February, 24 2006
Indian galvanizers hike prices
Anticipating huge demand from the construction industry, some of Indian galvanizers have raised their basic selling prices with effect from February 22, retrospectively.
It is reported that Uttam Galva Steel has raised the selling prices of its products by Rs 2,500 a tonne across all varieties. Unconfirmed sources said JSW Steel has also raised the prices of its products between Rs 250 and Rs 1,750 a tonne depending upon quality. Ispat Industries too has decided to increase its prices in the range of Rs 1,500-1,800 a tonne across all categories effective from March 1. Observers point out that other big steel makers like Tata Steel and SAIL are also likely to increase their steel prices very soon.
Galvanized steel producers largely attribute the current price hike to squeezing of their margins owing to a spurt in production costs. Costs of raw materials have gone up substantially. Sharp rises in fuel and zinc prices, coupled with rising freight rates due to the recent Supreme Court directive on loading not more than 9 tonne on a truck, were squeezing our margins. So, we have decided to hike prices, justifiably, said Mr Ankit Miglani, director, Uttam Galva Steel. "People have been worried about where steel has been over the past two quarters. Inventories have been dwindling and all of a sudden people are realizing that they don't have enough steel," added Mr Ankit Miglani.
India produces about 4 million tonne and consumes about 1.5 million tonne of galvanized steel.
Indian coal demand estimated at 445 million levels in 2006
Minister of Coal Mr Shibu Soren informed the Rajya Sabha that Planning Commission has estimated coal demand of 445.65 million tones during the year 2005-06. This demand is planned to be met from domestic supply of 406.48 million tones. With proposed imports of 23.89 million tonnes of coking coal for steel sector and 13.45 million tonnes of non-coking coal for power utilities, there will be small gap in coal availability which will be met from enhanced production from indigenous sources.
Government has drawn an emergency coal production plan in the subsidiary companies of Coal India Limited. 16 open cast projects/mines have been identified where production from the existing mines/projects can be enhanced to a higher level, yielding additional 71.13 million tones of coal production. The built up of incremental production will be 8 million tones for the first year and progressively reaching to 71.13 million tones in eight years.
Kanishk Steel upgrades testing facilities
Chennai based Kanishk Steel Industries, manufacturers of TMT bars and structural, has upgraded its testing equipment with the stationary metal analyzer, SpectroMaxx Spectrometer from Germany, at an investment of Rs 26 lakh. The stationery metal analyzer will be used in its TMT and structural production units at Gummidipoondi and the raw material production facility situated in Mayiladuthurai.
SpectroMaxx Spectrometer is a digitalized plasma generator that powers metal analysis to new levels of performance and employs the latest fully digitalized plasma generator source with current and voltage control, ensuring optimizing sparking parameters and high precision.
SpectroMaxx, equipped with three special features for identification of bad samples having cracks or blowholes on the surfaces, can identify, indicate and reject the samples with bad surfaces, thereby making analyses more precise and correct. The very special patented ICAL software eliminates the need for expensive re-calibration samples.
Pricing and returns unclear in NTPCs coal mining operations
NTPC Ltd which has got eight coal blocks with total reserves of over five billion tonnes is not clear on a host of crucial issues including coal pricing mechanism and what returns the company may get from its mining operations. NTPC was allocated the Pakri Badarwih coal block in 2005 and another seven blocks in January this year.
NTPC has already started working on its first block Pakri Badarwih, which has reserves of 1400 million tonnes, and plans to start production by the end of 2007, followed by other seven blocks between 11th and 12th plans.
Further, the process for fixing coal prices or whether a transfer pricing mechanism would be followed has also not been decided yet. The issue assumes importance given the fact that there is no coal or energy regulator to fix coal prices even though there is a power regulator to decide on electricity tariffs. Both the Power Ministry and CERC have pitched in for a coal regulator in the past to keep fuel prices under check.
Central Electricity Regulatory Commission Chairman Mr AK Basu said the returns would be decided when the company approaches the regulator for tariff fixation but it may not be 14% as was being claimed.
