February, 15 2006
Tin plate association warns over use of inferior tin plates for food packaging
The Indian Tinplate Manufacturers Association ITMA and the North India Tin Fabricators Association NITFA have expressed concern over the use of imported second grade tin plates by a large number of edible oil and food processing companies in north and have called for strict adherence to the Bureau of Indian Standard BIS specifications, and implementation of the Prevention of Food Adulteration Act PFA provisions to safeguard the health of people.
The core problem lies with the low quality of second grade and misprinted tinplates which sellers from the UK, US, Brazil, France, and Germany export to India at throwaway prices. Indian buyers use them by keeping the printed side inside, and the shining side outside. The non-edible color used in printing comes in contact with the cooked material. These non-edible colors, if consumed, can even cause cancer.
Mittal Steel Arcelor issue not to affect India's relation with Luxembourg
Indian government indicated that the Mittal Steel issue would not affect India's relation with these countries. "India's foreign policy is that of the country and is not linked to any one incident," Minister of State for External Affairs Mr Anand Sharma told reporters amid reports that the government was contemplating backing off on its plans to sign a Double Taxation Avoidance Agreement with Luxembourg in retaliation of the treatment meted out to Mittal.
Mr Sharma said any policy of the country has to be "comprehensive". "India takes a view in larger global context. India has been taking independent policy decisions for which India is respected globally," he said. The minister said India raises its voice "whenever there is any instance of injustice and institutionalized discrimination against any section of people anywhere in the world."
Luxembourg, too, said that Mittal is not a bilateral issue' between its government and India and negotiations on the Double Taxation Avoidance Agreement between India and Luxembourg would continue until the Indian government officially called it off.
CIL request for duty reduction on import of mining equipments
Coal India Limited, which has lined up major expansion plans to meet the anticipated increase in demand for coal, has requested the government to remove import duty on mining equipment that needs to be imported for new and expansion projects. It is reported that officials at CIL have recently made a representation to the government on the subject.
Basic duty on imported equipment is 5%. This, along with a 16.32% countervailing duty and a 2% education cess on the import duty, results in a total impact of 22.57% on such equipment, said a CIL official. Removal of the basic duty will also nullify the effects of the countervailing duty and the 2% cess, thus providing some relief to the company.
Multipurpose 90,000DWT berth at Mangalore port
The New Mangalore Port will soon have a deep draft multipurpose berth at the port. The new berth No 14 can cater to 90,000 DWT vessels, which is almost three times the parcel size of ships handled at the six general cargo berths of the port. The new multipurpose berth will cater to the growing general cargo traffic at the port. The present general cargo berths at the port vary from 9.75 meters to 10.5 meters. The new berth will be larger and have a draft of 14 meters.
The general cargo handling capacity of the port is 1.75 million tonne and the projected general cargo traffic in 2006 is 3.73 million tonne, which is about 2 million tonne more than the present capacity. The new berth will fulfill this demand and handle bulk cargo including iron ore, coal and coke.
Low off take from power plants results in stock accrual at CIL
It is reported in a newspaper that CIL CMD Mr Shashi Kuma said that coal stocks are at 22.6 million tonnes level as against 16.5 million tonnes in the same period last year and may exceed 26 million tonnes at the financial year end. It is learnt that five of CILs seven coal producing subsidiaries are carrying inventory that might be the highest in a decade.
It is learnt that subsidiaries facing a serious problem in this respect include Eastern Coalfields, Mahanadi Coalfields, South Eastern Coalfields, Central Coalfields and to a lesser extent Bharat Coking Coal
The power sector had wanted CIL to produce about 351 million tonnes in 2005-06 to meet its demand. CIL upped its internal targets accordingly, but said that it would be able to produce only about 343 million tonnes since it had constraints in achieving a quantum jump. The 2005-06 target will be met but now there is the problem of finding takers.
Analysts, however, see this phenomenon of off take trailing production as a classic case of lopsided planning.
The rising stocks, sources said, needed to be viewed in the backdrop of the power sector's persistent cry over coal shortage. The excess coal is now being pushed to other sectors, especially cement.
