November, 15 2005
Indian government to focus on steel R&D
The Indian government will start a steel R&D mission aimed at "attracting the best minds in India and abroad" for networking to promote research in the sector, according the Union Steel Secretary, Dr Mano Ranjan. As part of its National Steel policy, the Centre will set up a Steel Research and Development Mission in the next three months We have not set any limit to the corpus for the mission, which will be managed by technologists and scientists, he said, adding that initially perhaps Rs. 50 crore would do. The government's objective was to make India figure among leading generators of iron and steel technology within a decade.
In his address to the 43rd National Metallurgists' Day function and 59th annual technical meeting of the Indian Institute of Metals (IIM) on Monday and subsequent interaction with the media, Dr. Mano Ranjan said that even while using the existing research facilities, the mission would "pioneer" new projects and market the technologies that they developed.
He said the present outlay on R&D by the steel industry was only 0.26% of its turnover, compared to the national industry average of 0.8% and developed countries' performance of 2.5%.
High grade Iron ore availability key to new investments
Steelmakers have announced plans for setting up steel mills in India because of rising local demand, lower wages and access to the world's sixth-largest iron-ore reserves, advantages that have made TATA Steel Ltd. one of the world's lowest-cost producer. But failure to get permission to tap the deposits and a dwindling supply of higher grade ore may wipe out the cost advantage, causing projects to stall, said Mr RK Dang, former steel and mines secretary.
We may have more than 20 billion tons of reserves but only high grade ore is used by most steelmakers in India,'' amounting to as little as 1 billion tons said Mr Dang. India will lose its competitive advantage of being a low-cost producer once the high-grade ore is exhausted.'' He added
It's going to be a hard task to secure high-quality iron ore in India with most of it lying under forest land,'' Mr Alfred Wong, Singapore based UOB Asset Management analyst, said.
We don't have as much iron ore as the statistics show and most of our reserves are on paper.'' said Mr Sajjan Jindal, Vice CMD of JSW Ltd.
SAILs spokesperson said that SAIL has been waiting for 15 years to get environmental clearance to develop a mine in Chhattisgarh state and it's a wonder how the state governments are allotting iron ore to all these companies considering we have not yet been able to get the forest clearance,''
As much as 65 percent of India's known iron ore deposits are in forested areas, said Mr Prafulla Samantray, an environmentalist from Lokshakti Abhyan based in Orissa who had earlier opposed an alumina venture between Alcan Inc. and Hindalco Industries Ltd.
The country will need to cut back its iron ore exports to ensure supplies for all these'' new plants, said Mr Jim Lennon, an analyst at Macquarie Bank Ltd. Even if all the steel plants were built and secured supplies of ore, there may not be enough local demand for steel, Mr Lennon said.
Land acquisition hurdle cleared for TATAs new mill in Jharkhand
It is reported that acquisition of land in Tontoposhi village under the Seraikela Kharswan district for the construction of a Greenfield steel project of 12 million tonne by TATA Steel, where some oppositions was reported by locals, has been cleared
Several thousand people from Tontoposhi and nearby villages, led by the leader of the opposition of the Jharkhand Assembly and Jharkhand Mukti Morcha (JMM) leader, Sudhir Mahto, carrying traditional weapons gheraoed the office of the DC protesting the move of the administration for acquisition of land now occupied by their villages for Tata steel's new steel project.
However, the DC of Seraikela Kharswan satisfied the agitating villagers by pointing out that false information was being given to them and that some leaders had been misguiding them in the matter. He assured villagers that Tontopshi would become a "Greater Jamshedpur" if the project went through.
Jharkhand government eyeing auto component industry
Jharkhand government is planning to promote the state as the auto component hub of the world. Jharkhands CM Mr Arjun Munda said here today that the state would soon appoint a global consultant to draw up a strategy to project the state as a desirable location for manufacturing of auto components. Mr Munda said the state government was considering a proposal to declare Jharkhand as a free economic zone for the auto component industry.
According to Mr Munda, the development of an industrial hub for auto components was a natural forward integration measure for the state, which had rich iron ore resources. The state already had several automobile component manufacturing units near Jamshedpur and so the stage was set for development of the zone into a global hub, he added
Electrosteels ductile pipes agreement with YWSL likely to be extended
Indian Electrosteel Casting, which has been supplying ductile iron pipes and fittings to the UK based Yorkshire Water Services Ltd YWSL since 2003 under a three year contract, expects the arrangement to be extended for another two years.