Baosteel raises Q2 prices
Top Chinese steelmaker & the price trend setter in SEA Baosteel announced price hike for Q2, 2006 yesterday. The prices of most its steel items have posting substantive upswings compared with Q1, 2006 prices. The details are as under
1. HR - up by RMB 350-400 PMT ($43-$50)
2. Pickled HR - up RMB 600 PMT ($75)
3. CR - up by RMB 600-700 PMT ($75-$87)
4. CR Full Hard - up by RMB 300-400 PMT ($37-$50)
5. HDG - up by RMB 200-500 PMT ($25-$62)
6. Galvalume - up by RMB 500-700 PMT ($62-$87)
7. Electro Galvanized - up by RMB 300 PMT ($37)
8. Color coated - up by RMB 150-400 PMT ($19-$50)
9. Plate - up by RMB 100-300 PMT over Mar prices ($12 -$37)
It is reported that all prices stated above will come into effect as of the date of issuance ie February 23, 2006.
Mr Mittal to present Arcelor plan to French government
Mittal Steel will present the key facts of its takeover bid for European steelmaker Arcelor to the French government on Monday, a Mittal Steel spokeswoman said.
"We say again that we are open to talks with the Arcelor management," the spokeswoman told Reuters on Wednesday. She added that Mr LN Mittal wanted to talk personally with French Finance Minister Mr Thierry Breton about the offer on Monday. Mr Mittal will present further details of the proposed acquisition to Mr Thierry Breton during their meeting.
Mr Breton said that Mr Mittal would present him with a "business plan" on what would happen if the transaction went ahead, the daily reported. "From the first day we have demanded to see an industrial project and I have good news for you... I have been informed this morning that we are going to get this industrial project early next week," he said.
Arcelor inaugurates Carinox
Mr Guy Doll CEO of Arcelor and Jean-Yves Gilet in charge of Arcelor Stainless worldwide, have inaugurated, on 23 February 2006, the new Carinox steel plant at Charleroi, Belgium. This facility has a yearly production capacity of 1 million tonnes of stainless steel. The inauguration ceremony took place in presence of 400 persons including the representatives of the Wallonian government, Arcelor's associates and clients from the operational units of UGINE & ALZ.
Located upstream of Arcelor's Carlam hot rolling mill, the Carinox steel plant, which has a capacity of 1 million tonnes, forms, together with the Genk steel plant, an integrated upstream production complex at the best level of competitiveness in Europe. Carinox replaces two smaller, non-integrated steel plants. Carinox steel plant was built in only 26 months and started production on 28 September 2005. Following the ramp-up phase, the steel plant should reach full capacity at the beginning of 2007
"Carinox, one of the most important investments of Arcelor, is the result of a long-term anticipating and deploying vision focusing on the profitability of the relevant activity. Carinox is a small step for Arcelor, but a huge step for Arcelor's stainless business" stated Mr Guy Doll
UGINE & ALZ is the European subsidiary of Arcelor's Stainless Steel Business Unit specialized in flat stainless steel products with a turnover of 2.66 billion euros in 2005, a production volume of 1.21 million tonnes. U&A operates 4 production sites in Europe at Isbergues (France), Gueugnon (France), Genk (Belgium) and Carinox (Belgium). For UGINE & ALZ, the Carinox steel plant is in line with its new organization which focuses on markets and customer service. It constitutes the cornerstone for the strengthening of the culture of excellence of Arcelor's flat stainless steel business in Europe.
BHPB says that Asian iron ore price talks continuing
BHP Billiton Ltd said Thursday that the iron ore market remains tight, with spot prices continuing to exceed long-term contract prices. Mr Graeme Hunt, president of BHP Iron Ore, said talks with Asian customers to set annual contract prices are ongoing.
"There is clearly a spot price premium, well over the benchmark delivered price," Mr Hunt told reporters on the sidelines of an iron ore conference in Perth. "The market is tight," he said. Hunt said there will be a "series of meeting over the next few weeks" between BHP and Asian steel mills. "Our people will go back and have meetings in China and Japan soon."
Mr Hunt declined to comment on speculation that BHP and Chinese steel mills, including Baosteel, are still a long way apart on their price expectations for the coming year.