BHP Billiton H1 profit jumps 48% to $4.36 billions
World number one miner BHP Billiton Ltd reported a 48% jump in first half net profit on strong demand for commodities, and said it would return $2 billion to shareholders, pushing its share price up 3%. BHP Billiton's July-December profit rise highlighted hefty global sales of iron ore, coal, industrial metals and oil and gas, boosted by strong demand from China and positions the company for annual profits of more than $9 billion.
Net profit for July-December rose to $4.36 billion from $2.95 billion a year earlier. Top contributors to earnings before interest and tax of $6.67 billion were iron ore, coking coal and copper, followed by petroleum and stainless steel materials.
BHP Billiton's plan to return $2 billion to shareholders within 18 months comes despite rising capital expenditure and last year's $7 billion purchase of WMC Resources. BHP said it planned a A$1.5 billion ($1.1 billion) off-market buyback of its Australian-listed shares, with the balance of the $2 billion program made of up on-market purchases in its UK-listed stock.
BHP Billiton CEO Mr Chip Goodyear told a media briefing that he expected industry supply constraints to keep commodity prices high in 2006. Mr Goodyear said that in the iron ore market, the spot price to China was above the contract price, pointing to strong demand. "China accounts for 16% of our sales and we continue to see good demand for iron ore," he said.
BHP Billiton Chairman Don Argus said confidence in the company's outlook and its ability to generate strong cash flows had underpinned the decision to make a sizeable return.
MEPS forecasts 47 million tonnes increase in global crude steel output in 2006
MEPS forecasts global crude steel production climbing to 1175 million tonnes during 2006, more than 4% up on 2005. . The 2006 gain in production will be much lower than the figures recorded in recent years. The majority of the gain in steel manufacturing will come, once again, from producers on the Asian continent. Chinese steel mills are expected to contribute more than 80% of the growth. Oversupply will be a feature of the market for, at least, the first half of this year.
MEPS envisage only modest increases in steel output from the industrialized nations. MEPS believe that curbs in steel making will continue in the EU, North America and Japan. Furthermore, we expect the Asian mills, particularly those in China and India, to slow their rate of expansion to nearer 10%.
A substantial increase in the volume of steel trade is anticipated. Excess supply in many Asian countries is likely to be exported to the industrialized nations in Europe and North America.
| MEPS - Global Crude Steel Production Estimate ('000 tonnes) | ||
| Region | 2005 | 2006 (e) |
| EU 25 | 186150 | 186950 |
| Other Europe | 31900 | 32500 |
| Former USSR | 112900 | 114350 |
| NAFTA | 127000 | 127600 |
| South America | 45200 | 46300 |
| Africa | 17650 | 17700 |
| Middle East | 15200 | 16000 |
| China | 348200 | 389000 |
| Japan | 112600 | 112000 |
| Other Asia | 122500 | 123900 |
| Oceania | 8700 | 8700 |
| Total | 1128000 | 1175000 |
| Source: MEPS - World Steel Outlook | ||
Chinas steel prices recovering on exports
Chinese domestic steel prices have recovered following months of decline, helped by a pick up in exports that have trimmed the country's surplus in the metal at least for the time being. Customs data showed Chinese steel product exports were high in January and December at 1.81 million tonnes and 1.82 million respectively, heading towards highs of above two million tonnes between March and May last year.
Traders, industry officials and analysts said exports of steel products were likely to remain high during the first quarter, though that was unlikely to solve China's problem of huge over capacity in the sector. "Exports should remain reasonably strong," said an analyst, adding that monthly exports were to stay between 1.5 million tonnes and 2.5 million tonnes in the next few months. A senior official at a major shipping company agreed, saying many steel coil cargos had been fixed for export to the United States and Europe in February and March, despite some worries over possible anti-dumping charges in future.