Electrosteel Castings Ltd. is a water infrastructure company, which provides techno economic solutions in the area of water supply and sewerage systems critical to the conservation and management of depleting safe potable water resource.
The Company manufactures ductile iron pipes with installed capacity of 2,00,000 tonnes per annum, the largest in India, and also makes ductile iron pipe fittings necessary for providing a safe water supply pipeline system, having a longer service life.
Mukand takeover by Bajaj denied
Mr Niraj Bajaj and Mr Rajesh Shah, responding to reports in a section of the media, denied any move to takeover Mukand Limited by the Bajaj family. The two, on behalf of the Bajaj and Shah families, said the two families share a strong and unique business relationship and have jointly owned and managed the company in the most amicable manner for the last seven decades and intend to continue to do so in the future.
Mr Shah and Mr Bajaj further stated that the media report has overemphasized the importance of a very nascent proposal, namely the application made by the Company, for the consideration of the Jharkhand government, to set up a steel plant. The plant, subject to feasibility, can be implemented in phases over a period of time, they said in a release here today. Both the promoter families will bring in funds, if and when necessary, to ensure the growth of the Company, the release added.
Forensic teams visit blast site in Himachal blast site
A day after an explosion in the Jawala Steel Mills in Solan district of Himachal Pradesh, forensic teams from Shimla and Chandigarh today visited the blast site and lifted samples for laboratory examination.
One of the team officials told that splinters from the blast site were collected for laboratory examination. He also said that besides collecting splinters from the blast site, the teams also examined the furnace to find the exact cause of the explosion.
Mr PL Agarwal and Dr BN Singh honored
The Lifetime Achievement Award of the Steel Ministry was presented on the occasion to Mr PL. Agarwal, former Chairman of SAIL, and the National Metallurgist Award to Dr BN Singh, CEO of JSW during 43rd National Metallurgists' Day function and 59th annual technical meeting of the Indian Institute of Metals (IIM) on Monday.
TopIndian shipping industry needs to improve to catch with China
India's shipping industry is lagging at least 10-15 years behind China's, according to a report, however, it does have the potential to perform better and close the present gap.
"The Chinese shipping industry is at least 10-15 years ahead of India in terms of technology and efficiency, but India does have the potential to bridge the gap," said Mr Henk G Lacet, an international maritime expert from Holland. However, he said that it would be unreasonable to expect the Indian shipping industry to reach international standards over-night. Mr Lacet said India should use the long coastline to its advantage and develop more ports. He also noted that the availability of cheap labor could boost India's maritime capabilities.
It is reported that Chinese are much more organized and they take much less time for completion of projects which adds to their efficiency. A vessel which took 3 years to build in India would have been completed in a year and a half in China
With a coastline of 6,000 km and navigable and potentially navigable inland waterways of nearly 14,500 km, together with its strategic location in South Asia and a booming economy, India is still only ranked 17th among the world maritime nations. The Indian shipping industry consists of about 616 ships, with a total capacity of 7.1 million DWT. Of these, only about 258 ships are engaged in overseas trade and the rest ply on inland routes.
China, on the other hand, is already recognized as a shipping superpower with an ocean going fleet numbering more than 1,500 with a capacity of 37 million DWT, bringing it up from the 12th rank position in 1978 to the current fourth.
Indian government mulls setting up SPV for rail corridor
The Indian government is planning to set up a special purpose vehicle for the proposed Rs 22,000-crore rail freight corridor by March 2006. The debt equity ratio of the SPV, to be modeled on the lines of the Delhi Metro Rail Corporation, is expected to be 70:30.
Railway ministry officials said the project maybe included in the works program for 2006-07 and is likely to be part of the Budget for next year. With the proposed debt-equity ratio, the SPV would be able to raise about Rs154bn, while the rest would be provided through equity. State-owned coal, steel and power companies may also chip in with funds to finance the project
RSP observes Quality Day
Quality is the fundamental need to survive, grow and sustain, said Dr Sanak Mishra, MD of SAILs Rourkela Steel Plant, while addressing the inaugural function of the Quality Day celebrations. Underscoring that, the core of quality lies in quality of life, Dr Mishra said.