Steel prices hinging on iron ore contracts-Mr Markus Moll
According to senior market analyst Markus Moll, there is uncertainty as to which direction the steel prices are heading this year, as everything depends on iron-ore contracts. He further said that everyone is watching China in an interview with CNBC-TV18.
Mr Moll feels that the low stock levels, at least in Europe and generally bullish macro economic picture is also pointing in the direction that steel consumption in the traditional countries, that is in the industrialized European countries, will also grow in 2006. On account of this there is strong demand. Further, the automotive industry is not really booming but it is doing pretty well. Hence, there is no doubt that the consumption of steel in Europe will have a positive growth this year.
Mr Moll also said that if one looks at the big picture, then we are probably having even an over supply situation. The capacity expansion in China and other parts of the world were enormous. We have more supply than demand. But there are markets where the supply situation is limited right now.
Arcelor receives Best of European Business award
Arcelor has received an inaugural "Best of European Business" award which singles it out as one of the nine most competitive companies doing business in Europe. The award was handed over to Mr Guy Doll Arcelor's CEO, at a ceremony organized in Brussels on February 22 by Roland Berger Strategy Consultants and the Financial Times, the initiators of this competition. EU Commission Vice-President Gnter Verheugen and EU Commissioner Viviane Reding were present at the ceremony.
Arcelor was singled out as "Best of Industry" in the "Industrials" category by a jury comprising several prestigious CEO's of European companies. The jury was impressed by Arcelor's commercial policy and by its innovative steel solutions, which will both be pillars of the planned expansion. Arcelor was recognized for its strong sales growth, its high EBIT margin and very high economic value added
Mr Guy Dollsaid "I am very pleased to receive this prize in the name of the 96,000 associates of Arcelor who worked hard to make Arcelor a reference of the world steel industry. This award acknowledges four years of continuous efforts and intense teamwork aimed at developing performance and value creation. It is indeed a very positive message for our shareholders who place their trust in this company and its growth prospects".
The aim of this competition is to honor the corporations found to be success stories which outperform their global rivals with strong leadership skills and their innovative capacities.
Orissa CM for political dialogue with tribal manch
Orissa government has agreed to hold dialogue with the Bisthapan Virodhi Jan Manch, spearheading the 53 day stir against tribal displacement in this developing steel hub in Jajpur district. The BVJM leaders, who held preliminary discussions with the Jajpur district administration yesterday, had put forward three demands saying their acceptance would pave the way for talks at the political level.
"Chief Minister's office has responded to the conditions put by BVJM yesterday itself. The government is ready for a political dialogue which was one of the main demands of the agitators," Jajpur District Collector told press.
The great steel rush in Orissa has come to a sudden halt. All the mega Greenfield steel projects, including TATA Steel and POSCO have hit the pause button, till such time the Orissa government finalizes a tribal rehabilitation policy.
US ITC revokes AD on beams from Japan & Korea
The US International Trade Commission determined that revoking the existing countervailing duty and antidumping duty orders on structural steel beams from Japan and Korea would not be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time. As a result of the Commission's negative determinations, the existing orders on imports of structural steel beams from Japan and Korea will be revoked.
ITC Chairman Mr Stephen Koplan, Vice Chairman Deanna Tanner Okun, and Commissioners Jennifer A. Hillman, Daniel R. Pearson, and Shara L. Aranoff found that revoking the existing orders would not be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time. Commissioner Charlotte R. Lane found that revoking the existing orders would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.
This action comes under the five-year sunset review process required by the Uruguay Round Agreements Act. The five-year sunset reviews concerning Structural Steel Beams from Japan and Korea were instituted on May 1, 2005.
A Call for consolidation in South East Asia- SEAISI
South East Asian Iron & Steel Institute has called for consolidation in the region, when steel giants are consolidating in both friendly and hostile means, there is no major sign of movements in South East Asia. The steel world is contemplating when Mittal Steel attempted to bid for Arcelor and the South East Asian steelmakers should do the contemplation more seriously. Where will the small South East Asian steelmakers be in the future full of super giants?