China's excess steel capacity has squeezed margins for domestic producers, while sliding steel prices have plagued an industry already grappling with the rising cost of raw materials such as iron ore. Some are also worried that the temporary rebound in domestic steel product prices might undermine their bargaining power in iron ore negotiations this year, especially as it has already led to a rise in spot Indian ore prices after the Lunar New Year break.
Prices were also underpinned by traders' re stocking after the holidays early in February. They had cut their inventories over the past six months because of sharp price declines.
But trading volume had been small, they said, as many believed overproduction would put pressure on prices again. "People do not think the steel product prices will remain strong ... Nothing can be changed in oversupply in the near future," said an iron ore trader in Beijing. And the government would not like steel prices going up too quick. If that happens, how can you bargain for lower prices in iron ore?" the trader added. The iron ore market is also concerned.
Gloucester Coal settles coking coal price with Japanese mills at 17% reduction
Junior coal miner Gloucester Coal has reached coking coal price agreements with key Japanese customers, settling at a lower price than last year. Gloucester Coal has settled coking coal contract prices at around $83 per tonne for the 2006-07 Japanese financial years. Last year Gloucester settled at a record of over $100 per tonne, which was a $55 per tonne jump on the previous year. The company's high ash thermal coal remains predominantly contracted at just under $40 per tonne through to the end of June 2006.
Gloucester said the settlement was a midpoint between the benchmarks for hard coking and semi-soft coals. CEO Mr Gavin May said the contract prices reflected the company's sound relationship with its Japanese customers. "The coking coal price outcome reflects continued strong demand for Gloucester's low ash high fluidity coking coal as well as production reliability, and our long-term relationship with our Japanese customers," Mr May said.
Japanese steel mills, which use coal, have pushed prices lower this year following the massive price hikes of last year. However, major producers and often benchmark price setters Rio Tinto and Xstrata Coal are yet to settle their contracts.
EU to decide on Mittal Steel - Arcelor issue on commercial consideration only
Amid the raging controversy over Mittal Steel's takeover bid for rival Arcelor, the European Union today said it was against racial discrimination and the issue should be treated only on commercial considerations. "The E.U. is of a clear view that nationality in such cases is not relevant and it should be decided according to the laws in place and commercial merits," European Commission Director General - Trade, Mr David O'Sullivan said. "It is unfortunate that allegations of racial discrimination have crept in the issue," he added.
However, he made it clear the EU would be concerned if there were any violations of competition rules and the takeover created a monopoly kind of situation.
POSCO to take steps to be M&A hunter and not a prey
It is reported that company CEO Mr Lee Ku Taek said that POSCO needs to increase its value and sustain profits or risk joining Arcelor as the target of a takeover bid. `POSCO can't be an exception in being a takeover target. Therefore, we need to make a decision whether we are going to lead the changes or be a merger and acquisition target. Mr Lee said his company couldnt be the object of mergers and acquisitions in the global steel industry. "POSCO should rather play a leading role in mergers and acquisitions," he reportedly told his executives. Mr Lee asserted that POSCO should raise its corporate value to become an active player in the M&A war. "Raising profitability and competence is a basic," he said.
Mr Lee was briefing executives on a rash of mergers and acquisition attempts in the steel industry as producers seek to improve their bargaining power with customers and suppliers. "Chief executives of global steel makers agree that M&A movements will be accelerated and the consequent growth in size of steel makers would benefit the stability of the entire industry. " said Mr Lee. "Most chief executives knew about the possibility but didn't think Mittal Steel would make its move so fast. They had expected to see a steel maker with an annual production capacity of 100 million metric tons in the next 10 years, not in one or two years" said Mr Lee.
Nippon Steel to raise stake in Sanyo Special Steel
Nippon Steel Corp. will raise its equity stake in Sanyo Special Steel Co to some 15% from the present 11.2% by the end of June as part of their business and capital alliance to strengthen their respective competitiveness, the two firms said. The Japanese steel makers said they would step up cooperation in production, procurement of raw materials, distribution of products, and research and development.