He went on to describe the four key aspects spirituality, ability to be in harmony with nature, prosperity and safety. The MD also emphasized on carrying out physical activities which will ultimately lead to improvements in every endeavor. Underlying the fact that quality is a relentless journey, Dr Mishra exhorted the RSP to collectively think, plan and execute the tasks methodically and rigorously so as to take the plant forward in the path of quality at a quick pace
US Steel plans to increase tinplate prices
Pittsburgh based US Steel is reported to plan to increase transaction prices of its tin mill products by 6% in January. U.S. Steel, the largest tin mill products producer in North America, made the pricing announcement to customers last Friday.
The other key market suppliers, Mittal Steel of Chicago and Dofasco of Hamilton, Ontario, have yet to announce pricing intentions for 2006.
Tinplate producers are engaged in their annual contract price and supply negotiations with North American can makers during the seasonal fruit and vegetable pack when mills shipments typically perk up.
Eight month US mill shipments were 1.97 million net tons, down from last year's through August volume of 2.08 million. Imports, however, improved to 386,800 tons from 329,200 through August of 2004
Baosteel likely to cut steel prices for Q1 2006 due to oversupply
Baoshan Iron & Steel Co Ltd Baosteel, China's largest steelmaker, is likely to cut steel prices for the first quarter of next year due to an oversupply on the domestic market, as per a report in local daily citing a Baosteel source
China's steel prices started falling in April and slumped sharply in late September, with prices of hot rolled steel sheets dropping 40-50% by the end of September compared with March.
Argentinean government approves sale of Acindars seamless tube unit
It is reported in a daily that Argentina's government has approved a deal for steelmakers Siderar and Siat to purchase Acindar's seamed steel tubes and profiles division. Under the deal Siat would pick up Acindar's steel tube plant in Villa Constituci, while Siderar would secure tube and cold formed product plants in Rosario and San Luis. In May all parties signed a letter of intent for the sale of the assets worth US$83.2 million.
The economy and production ministry announced that its technical coordination office accepted a recommendation from the country's antitrust regulator CNDC to approve the deal between the companies with certain conditions. One of the conditions forces Siderar and Siat to offer hot and cold-rolled sheet coils under non discriminatory terms to current and future producers of seamed steel tubes and profiles. It also required the buyers to implement specific accounting records for the tubes and profiles unit, which makes it easy to analyze "at any moment and under equal conditions" prices and other conditions for the steel coils traded.
Acindar is Argentina's largest producer of long steel, and is controlled by Brazilian steelmaker Belgo-Mineira. The company exports 25% of its production, primarily to Bolivia, Brazil, Chile, Peru and the US.
Siat is a unit of Luxembourg-based steel pipe manufacturer Tenaris and Siderar is part of the Latin American steelmaking giant Ternium.
Kumba hits peak on iron ore price outlook
Shares in South African iron ore producer Kumba Resources shot up five per cent to a record high yesterday on expectations of higher prices for the commodity from April next year, analysts said.
Kumba, majority owned by Anglo American, is the world's fifth biggest iron ore producer. Kumba is usually not directly involved in price talks, in which bigger producers meet with steel mills to set prices.
The iron ore talks do not begin until next month, but international steelmakers, who were forced to accept a price increase of more than 70% this year, have been publicly speaking out against another big price hike. Still, many analysts expect a price increase of between 10% and 20% next year.
Venezuelan Sidors workers threatens strike
It is reported that the negotiations between a Sidor workers and the board of the Venezuelan steelmaker to draw up a timetable to sell company shares to workers have ground to a halt, causing the labor union to threaten strike action. The talks were called to establish a timetable to sell 2.86 million shares as part of the final sale of shares to eligible workers.
This final sales round is part of Sidor's workers participation program, which aims to transfer the remaining 10.39% piece of Sidor as part of an arrangement to give workers 20% ownership in the company
Sidor, controlled by Techint, finished its privatization process in 1998 and will be part of the recently created steelmaking group Ternium, which includes Mexican steelmaker Hylsamex and Argentina's Siderar. Sidor's plants, which produced 3.4Mt of steel products in 2004, are in Puerto Ordaz in southeast Venezuela's Bolar state.