Steelmakers have long realized their vulnerability when dealing with iron miners like CVRD and BHP. They have a similar feeling when working under the strict requirements of the big auto companies. They have a weak bargaining power because they are relatively small. And the South East Asian steelmakers are among the smallest smalls.
It is almost a consensus that consolidation in steel business is good from a management perspective: companies consolidate in a hope to lower their overall cost structure, more sound capital investment, and ultimately better in serving customers. However, in South East Asia, other factors such as socio-politics may be detrimental to a takeover bid from an overseas company.
The industry leaders in the region are Lion of Malaysia, Krakatau Steel of Indonesia, and Sahaviriya of Thailand. The crude steel capacities of Lion and Krakatau are currently around 4 million and 3 million tons respectively while Sahaviiya is a hot rolled sheet producer who is still planning its steelmaking capabilities.
Arcelor to present a long term plan to investors
It is reported that Mt Guy Dolle CEO of Arcelor would present a long term plan for the steel company. "Our job is to show to all the shareholders that the value is better than that," Mr Dolle told reporters at the opening of a new stainless steel plant in southern Belgium.
A letter to be mailed to 50,000 retail investors apparently warns a Mittal Steel takeover will threaten "transparency and respect for the interests of individual shareholders." A stand-alone Arcelor has better prospects than a combination of "two profoundly different businesses," it adds.
Riva orders billet caster to Concast AG
Milan based Riva have awarded Concast of Switzerland, a contract for the supply of a three (four) - strand CONVEX billet caster for their Caronno Pertusella works. The billet caster has a radius of twelve meters with continuous unbending section. Commissioning of the new caster is scheduled for mid-June 2007.
The cast sizes are 200 and 260 mm (in the future 300 mm round). The steel grades processed will include carbon and alloyed steels for the production of forgings and automotive parts, boron steels, spring steels and free-cutting steels.
The new technological systems and equipment to be supplied of Concast CONVEX technology include CONVEX copper tubes, stopper control, electromagnetic final stirrer, hydraulically operated compact type oscillator and air-mist secondary cooling system. The billet caster will be equipped with a state-of-the-art Level 2 automation system both for actual plant operation as well as for the complete control of the casting process.
Concast AG forms part of the Metallurgical Plant and Rolling Mill Technology Business Area of the SMS group.
China Steel says foreign control is not a good idea
China Steel Corp, the biggest steelmaker in Taiwan, said foreign control of the company is not a good idea. The Japan Metal Daily reported yesterday that Mittal Steel Co. offered to buy the Kaohsiung based company earlier this month and the Taiwanese steelmaker turned the bid down.
"Some investment banks asked us what if Mittal Steel buys your shares," Mr Chung Lo-min, China Steel Executive Vice President, said by phone from Kaohsiung yesterday. "We don't think it's a good idea for a foreign company to control China Steel." Mr Chung, the China Steel executive vice president, said he wasn't sure if the investment banks approached the company on behalf of Mittal Steel.
Mittal Steel would have to buy China Steel shares in the open market" if they want to pursue the bid, Mr Cheng Yu-po, deputy director general of Taiwan's National Treasury said by phone from Taipei today. "We don't have any plan to sell our stake," he said. Taiwan's government owns 23% of the company. Taiwan has no law to stop a foreign company from bidding for China Steel, Mr Cheng added.
UKs E Wood to coat pipes for East West project
UKs E Wood Ltd, manufacturer of high performance pipe coatings beat two Chinese rivals on price to win the major contract with Baoji Steel, one of the largest pipe companies in China for supply of special coatings for the first phase of the East West gas pipeline project. E Wood also hopes to clinch the work for the second and third phases of the project, which will see 3,500 km of gas pipeline manufactured in China.
Mr Chris McDonnell MD told the local media "The Chinese were favorites to win the contract to supply the pipe for the East-West gas pipeline in India. Baoji Steel then put the coatings work out to tender. We put in our bid against competition from two rival Chinese companies. We won the contract on price, quality and service, which indicates our strength in the overseas market."