The planned equity stake hike will enable Nippon Steel to add some of Sanyo Special Steel's earnings to its consolidated earnings through the equity method. Sanyo Special Steel has agreed to acquire the same number of Nippon Steel shares as that of Sanyo Special Steel shares held by Nippon Steel, they said.
Nippon Steel, the world's third-largest steel maker, has supported Sanyo Special Steel, based in Himeji, Hyogo Prefecture, since the special steel producer plunged into financial crisis in 1965. Sanyo Special Steel, capitalized at 20.1 billion yen, now has a strong presence in the market for steel for making bearings and pipes.
China Steel Corp to review prices for 2nd quarter
Kaohsiung based Taiwan's largest steel maker China Steel Corp, said product prices have bottomed after falling about 20% in the last two quarters as demand increases. China Steel cut prices for the fourth and first quarters.
"The worst is over," Mr Chiang Yao-chung, China Steel chairman, said at a lunch with reporters in Taipei yesterday. "We're now reviewing market supply and demand before setting prices for the second quarter late this month," he said. China Steel's customers have been receiving increasing orders from abroad since the Lunar New Year holiday ended earlier this month, Mr Chung Lo-min, China Steel's vice president, said at the lunch meeting.
PSMC Privatization President directs for expediting sell off
It is reported that Pakistans President General Pervez Musharraf has asked the Privatization Commission to expedite the disinvestments of Pakistan Steel Mills Corporation as the issue is causing unrest among potential bidders and employees of the organization. Pakistani daily Dawn learnt that the president directed the officials concerned to complete the transaction as was given to understand to the five pre qualified bidders and the public at large. The president believed that the delay was sending wrong signals to potential local and foreign investors
Privatization Commission was unable to privatize the mills even according to the new schedule of February 19 because of various reasons. The privatization process could not be completed by Dec 31, 2005 or on January 31 despite assurances given by the Privatization Commission. Growing differences between PC officials and employees and officers unions, who were opposing the deal and seeking a better package are believed to be the reasons for the delay. The issue was further complicated after the Minister for Privatization and investment Dr Hafeez Sheikh decided to give up his cabinet post and get a senior position in the World Bank.
Arcelor-OYAK deal awaits approval from Turkish Competition Council
The final approval of the biggest privatizations in Turkey is pending at the Competition Board. The board earlier announced the approval of Erdemirs sale to OYAK. However, OYAK initiated negotiations with Arcelor and this situation's possibility to create unjust competition was debated due to Arcelor's other investments in Turkey.
OYAK had received approval from the Privatization Administration to transfer 41 % of Ataer Holding shares to Arcelor. The Competition Board, however, will review this permission because the purchasing company will change its structure. If 41% of Ataer is transferred to Arcelor, the company will have 21.47% indirect share. Arcelor will have 26.54% of direct and indirect shares together with its purchases from Erdemir proceeding in the Istanbul Stock Exchange.
Borcelik, with one million ton flat production manufacturing capacity; has 40% Arcelor, 11.8% International Finance Corporation and 8.72% ERDEMIR shares. If Arcelor associates with ERDEMIR, its shares in Borcelik will increase. OYAK's share, on the other hand, will become 53.36% with 3.17% to come from the Development Bank and 3.07% share in the company billfold.
The European Union commission has reviewed the transaction and approved it recently.
Kazakhstans crude steel output down by 22.3% in January 2006
Kazakhstan reduced crude steel production 22.3% YOY in January to 283.494 tons as per the national statistics agency. Output of flat rolled steel products fell 31.5% to 216,661 tons, including 11,143 tons of tinplate down by 43.4%, and 44,332 tons of galvanized steel down by 12.2%. Flat products exports, including tin-plate, fell 13.9% to $901.4 million in 2005.
Ferroalloy production, though, grew 6% in January to 138,225 tons. The agency also said that ferroalloy exports rose 5.6% to 1.172 million tons in 2005 compared with 2004. Ferroalloy exports in value rose 16.8% to $966.9 million.
