Boeing sees no change in MRO plans

BEIJING,April 29-- Boeing will complete the first-phase construction of its aircraft maintenance, repair and overhaul (MRO) facilities in Shanghai in October as scheduled despite the sluggish aviation market, the U.S. company said Tuesday.

But the sharp drop in freight traffic as a result of declining world trade has forced Boeing to slow down its plans to perform passenger-to-freighter conversion at the factory.

The factory, Boeing Shanghai Aviation Services Co, was reportedly planned as a major base for Boeing to convert B767-300 passenger jets into freighters.

"The economic downturn has slowed the demand for freighters. Getting into the business where there is little demand will be difficult," said James Brunke, CEO of Boeing Shanghai Aviation Services Co.

International freight traffic started its decline in June 2008, before passenger markets were hit. Cargo traffic plunged 21.4 percent year-on-year in March, which was the fourth consecutive month that international cargo demand was over 20 percent below the 2008 level, according to statistics from the International Air Transport Association (IATA).

Boeing Shanghai Aviation Services Co was launched in 2006. Boeing holds a 60-percent-stake in the company, while Shanghai Airport Authority and Shanghai Airlines hold 25 and 15 percent stakes respectively. It is the first time that Boeing has taken a controlling share in an MRO joint venture.

The company leases a hangar from Shanghai Airlines to perform line maintenance, heavy maintenance checks and borescope services for five airlines. Its own hangar located at the Shanghai Pudong International Airport will be completed in October and can accommodate two wide-body aircraft simultaneously.

"I do believe China is still a viable market. Regardless of what the economic crisis is, it is still important for us to complete the hangar, to develop capabilities and to increase our staff numbers," Brunke said.

The company has 350 employees and it plans to employ over 800 people in the future.

Shanghai Aircraft Manufacturing Factory (SAMF) yesterday delivered the 1,500th shipset of B737-NG horizontal stabilizers to Boeing.

Horizontal stabilizers are placed at the rear of an aircraft and provide stability while the aircraft is flying straight.

SAMF signed a follow-on contract in April last year to supply another 1,400 shipsets to Boeing. The factory is now able to produce 24 shipsets a month.

SAMF also produces doorframes for Airbus A320 freighters.

(Source: chinadaily.com.cn)

China has no intention of giving up setting iron ore benchmark price

BEIJING, April 28 (Xinhua) -- Luo Bingsheng, vice chairman of China Steel Industry Association, said Tuesday that China had no intention of giving up the "initial pricing power" of the ongoing iron ore price negotiations.

Chinese steelmakers are asking for price cuts of more than 40 percent for annual contracts of iron ore. Rio Tinto and Vale have accepted a 20-percent price cut.

There were reports that if Japan and the Republic of Korea (ROK) settled the iron ore price earlier this year in the negotiation, steelmakers in different countries might get a better price, as the steel output in the two countries was declining sharply in the first quarter despite an output increase in China.

Crude steel output rose 1.74 million tonnes year on year in the first quarter to 124.7 million tonnes in China, while large and medium-sized producers lost 3.31 billion yuan (484.9 million U.S. dollars) in the first quarter as steel prices returned to 1994 levels.

Japanese steel output in March fell 46.7 percent year on year to 5.74 million tonnes, dropping for the sixth straight month and that of the ROK was down 21.2 percent to 3.7 million tonnes as global demand for cars and electronics slowed.

"If the iron ore price was in line with our requirements, we would accept it. If others' agreements are not in line with our requirements, we will stick to our own claim," Luo told reporters Tuesday.

He said various miners and steel producers had come to the agreement that the global steel industry would generally see an over-supply this year, so miners should cut iron ore prices for the 2009 annual deal, but there was no agreement on the scale of the cuts.

In the similar development, Michael Zhu, Vale's China president, said Tuesday at an industry conference in Beijing that the Brazilian mining giant would cut iron ore output by 25 percent this year.

The 65-percent price rise of iron ore agreed last February between Japanese, ROK steelmakers and leading Brazilian iron ore supplier Vale set the 2008 benchmark price.

China's leading steelmaker Baosteel in December 2006 beat other buyers in setting the iron ore price for fiscal 2007 with a slight9.5-percent price rise. The lower-than-expected increase was deemed a success for Chinese buyers.

Bulgaria sees no need for immediate introduction of euro

SOFIA, April 9 (Xinhua) -- Bulgarian Finance Minister Plamen Oresharski has taken a stance against the immediate introduction of the euro, saying this would have no significant economic impact, local press reported Thursday.

Oresharski's remarks came in response to International Monetary Fund (IMF) calls on central and eastern European countries to consider scrapping their currencies in favor of the euro even without formally joining the eurozone.

In a confidential IMF report, which leaked earlier in the week, the fund said the eurozone could relax its entry rules so countries could join as quasi-members, without European Central Bank board seats.

"Give me just one reason for concluding a new agreement with the IMF at this stage," Oresharski said, adding that Bulgaria has been considering the adoption of the euro and its impact on the economy for more than 10 years.

"We will do that if we have to, I can see no drama here," he added.

"Bulgaria's entry into the eurozone will have no dramatic consequences," the minister said.

He pointed out that Bulgaria's economy has been adjusted to a fixed currency rate in 1997-2000 at times of cataclysms, fluctuations and problems.

Bulgaria's entry in the eurozone, initially scheduled for 2010,has been set back for some time around 2012. Experts say it is conditional on continued fiscal prudence and lower inflation.

In fact, Bulgaria has yet to join the Exchange Rate Mechanism, the "waiting room" for euro membership, amid concerns about its inflation rates and external trade imbalances. Stricter application of membership criteria has also been a factor in the delay.