McDonnell was delighted that his company had fended off rivals despite being so far away from China. He said: "We all think about China in terms of low cost manufacturing and yet we got this deal because of the price we could offer even though we have to ship the products 10,000 miles to China."
E Wood, which has a turnover of about 25 million pounds, supplies its gas pipe coating to countries around the world. The product is sprayed on pipes to protect them during transport, storage and construction. The coating also improves the efficiency of gas traveling through the pipes.
Aztec Resources to restart Koolan Island project
It is reported that Aztec Resources Ltd will restart operations on Koolan Island after receiving approval from Environment minister Mark McGowan. Following the environmental approval and the agreement reached with the traditional owners, the Dambimangari People, Aztec is confident the necessary mining leases and initial works approvals will be granted by April 2006.
Aztec expects to commence development work on Koolan Island in April 2006, with the first shipment of iron ore taking place in December 2006.
Vietnam to reduce coal exports during 2006-2010
It is reported that Vietnams Ministry of Trade is currently compiling an export plan for 2006-2010, according to which, the volume of high intelligence-content exports will rise, while raw materials and minerals will decrease. Crude oil and coal exports will see a sharp decrease from 21% in 2006 to 9.6% in 2010.
Coal exports will see a gradual decrease as the Government of Vietnam plans to limit exporting natural resources. Coal exports will be capped at 11million tonnes during 2006-2007, and export volume will decrease to 10 million tonnes in 2008 and 9 million in 2009. In 2010, export volume will be just 8 million tonnes
5 killed in coal mine accident in Jilin province in northeast China
Five people were killed when the roof of coal mine collapsed suddenly in northeast China's Jilin Province, the provincial government said today. The accident occurred in Jingyu province when the roof of a shaft of Longma Coal Mine collapsed suddenly, when five miners were working underground.
The accident killed all the five at the accident site. By early this morning, remains of all the five victims had been retrieved, Xinhua news agency quoted administration officials as saying. Cause of the accident is being investigated.
OneSteel reveals $84 million profit
Australian OneSteel Limited has revealed a soaring $84.1 million profit in the six-month period to December 2005. CEO Mr Geoff Plummer announced that this is an increase of 19.6% on the $70.3 million in the same period of 2004.
Mr Plummer said the reason for this steep increase in net profit was linked to a few different contributing factors. The increase in the amount of steel exported was a notable change, rising from 57,000 tonnes to 95,000 tonnes. Higher export volumes lifted export sales revenue 69.1% to $119 million. This huge increase was mostly due to the completed reline of the Whyalla blast furnace, pushing export steel production back to normal levels.
Mr Dolle asks EDF to keep stake in Arcelor
Arcelor CEO Mr Guy Dolle said that EDF's interests would be best served by holding on to its 1.5% stake in Arceor and rejecting bid launched by Mittal Steel. He said 'I have no doubt that Arcelor will show that it is in EDF's interest to remain a shareholder,
Dolle's comments came after EDF CEO Mr Pierre Gaddonneix said in an interview in French financial daily Les Echos that he does not rule out selling the utility's stake in Arcelor, which he regards as purely a financial investment.
High speed wire rod line for TSW Trierer Stahlwerke
Germanys TSW Trierer Stahlwerke GmbH has contracted Danieli for the major upgrading of its existing casting and rolling facilities in Trier for enhancing plant production, efficiency and product quality. The rolling mill facilities will be upgraded and completed with the installation of a new high speed Wire Rod Line after the existing roughing and intermediate mill. Plant startup will take place at beginning of 2007.
The upgraded mill will be designed for the production of approximately 500,000 tonnes per year of 5.5 to 22 mm wire rod for a wide range of quality steel grades, as low medium high carbon, cold heading, spring steel, pre-stressed and welding wire and drawing grades, rolled at finishing speeds of up to100 mps. The coil weight will be max 1.6 tonnes although the equipment is designed for future 3 tonnes coils.
Several modifications in the existing roughing and intermediate mill including new crop and cobble shears and 2 new ESS pre-finishing compact cantilever stands in H-V arrangement. A cooling and equalization loop in front of the finishing block for temperature-controlled rolling. A 10-pass DWB high-speed finishing block, loop layer, DSC controlled cooling line and a combined vertical / horizontal Sund coil handling and compacting system.