Nippon Steel & Sumikin lowers November SS prices
Nippon Steel & Sumikin Stainless Corp., Japan's largest stainless steel producer, cut prices of its nickel-based sheets this month after nickel prices fell.
Tokyo-based company, known as NSSC, cut prices for its 304-grade steel by 10,000 yen ($85) to 290,000 yen a metric ton, Mr Yosuke Sakai, manager at the planning department, said Nov. 14. The company had left prices unchanged last month at 300,000 yen. NSSC may leave rates unchanged next month as it expects nickel prices to fall further, Mr Sakai said.
Nickel pries which rose to a 17 year high on May 12, have declined by a fifth since September 1 to $11,810 a metric ton.
NSSC is 80% owned by Nippon Steel Corp and 20% by Sumitomo Metal Industries Ltd., Japan's third- biggest steelmaker. NSSC's Hikari Works plant can produce 550,000 tons of nickel-based steel a year.
Freight rates may drop next year as new ships arrive
Top Asian shipping lines expect freight rates to fall next year, the first time in five years, as a record number of new ships are delivered and congestion eases at major harbors, says a report in newsletter Exim News. According to the report, analysts forecast that the decline in rates may pave the way for alliances and takeovers.
Mr Park Jung Won, CEO of Hanjin Shipping Co, said that next year the capacity to ship containers may outpace demand. A similar view is held by Mr Yasuhide Sakinaga, chairman of Japan's third largest shipping company, Kawa-saki Kisen Kaisha Ltd ('K' Line). He said that container rates might fall by 5%.
"There's just too much capacity coming into service," observed Mr Jee Heon Seok, a Hyundai Securities Co analyst in Seoul, adding that the situation has been caused by the "greed" of the shipping lines. "They will have to increase efficiency by reorganizing their fleets, mergers and acquisitions or other measures to cope with falling rates," he said.
Salzgitter raises 2005 earnings forecast on cost cuts
Salzgitter AG, Germany's second largest steelmaker, said earnings this year will be at least 17% higher than forecast because it's cutting costs as demand rises for tubes used in oil pipelines. Earnings before taxes will be at least Euros 700 million ($824 million) in 2005, company said in a statement to the Frankfurt stock exchange as against previous forecast of pretax profit of Euros 600 million.
Salzgitter is benefiting from a 37% gain in oil prices this year that is spurring the oil and gas industries to invest in new production and order more tubes. New orders for steel products recovered in September, a trend which is likely to encourage spot market prices to stabilize further,'' Salzgitter said in its quarterly report. The tubes division increased shipments substantially and raised prices across all product groups.'' Sales in the third quarter rose 14 percent to Euros 1.75 billion.
Salzgitter has said it also plans to raise prices next year, to pass on higher energy and raw materials costs.
A quarter of Salzgitter is owned by the German state of Lower Saxony, which has said it plans to keep its stake until at least 2010.
Mittal Steel in talks with China's Kunming Iron to set up a JV
Mittal Steel is reported to be in talks with China's Kunming Iron & Steel to establish a 50:50 JV with total investment of Yuan 20 billion as per Mr Hao Shudong, the president of Kunming Iron & Steel. 'We hope we can reach an agreement,' Mr Hao said.
Kunming Iron & Steel Co Ltd, which has total assets of Yuan 21.28 billion, originally planned to raise HK$ 1.8 billion from an initial public offering in Hong Kong earlier this year, but the offer was delayed due to the sluggish performance of steel issues on the stock market.
SK shipbuilders to demand more steel plates
South Korean shipbuilders demand for steel plates is expected to continue to rise next year due to an increase in orders. The Korea Shipbuilders Association forecast the industrys demand for steel plates will reach 5.4 million tons next year, up 300,000 tons from this year.
Industry sources predict the demand for steel plates is likely to amount to 6 million tons by 2008, a steady increase from 4.6 million tons in 2004.
South Korea, which dominates the industrys global market, has the worlds top three shipbuilders Hyundai Heavy Industries Co., Daewoo Shipbuilding & Marine Engineering Co, and Samsung Heavy Industries.