Hutchison to buy 49.9% stake in New Zealands Lyttelton coal port
Hutchison Whampoa Ltd, the world's largest port manager, said it will buy a stake in New Zealand's biggest coal shipment facility, making its first investment in the southern hemisphere to tap growing exports to China. Hutchison's closely held unit Hutchison Port Holdings Ltd will pay $72 million for 49.9% of Lyttelton Port Co from Christchurch City Holdings Ltd. Hutchison's Lyttelton Port investment depends on its 69% owner Christchurch City Holdings getting approval to buy the remaining stake before selling 49.9% to the Hong Kong company. Hutchison and Lyttelton Port will then form a venture to manage the harbor. Hutchison Port will jointly develop and operate Lyttelton Port
The stake gives Hutchison access to a harbor that includes bulk loading facilities and two container cranes. Lyttelton Port, 12 kilometers south east of Christchurch on New Zealand's South Island, handles about two million tonnes of the country's coal exports every year.
Hutchison is also building a terminal in Dalian port in China to handle iron ore, the company's first dry bulk facility in China.
Hong Kong based Hutchison, controlled by Asia's richest businessman Mr Li Ka Shing,
which moved 47.8 million cargo boxes at 41 container ports in 20 countries in 2004, is branching out to iron, coal and other dry bulk to meet China's industrial needs.
Wesfarmers & G&W sells rail JV ARG to Babcock & Brown & Queensland Rail
Australian Wesfarmers Ltd and US based Genesee & Wyoming G&W have agreed to sell their Australian Railroad Group ARG JV to investment firm Babcock & Brown Ltd and Queensland Rail, for A$1.3 billion. Wesfarmers said that under the deal Babcock & Brown will acquire and operate ARG's track and associated infrastructure in Western Australia and Queensland Rail, owned by the state government of Queensland, will acquire the rail haulage side of the venture and associated infrastructure. Assets include freight operations in Western Australia and contracted services operating in the states of New South Wales and Victoria.
ARG carries about 50 million tonnes of freight a year and has 200 locomotives, 4,000 wagons and more than 10,000 km of track. It is Australia's largest transporter of grain, handling more than 10 million tons a year and also transports iron ore, alumina, bauxite, gypsum, coal, nickel and mineral sands.
Pakistan exempts 6% withholding tax on ship breaking
Pakistans Central Board of Revenue has announced exemption from 6% withholding tax on the import of ships and floating crafts, tugs, dredgers, survey vessels and other specialized crafts registered in Pakistan. In this regard, the CBR has made amendments, through SRO 93 (I)/2006 issued on Monday, to the Second Schedule to the Income Tax Ordinance of 2001.
The Pakistan Ship Breakers Association had informed the CBR that there was a marginal difference in the prices of ships imported for scraping and imported billet due to which ship breaking industry was suffering badly and the relief of fixation of deemed value at $300 PMT was not making any improvement. The industry requested that ship breakers and steel melters should have a level playing field and for this purpose, the industry proposed to further revise downward the deemed value of ships for sales tax assessment. Moreover, the domestic sales tax payment of the ship-breaking industry may also be brought at par with the melters by fixation of value addition. They had also demanded exemption or reduction in the rate of withholding tax charged at the import of ships and other floating crafts to enable the industry survive.
Australia's Macmahon preferred contractor for BHP Billiton iron ore mine
Mining services contractor Macmahon Holdings Ltd said it has been notified it is the preferred proponent for a mining and processing contract at BHP Billiton's Jimblebar iron ore mine in Western Australia's Pilbara iron ore region. It said the proposed open cut mining contract is for two years and follows Macmahon being awarded last December the contract for BHP Billiton's new Orebody 18 mine, also the Pilbara.
Jimblebar has average annual production of seven million tons of iron ore a year.
Crisis brews in Ajaokuta Steel over another retrenchment exercise
It is reported that crisis is brewing in the Nigerian Ajaokuta Steel Company over plans by the management to embark on another retrenchment exercise few months after over 1,500 workers out. Nigerian steel workers unions Iron and Steel Senior Staff Association of Nigeria ISSSAN and Steel and Engineering Workers Union of Nigeria SEWUN have petitioned the Power and Steel Minister urging him to intervene to avert the impending crisis. The two unions in the sector said they are very concerned about the development and asked the new owners of the company to come out clearly if they are not interested in completing the complex.