In addition, the existing Danieli continuous casting machine will be modified for casting larger size billets and for higher grades steels. This will involve the installation of protected stream casting technology and Mould Electromagnetic Stirring system. New cast size will be 160x160mm billets in 8.5 meters length. The conticaster will also be completed with new hot and cold charging facilities, including a quick billet transfer for the existing billet cooling bed.
Danieli Automation will supply all Electricals and a new automation system up to Level 2 for both the conticastrer and rolling mill upgrading. Danieli will also supply a complete new water treatment plant and will be in charge of all the erection works.
Ukraines SCM restructuring business
It is reported that System Capital Management, the holding company of Donetsk based business tycoon Mr Rinat Akhmetov, has been reshuffling its business structure in the hopes of streamlining operations and increasing the groups attractiveness to investors. The company appears to be moving quickly to revamp and attract fresh capital needed for modernization efforts.
On Feb. 16, company representatives announced that SCM, which controls assets in various sectors ranging from metallurgy to beer, has shifted all of its energy-sector assets into a separate company within the group. The assets had earlier been managed directly by SCM top management. Now they will be managed by the newly established Donbass Fuel and Energy Company. SCM officials said the new energy company will be structured as a vertically integrated electricity production chain, assuming management of the Pavlohradvuhillia coalmine holdings, the Komsomolets Donbasu Mine and the Skhidenergo power generation company.
SCM GD Mr Oleh Popov said the move is intended to increase transparency and establish a more efficient management structure. Officials have not ruled out the possibility of raising investments for the new energy company or other SCM assets in line with Azovstals success. They said, however, that it was too early to talk about an Initial Public Offering of company stock.
Ziscosteel looking for foreign investment
Zimbabwe Government has ordered an investigation into the failure by the Zimbabwe Iron and Steel Company Ziscosteel to attract a technical partner, with a view to inject fresh capital in the operations of the mill. Ziscosteels board is expected to come up with a turnaround policy aimed at strengthening financial accountability, improving corporate governance, boosting capacity utilization, charging economically viable prices and controlling huge debt overhangs
ZISCO board chairman Mr David Murangari said that the board would soon launch an inquiry on the joint venture transactions. The board is scrutinizing joint ventures involving ZISCO and foreign investors, he said. Mr Murangari said that the Government was concerned by Ziscosteel failure to attract any foreign partners despite having been on the lookout for a technical partner for several years. There are some willing investors in possible joint ventures and it is a matter of time before everything is completed, he said.
Mr Murangari said Ziscosteel needs to raise funds to import machineryand that the foreign investors were expected to inject funds towards the refurbishment of the furnaces, which have been operating below capacity over the past few years due to the non availability of spare parts and foreign currency shortages.
Sources said foreign investors were not keen on a JV with the Ziscosteel because of its poor track record in recent years. It is not easy to convince investors in these volatile economic times but if the economy improves then some may agree to the joint venture proposals, said an official.
Nippon Steel-Arcelor pact has control change clause
Nippon Steel Corps President Mr Akio Mimura said that its technology tie-up agreement with Arcelor includes a clause that allows either party to terminate the contract in case of a change of company control. "Technology is an important asset for Nippon Steel. But we have not decided how to use this clause yet," Mr Mimura told a news conference.
Arcelor produces steel for cars using Nippon Steel's technology and sells it mainly to Japanese automakers operating in Europe.
Russel Metals reports drop in earnings
Toronto based steel distributor Russel Metals Inc reported that its revenue increased and profit dropped slightly to $41.8 million during Q4. Revenue was up 4% at $646.9 million. For the full year, earnings fell to $124.7 million from $177.9 million or $3.56 per share in 2004. But annual revenue rose to $2.6 billion from $2.4 billion.
The annual earnings, while below those in 2004, "are significantly ahead of prior years as average steel transaction prices remained at historical highs," the company said.
"During 2005 we experienced continued outstanding performance throughout our operations and the strength of the second-half results further demonstrated our ability to maximize profits in a cyclical environment," Mr Bud Siegel president and CEO said.