Russia to boost investment in metals industry
Russia's investment in the country's iron and steel industry is expected to reach 90 billion rubles ($3.1 billion) in 2005, a 23.3% increase YOY as per Mr Vladimir Lavrishchev, deputy director of the industry department of the Industry and Energy Ministry. He added that the investment in the non-ferrous metals industry could reach 75.1 billion rubles ($2.6 billion) this year, up 15.5% from 2004.
Mr Lavrishchev said the metals sector accounted for 5% of Russia's GDP, 15% of industrial production, and 18% of the country's exports.
The ministry forecasted rolled metals production at 54 million tons in 2005 and demand at 28 million tons, a slight increase against last year. "Russia exports more than 70% of its non-ferrous production," Mr Lavrishchev said, adding that the United States, China, and Iran remained the country's major importers of metal products. However, export prices on world markets have declined this year due to "the emergence of China as a large metals exporter."
Mr Lavrishchev said Russia's non-ferrous metals imports totaled $2 billion in 2004, up 40% year on year. The ministry has set up a working group comprising government officials and businessmen to draft proposals designed to develop the sector, he said.
Electrical steel prices in US likely to rise in 2006
Improving spot market sales of electrical steel are pushing average Q4 selling prices up 3-4% higher than the third quarter. Demand for the higher-priced electrical steel products is robust, according to US producers AK Steel and Allegheny Ludlum, which is likely to result in even-higher contract prices in 2006.
The world average price for CRGO steel is around $2,040/net ton, with wide differentials depending on the region. In the U.S., its $2,720/ton.
AK Steel, the largest US producer said that spot orders of CRGO are completely sold out for this quarter, and the Ohio mill cannot keep production on pace with demand. Allegheny Ludlum also is described as being in a position of pricing strength as it has been able to both raise base prices and pass through raw material input costs on its electrical steel grades effective November 1. "
Looking out into 2006, we believe average AK Steel contract pricing should be up due to this recent rebound in spot prices, cost-push pressures and the recent price rise in grain oriented electrical steel," agrees analyst Mr Mike Gambardella at J.P. Morgan Securities. In addition, thinks Allegheny Ludlum will look for significant price increases in its long term contracts, "many of which were priced two to three years ago when prices for such products as grain oriented electrical steel were much lower."
CMC acquires Norfolk rebar fabricator
Commercial Metals Company, headquartered in Irving, Texas, has announced the acquisition of substantially all operating assets of Norfolk, Virginia, reinforcing steel fabricator Hall-Hodges Company. The Norfolk facility, which began operations in 1925, will join the CMC Steel Group and operate as part of CMC's Rebar East Group of facilities that fabricate reinforcing steel and supply construction products to contractors throughout the Eastern United States.
Mr Jeff Selig, CMC Steel Group Executive VP and East Rebar Regional Manager, said, "The acquisition will strengthen CMC's presence in the eastern Virginia area and improve our opportunity to grow in the region. We will retain Hall-Hodges' skilled work force and management team to meet our goal of providing the best product and service to our customers."
CMC and its subsidiaries manufacture, recycle and market steel and metal products, related materials and services through a network including steel mini mills, steel fabrication and processing plants, construction-related product warehouses, a copper tube mill, metal recycling facilities and marketing and distribution offices in the United States and in strategic overseas markets
Russia's NLMK eyes London IPO
Russian steel maker OAO Novolipetsk Iron & Steel Works is aiming to float its shares on the London Stock Exchange around the second week of December. The company would be the second Russian steel group to take that path this year, following the initial public offering of Evraz Group SA in the second quarter. But in contrast to Evraz, NLMKs shares already trade in Russia, although with poor liquidity as the free float is under 10% of outstanding shares and over 85% of the company is controlled by Mr Vladimir Lisin.
Its plans for a global depositary receipt program already have been approved by the Federal Financial Markets Service, the Russian stock market regulator.
The source said that joint lead managers UBS (UBS) and Merrill Lynch (MER) haven't yet agreed with the company on the size and terms of the offering.
Bill aims to aid steel using suppliers
Users of steel and other raw materials should get a say before government decides to impose or continue punitive tariffs on imports, an automotive suppliers' group says. If they could make their case, members of the Motor & Equipment Manufacturers Association say, more tariffs would be cut. The costs of steel and other materials would come down, MEMA argues.
