitions among suppliers around the world, the steel industries performance outlook is rosy up to 2010. According to an industrial report issued by Industry & Technology Intelligence Services, global demand for steel products will amount to 1.198 billion tonnes this year, up by 6.8% YoY and will further grow by 7% to 1.279 billion tonnes in 2008. The report added that among countries with strong demand for steel this year and next are India, China, Saudi Arabia, Iran, Russia, Turkey, Brazil, and Mexico, with the first four all posting annual growths of over 10% in steel consumption.

Industry & Technology Intelligence Services also pointed out that in general, steel manufacturers tend to carry out acquisitions whenever a recession hits the industry. The resurgent market of the past few years has bucked this trend with surprising wave of mergers all over the world, in which quite a few large steel firms have acquired small and medium sized companies in the Asia Pacific, Central and Western Europe and Latin America.

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SOUTH AFRICAN GOVERNMENT LAUNCHES COAL GAS JV  

It is reported that South African government launched a JV with NT Energy UK and Bataung Strategic Investments to extract coal bed methane, in which these partners would invest USD 10 billion over three years. The government's Central Energy Fund and NT Energy Africa made up of South African company Bataung and NT Energy UK had formed a venture called GasCo. The venture will explore 250,000 hectares in South Africa's Limpopo, Free State and Mpumalanga provinces for reserves.

Mr. Kinesh Pather, Managing Director of Bataung said that, “The development of sustainable sources of alternative energy has become a strategic priority for South Africa, and coal bed methane and the conversion of gas to liquid fuels provide a real, clean and long term alternative to the current energy mix.” He added that the cleaner alternative energy would reduce reliance on imported energy, cut energy costs, boost employment and was environmentally friendly.

Africa's biggest economy has suffered increasing power black outs in recent years as ageing electricity infrastructure fails to keep up with rapid economic growth. Methane gas found in coal seams is sold and used in a similar way to natural gas. The project aims to secure energy for South Africa's booming economy and increase the use of cleaner fuels..

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ABRAZIL SLAB EXPORT PRICES LIKELY SURGE IN Q1'08 T 

It is reported that the slab prices from Brazil to the main European markets are expected to up by USD 10 to USD 30 per tonne in the next first quarter, reaching the CFR prices at USD 600 per tonne. The main reason for the hike is due to the strong demand and tight supply.

Actually, Brazil's export price of slab dropped by USD 40 per tonne in the third quarter because of North America domestic weak demand for carbon steel hot rolled coil. The report further added that ArcelorMittal is also targeting an increase in price of slab at its mills in Brazil and Mexico in the first quarter of 2008 and the price is expected to rise by USD 10 to USD 30 per tonne to reach USD 500 to USD 520 per tonne.

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JAPAN LIKELY TO CANCEL IMPORT DUTY ON HC FERROCHROME  

Japan is like to cancel its import duty on high carbon chrome ferrous iron and that this new duty policy will be implemented in next April 2008. Currently, Japan's import duty for high carbon chrome irons, including three rates of general, WTO and preferential duty rate which is 7.2%, 5.3% and 3.18% respectively. Due to the high cost of chrome, the stainless steel mills asked for reducing import duty on chrome in order to gain the competitiveness. According to the statistics, the total amount of imported high carbon chrome irons from January to October '07 reached JPY 808 billion with the volume of 726,000 tons, and import duty income totaled JPY 4.3 billion.

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EU STEEL USERS LOBBY OPPOSE AD MOVE ON CHINESE STEEL IMPORTS  

It is reported that European steel users would face supply shortage if the European Union takes anti dumping measures against importing steel from China. Mr. Adrian Harris secretary general of European engg. assn. Orgalime said that, “I am a little bit surprised by the decision.” He said that a preliminary analysis made by his organization actually found no dumping in the case. He added, “We are not against fair competition, but it should be fundamentally free and fair trade if there is no dumping. We will wait and see.”

Mr Harris said the EU steel users need Chinese steel products to meet their demand since the European market is now under supplied, causing high prices for consumers and record profits for local steelmakers. He said, “The market needs to be adequately supplied.” According to Orgalime, the EU's engg industry uses about two thirds of steel produced in Europe but has to rely on imports due to a lack of supply from local steelmakers. It said that the relatively cheap Chinese steel has helped EU industry to maintain competitiveness on the markets.

Earlier, the European Commission published its decision in the EU Official Journal to launch an anti dumping investigation into certain hot dipped metallic-coated iron or steel flat rolled products imported from China. Orgalime represents national groups, including big steel consumers such as Siemens, ABB and Alcatel Lucent plus many smaller firms.

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USA INCREASES STAINLESS LONG PRODUCT IMPORT  

Specialty Steel Industry of North America has reported that US stainless steel bar and rod import for the first 8 months was up by 12% YoY while import for stainless steel wire remain unchanged. The US consumed 158,500 short tons bar up by 4% YoY and 43,730 short tons rod down by 1% YoY. The consumption for wire was 55,800 short tons down by 2% YoY. Imports of stainless long and flat products in August rose by 2% YoY to 550,870 short tons, while the consumption was 1.54 million short tons.

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ARCELORMITTAL QUITS LAIWU ACQUISITION DEAL  

It is reported that a plan by ArcelorMittal to buy in to Laiwu Steel Corporation has fallen apart because China is wary about foreign investment in its strategic industries. The report quoted ArcelorMittal as saying that that the parent group of Laiwu, one of China's steel makers, had de