In a petition signed by the General Secretaries of ISSSAN and SEWUN, Comrade Didi Adodo and Kazim Kadiri respectively, the workers stressed that they would not stop the management from any rational retrenchment exercise if the management so wish, but vowed that no worker would accept any retrenchment letter without disengagement cheque.
Venezuelan Ferromineras Iron ore output to increase by 6%
Venezuelas state-run iron ore company Ferrominera del Orinoco said that its output will probably rise 6% this year as it strives to meet soaring domestic demand. Ferrominera expects to produce 23.5 million tons of iron ore in 2006, up from 22.1 million tons in 2005, a local newspaper said, citing company President Mr Car Bertani. More than 15 million tons are earmarked for domestic use, the newspaper said.
Mr Bertani said the company is also spending $450 million to build a concentrated ore plant, which mixes low and high grade iron ore and can extend the life of Venezuelas deposits by 40 years. The plant will open in 2008.
Venezuela is the worlds eighth-largest iron ore producer and has an estimated 2.8 billion tons of high grade iron ore reserves in its southeastern region.
Australian Coal Association denies charges levied in ABCs TV program
Australian coal industry denied obtaining undue access to federal government workings on the issue of climate change. The Australian Coal Association ACA also attacked the ABC's Four Corners television program for alleging lobbyists had written cabinet briefing papers on climate policy, accusing the TV program of shoddy and biased journalism.
The program included a claim by former Liberal staffer and industry lobbyist Dr Guy Pearse that he had conducted extensive interviews with coal industry lobbyists, some of whom called themselves the greenhouse mafia. He said several lobbyists had admitted writing cabinet briefings, which are usually sourced in government departments. The program also aired allegations by three former senior CSIRO scientists they had been silenced on climate change issues that conflicted with government policy.
But the denials did not stop opposition parties attacking the Government over the claims.
"A dangerous climate of fear clouds Howard Government climate policy," opposition environment spokesman Anthony Albanese told Parliament. "The victims of that climate of fear have been some of Australia's top scientists in the CSIRO. "Just like the wheat-for-weapons scandal, this is a Government, which governs in its own political interests, not in the national interest. "Last night's Four Corners program raised serious allegations that senior CSIRO scientists are being gagged on climate change issues when it does not suit the Howard Government's political message."
Australian Greens senator Christine Milne said the program's allegations backed up her own observations of coal lobbyists working closely with government delegations at international climate meetings. "Every time I ask scientists, particularly people involved in CSIRO, or in the research centers around the country ... it's clear they're afraid to speak out publicly because of the ramifications of government policy in terms of whether their research will continue to be funded or whether their work will be published," she said. Senator Milne said the allegations deserved investigation in a broad inquiry.
Pakistans High Court adjourns appeal against auction of Ittefaq Groups units
The Lahore High Court adjourned an intra-court appeal challenging the auction of Ittefaq Group of Industries four steel units, owned by former prime minister Mian Nawaz Sharifs family, till March 13 because counsel for the petitioner was unavailable.
The company bench of the LHC had earlier accepted a petition by the National Bank of Pakistan and other local banks seeking the sale of Ittefaq Foundries and Brothers Steel at Kot Lakhpat, Ittefaq Brothers at Shahdara and Ilyas Enterprises on Band Road, Lahore. The Nawaz Sharif family had surrendered these units against its bank liabilities to adjust loans acquired from eight banks and other financial institutions. The total liability of the Sharif family was evaluated at Rs 2.26 billion and the National Bank of Pakistan had provided more than 50% of the total loans.
Mian Meraj Din family and Colony Group of Industries challenged the decision through an intra-court appeal that said that there was no need to auction these units but to revive them through an arrangement under the Companies Ordinance.
