STEEL SECTOR NEWS

Steel stocks rose as steel companies have increased product prices early this month. Steel
Authority of India (SAIL), Ispat Industries, Jindal Steel & Power, Tata Steel rose by
between 0.49% to 0.62%.

Tata Steel has raised its flat product prices by about Rs 1,000/tonne with effect from 3
September 2010 on account of a pick-up in demand. Earlier this month, major steel
producers such as SAIL, JSW Steel, Essar Steel and Ispat hiked prices by 3-4%. JSW
Steel increased flat product prices by nearly Rs 1000/tonne. SAIL increased its product
prices by cutting back on discounts. However, the companies have kept the long product
prices unchanged.

With steel imports expected to fall and demand expected to rise during the second half of
the year ending March 2011 (FY 2011), the steel ministry has raised its FY 2011 forecast
for steel consumption to 10% from the earlier target of 9%. Steel consumption rose 9.7%
in the first five months of FY 2011. For the past 2-3 months, steel prices had remained
weak on account of cheaper imports from China and lower demand due to the monsoon
season.

SAIL's FPO expected by next year only :

Much awaited follow up public offer (FPO) of the Steel Authority of India Ltd (SAIL)
can come to the market only by January next year and not before that.

This, said a high official with the Steel Ministry, because some of the regulatory
modalities are yet to get over and so the FPO had to be postponed. Earlier, the FPO was
expected to come up by November.

Talking to media, the official further added that as such SAIL at present is not in dire
need of funding and so it is best not to go for something in a haphazard manner. The
government is waiting for the market to become apt before selling stake in the Navratna
Company.
As of now, SAIL needs to cut down its board and also take in two new independent
directors to be able to come to the markets. Such a change needs clearance from the
Prime Minister's office.

Also November is risky given the fact that the Western countries go for Christmas break
around that time. And since most of the money is expected to be raised through investors
from these areas, it is better to wait.

Tata Steel not to do away with S. African unit :

Indian steel major, Tata Steel has said that it will not be selling off its South African unit
and will be putting in money to revamp and get the operations going. The information
was given by a company official in reply to the queries that asked about its earlier
announcement of selling the unit.

Talking during the sidelines of a seminar organized by the CII, H M Nerurkar, managing
director of Tata Steel said that they had approached the buyers but that is no sign that the
unit is being sold.

During last year, Tata Steel KZN Pte was able to make a profit in 2009-10. So, he added
that there is no point selling the unit if the unit is making profit. He further added that
there are plans to buy ferro chrome ore mines so that the supplies for the company are
secure.

As for the steel company's Kalinganagar project in Orissa he said that the construction
work is going on and that the plant will be over by 2014-15.

For the steel prices he said that they are going to remain at the current levels.

sssssShort Term Buy Call For Jindal Steel & Power :

Stock market analyst Shrikant Chouhan of Kotak Securities has maintained 'buy' rating
on Jindal Steel & Power Limited stock with short term target of Rs 740.
According to analyst, the interested investors can buy the stock with stop loss of Rs 695.

The stock of the company, on Sep 07, closed at Rs 706.30 on the Bombay Stock
Exchange (BSE).

The share price has seen a 52-week high of Rs 778 and a low of Rs 554.44 on BSE.

Current EPS & P/E ratio stood at 17.30 and 40.59 respectively.

Jindal Steel and Power has decided to bid again to get a controlling stake in Zisco
(Zimbabwe Iron and Steel Company), over two months after the African firm
disapproved the Delhi-based company's previous bid.

Naveen Jindal-owned Jindal Steel, Bolivia, a division of Jindal Steel and Power, has
declared that it has received sanction for 3,000 acres additionally to set up its $2.1-billion
steel and power facility in Santa Cruz region of Bolivia.

The Bolivian administration has offered up 3,000 acres for the facility in addition to
approximately 1,000 acres sanctioned previously.

Around 5,000 acres are needed for the plant and the company will utilize the remaining
land for establishing a power generation division near to the steel facility.

ArcelorMittal may get land for steel plant in Karnataka by December:

Reuters reported that ArcelorMittal can start building its USD 6.4 billion steel plant in
India's Karnataka state by December after local authorities compensate displaced farmers.

Mr VP Baligar principal secretary of commerce and industry in the Karnataka

government told Reuters that "First we have to pay the compensation to the farmers. That
process has begun. Then we will take over the land.”

Mr Baligar said that he expects farmers to accept the compensation as it offered them a
price they would not easily get from crop cultivation.
He added that "We have prior experience in acquiring land for industrialization. The only
hesitation may come on the extent of the compensation. We are giving them much more
than they now get.”

Mr Baligar said that most of the land is currently used for growing one rain fed crop in a
year such as barley. He added that "Paying compensation will take about a month's time.
Hope so ... by November-December, at least land will be handed over to them and they
can start the civil works."

ArcelorMittal has deposited INR 3.5 billion with the state which was being used for
payments to the farmers at the rate of INR 800,000 to INR 1,600,000 for one acre.