The Commerce Department and International Trade Commission can adopt duties that penalize importers for selling below cost in this country
Polish shipyards in talk with IUD for SBQ plates
It is reported in a local daily that the Polish Shipyard Corporation (KPS) and Centrala Zaopatrzenia Hutnictwa (CZH), a company supplying the national steel sector with raw materials, has begun talks with Donbass concerning the supply of ship steel to polish shipyards.
According to Mr Jerzy Konopka, KPS president: "Joint orders of domestic shipyards will allow KPS to negotiate a better price." The value of the contract could reach zł.600-700 million.
Ukrainian ferrous scrap down to $184 per ton
As per a report from a web site Ukrainian steel smelters and ferrous metal scrap collecting companies signed an agreement on supplies for November-December 2005 at 930 hryvnias per ton ($184) on November 9.
Entering the Agreement, the scrap collectors undertook an obligation to meet needs of the domestic metal combines. The country's Ministry of Industrial Policy believe the Agreement will help the domestic metallurgical flagships keep prices lower amidst the unfavorable state of the global market.
The previous agreement in October was reached at 950 hryvnias per ton ($ 188).
Delphis future to be clear by mid December
Delphi Corp. CEO Mr Robert "Steve" Miller says he expects to know by mid December that what plants and operations the bankrupt auto parts supplier and parent of Delphi Thermal & Interior in Lockport intends to keep, sell or shut down.
"Every plant in the U.S. is losing money, and unless we are able to address the loss operation, we will have to sell or close it," he said. "In some cases, we are reasonably confident that if we can get the same kinds of labor agreements that other unionized US based suppliers have, there is a good shot in a number of cases that we can keep the plants open," he said.
Delphi Corp., US's largest auto parts supplier and the second largest in the world, filed for Chapter 11 protection on Oct. 8. It listed assets of $17.1 billion and liabilities of $22.1 billion. The company, which posted a $4.8 billion loss in 2004, also has reported a $788 million third quarter loss, which represents a further worsening from the $119 million loss reported for the same period a year ago.
Delphi has asked the unions for help in easing its financial troubles, but since the bankruptcy filing has seen antagonism grow because of Miller's insistence that employees accept the deep cuts in pay and benefits.
Miller acknowledged that one of those who contacted him personally was Wilbur Ross. Ross has made a fortune by acquiring pieces of the steel, coal and textiles industries. One of his buys was Bethlehem Steel, which Miller also led through bankruptcy court. "Wilbur called me to say that if we ever got to the point of selling assets, he wanted to take a look. But we are not in active discussions at this time," he said.
Bekaert 9 months sales up by 11%
Belgian steel cord and advanced materials group Bekaert said it posted consolidated sales for the first 9 months of 2005 of Euro 1.44 billion up by 11% versus the same period last year. The rise in sales was due to organic growth of 10%, with 2% growth from the net movement in acquisitions and divestments, offset by adverse currency movements of 1%, Bekaert said.
Bekaert said it recorded a strong performance in advanced wire products, its largest division, with sales of Euro 1.242 billion, but saw a definite slowing of demand in various markets in Europe and North America. Only in Asia and in China in particular, did Bekaert realize accelerated growth in advanced wire products, the group said. Bekaert said sales in advanced materials rose sharply, up 14%, while sales growth in its advanced coatings division remained limited, with a 2% rise.
The opening of its new branch in China will strengthen Bekaert's position in advanced materials and coatings in the Asian market, the group said. Bekaert also said that 'while sales will continue to grow in the fourth quarter, Bekaert expects the weakening of the European and North American markets to continue.
Millennium Steel to supply blanks to Toyota plant
Millennium Steel of Texas and subsidiary Green Metals will handle, respectively, the steel that goes into the plant and the leftover steel that comes out of the plant.
Millennium also has the steel contract for Toyota Motor Manufacturing Indiana but Millennium Steel of Texas will be a bit different from the facility in Indiana. "We'll be able to do the blanking for them," said Assistant General Manager Mr David Douglas.