Brazil Indians again block CVRD iron ore railway
Brazilian Indians on Tuesday blocked CVRDs railways in north Brazil for the second time in a week, demanding better public health care. CVRD, said in a statement that Indians led by the Guajajara tribe in the northeastern state of Maranhao blocked the Carajas line at kilometer 289 near the district of Alto Alegre do Pindare.
CVRD said a judge in Maranhao ordered the Indians Tuesday night to immediately clear the railway line. He said although everyone had the right to health care treatment, third parties also had the right to maintain freight and passenger services. The mining company said the Indian action was aimed at the National Health Foundation, or FUNASA, which provides medical services for Indians.
Last week, Indians blocked the same railway line, which, carries iron ore and other minerals from CVRD's huge mines in Carajas in northern Brazil to a port at Sao Luis in Maranhao state, and held four CVRD employees hostage for two days.
In November, Indians invaded a town near Carajas threatening to halt production, and in early December blocked an iron ore export railway line in central Minas Gerais state operated by CVRD.
Mittal Steel Zenica targets 630,000 tonnes output in 2006
Bosnia's largest steel maker, Mittal Steel Zenica, aims to nearly double output this year to 630,000 tonnes from 340,000 in 2005, as per a report in a local daily. In 2004 output of Mittal Steel Zenica was about 110,000 tonnes, development director Mr Aziz Mujezinovic told media. He said the company had initially planned to produce 800,000 tonnes in 2005 but had to revise its plans as the trial of a new 100-tonne electric arc furnace installed that year took longer than expected. Its annual production capacity is 800,000 tonnes, he added.
Mr Mujezinovic also said that Mittal Steel would invest about Euros 100 million in 2006 to restart integral production which will enable total output of about 2 million tonnes of steel a year. That would expand the product portfolio with slabs and new long products and place the company among mid-sized steel makers, he said.
The former socialist era giant, which collapsed during the Bosnian 1992-95 war, used to have an output of 1.8 million tonnes a year. Mittal Steel raised its stake in the Zenica plant to 92% from 51% for $98 million last month. In 2004 Mittal Steel Company also acquired a majority stake in the Ljubija ore mines in northwestern Bosnia, which supply the Zenica plant with iron ore.
Panzhihua Steel Q4 profit falls 92%
Panzhihua New Steel & Vanadium Co, the world's third-biggest producer of vanadium steel used in high-speed railroads, posted a 92% plunge in fourth quarter profit because of falling steel prices. Net income fell to 14.3 million yuan ($1.78 million) in the three months ended December 31, from 174 million yuan ($22 million) a year earlier. Sales fell 25 per cent to 3.4 billion yuan ($420 million).
Full-year net income fell to 811.3 million yuan ($100 million) from 824.4 million yuan ($101.78 million), the company said in a statement to the Shenzhen exchange. Sales rose to 15.2 billion yuan ($1.88 billion) from 13.4 billion yuan ($1.65 billion).
Panzhihua produced 632,700 tons of steel rail and 2.56 million tons of hot-rolled coil last year, the company said. Panzhihua signed an agreement to ship 6,000 tons of steel rail to the US in April to counter falling demand in China, the company said.
"The company had a tough time with rising raw material costs and falling prices last year," said Zhu Libin, a steel analyst at Shanghai Shenyin Wanguo Research and Consulting Co.
Paulson proposes Mr Hritz for director post in Algoma Steel
Mr John Hritz, former AK Steel Corp president, has been nominated to be a director of a Canadian Algoma Steel Inc by New York hedge fund Paulson & Co Inc. Paulson has proposed that Mr Hritz become one of five new directors for Algoma Steel. Paulson is pushing Algoma to adopt new debt to pay a dividend of $420 million to shareholders.
AKs board sought and got the resignations of Mr Hritz and former CEO Mr Richard Wardrop in September 2003. Since then, Mr Hritz has pursued other business interests and announced a candidacy for Ohio treasurer.
Ms Brenda Stenta, a spokeswoman for Algoma, said her company has declined the proposal, carefully steering clear of commenting on Mr Hritz.