Blanks are pieces of metal that are cut to make different pieces of the auto parts The blanks then go into a giant stamping machine that cuts out pieces and shapes them to make things such as doors, hoods, fenders and truck beds. In San Antonio, Millennium will have the equipment to cut the blanks. So instead of sending rolls of steel into the plant, it can send the blanks so Toyota won't have to cut them.
Millennium will have to keep huge inventories and install processing equipments. "We're going to be receiving the equipment in the middle of December to start installation," Mr David Douglas said.
Edgen Corporation announces Q3 results
Edgen Corporation has announced its Third Quarter 2005 financial results. For the three months ended September 30, 2005, sales were $75.7 million as compared to sales for the three months ended June 30, 2005 of $74.4 million, and sales of $53.1 million for the three months ended September 30, 2004.
Income from operations was $5.8 million for the Third Quarter 2005 as compared to income from operations for the Second Quarter 2005 of $7.9 million. Income from operations for the Third Quarter 2004 was $6.0 million.
Sales order backlog decreased from $41.4 million at June 30, 2005 to $26.0 million as of September 30, 2005 due to several large project order shipments in the Third Quarter 2005 and the impact of Hurricanes Katrina and Rita on sales orders from customers in the gulf coast area.
"In the Third Quarter 2005, we saw a second consecutive quarter of record sales as a result of continued worldwide demand for our products and from strong pricing fundamentals for both our alloy and carbon products. We also saw gross profit margins on our carbon products contract slightly as a result of increased inventory costs and changes in our carbon product sales mix. These changes in our business reflect our focused business development efforts as we continue to target new customers and penetrate both new and existing markets," stated CEO and President, Mr Dan J. O'Leary
Edgen Corporation is a leading global distributor of specialty steel pipe, fittings and flanges for use in niche applications, primarily in the oil and gas, processing and power generation industries. The products Edgen distributes are highly specialized and are used in environments that require high performance characteristics, such as the ability to withstand highly corrosive or abrasive materials, extremely high or low temperatures, or high-pressure. These products are principally used in maintenance and repair projects as well as expansions of infrastructure and development projects. Edgen operates in 17 locations, including 15 in the United States, and two in Canada. Edgen also conducts European operations through an exclusive full-time sales agent in Scotland.
Auto die chroming plant opens in Durban
Die chroming supplier to Toyota Motors South Africa, Brooklyn Manufacturing has invested R18-million in a new plant, which opens today, that aims to bring a one of a kind technology in die chroming to the South African motor industry. The dies are part of the production technology that is used for the shaping of the steel sheets into car parts.
The investment comes in the wake of the announcement by Toyota SA Motors and the Kwazulu Natal Department of Finance and Economic Development of the planned growth plans that will see the development of Durban as the hub of motor manufacturing and component supply.
A tri-part technical agreement between Brooklyn, Toyota and Chuinichi Craft was signed in earlier this year. Chunichi chromes most of the stamping dies for Toyota internationally.
Mr Pinchuk lobbying for Ukraine in EU
Mr Viktor Pinchuk, Ukrainian steel magnet, is reported to have come European commission's Berlaymont headquarters in Brussels to plead his country's case for a seat at Europe's top table as a part of a delegation from the pan European Yes group, which wants to set in motion eventual EU membership for the land once known as the breadbasket of the Soviet Union.
Yalta European Strategy (Yes) group is named after the Black Sea resort where the iron curtain was formally laid in place after the Second World War
The sight of Mr Pinchuk in Brussels may come as a surprise to those in Ukraine who remember him as the son in law of Mr Leonid Kuchma, the former president who tried to thwart democracy last year in an attempt to please Russia.
Bayou Steel extends credit line
Bayou Steel Corporation is amending and restating its line of credit from $45 million to $75 million. The line will also provide lower borrowing rates, higher advance rates and a nearly four-year extension of the current arrangement. The company expects to complete the upsizing of its line of credit by the end of November 2005.
The company has discontinued its efforts to secure a $50 million term loan as announced in July 2005. The Board of Directors has indefinitely deferred consideration of a special dividend.
Bayou Steel manufactures light structural and merchant bar products in LaPlace, Louisiana and Harriman, Tennessee. The company also operates three stocking locations along the inland waterway system near Pittsburgh, Chicago, and Tulsa