Russel Metals is one of the largest metals distribution companies in North America. It carries on business in three distribution segments: metals service centers, energy tubular products and steel distributors.
Evraz's ZSMK overhauls oxygen converter
Evraz Group's West Siberian Iron & Steel Plant ZSMK completed a mini overhaul at the No 5 oxygen converter in its No 2 oxygen converter division, the plant's public relations department said.
The overhaul included the replacement of the obsolete control system for feeding ferroalloys with a new automated control system based on a Siemens programmable controller. This was the last link in the integrated system the plant has installed for monitoring the use of alloy elements in steel smelting.
As Villares 2005 earnings dip by 8% in 2005
Brazilian specialty steel producer As Villares' net profit fell 8% to 220 million reais ($103mn) in 2005 as compared to 239 million reais in 2004.Net revenue in 2005 totaled 1.73 billion reais up by 0.6% from 1.72 billion reais in 2004. EBITDA in the 2005 increased by 6% to 456 million compared to 429 million in 2004.
Sales in 2005 decreased 11% to 576,000 tonnes from 646,000 tonnes due to lower sales volume of specialty steels for the industry that builds machinery. Exports accounted for 18% of 2005 output.
"The company sustained throughout 2005 the same profitability achieved in the previous year, not including the significant appreciation of Brazil's currency," the company said.
RBCT appoints new executive chairperson
South Africa's privately owned coal export hub, the Richards Bay Coal Terminal of Kwazulu Natal, has appointed Mr Kuseni Dlamini, as its new executive chairperson. Mr Dlamini, who is a business and political analyst, is known in the mining industry in South Africa and the United Kingdom, owing to stints with global companies, such as De Beers and AngloGold Ashanti.
Mr Dlamini will reportedly focus on providing strategic direction and leadership to RBCT and ensure that the company's transformation becomes a reality. Following his appointment, Mr Dlamini said he would seek not only to reposition RBCT, both locally and internationally, but also to ensure that the company remains a world-class coal export facility.
He also added that the RBCT recently embarked on a phase 5 expansion plan, aimed to increase the tonnage throughput from 72 million tonnes per year to 92 million tonnes per year by July 2008.
Arcelor announces mailing of notice of extension for Dofasco
Arcelor SA announced that it has mailed its Notice of Extension confirming the extension of the expiry date of its offer to acquire all remaining outstanding common shares of Dofasco Inc to 8PM Toronto time on March 7, 2006.
At midnight on February 20, 2006, Arcelor took up and acquired ownership of 69,563,143 common shares of Dofasco including shares deposited by guaranteed delivery, representing 88.38% of the Dofasco common shares outstanding on a fully-diluted basis. The current extension is intended to permit shareholders that did not tender their Dofasco common shares on or prior to February 20, 2006 a further opportunity to participate in the offer.
Millennium Mine construction delays to push coal shipments
Operators of the new Millennium mine in the Bowen Basin say construction delays will prevent the mine in shipping coal in the current financial year. The mine is already facing a $65 million blow out in the cost of its preparation plant.
Excel Coal MD Mr Tony Haggarty said that the contractor licensed to construct the mine has been fired, with Millennium now in control of the project. He says Millennium's experience is a lesson for all companies wanting to develop mines.
Latin American steel industry set to consolidate
After Mittal Steels bid for Arcelor, the top three steelmakers in Latin America Arcelor, Techint and Gerdau are expected to step up their own acquisitions to boost their position in the region. Mittal Steel owns only Mexican steel slab making mill at Lazaro Cardenas and the Point Lisas mini-mill in Trinidad and Tobago, but is generally seen as underweight in South America.
"There will be consolidation whether the bid succeeds or fails," said Ms Catarina Pedrosa, steel analyst at Banif Investment Banking in Sao Paulo. Consolidation will give the global steel industry greater leverage over iron ore and coal purchase prices as well as steel selling prices, added Cristiane Viana, metals analyst at BES Securities in Rio de Janeiro.
Last year Arcelor, Gerdau and Techint accelerated steel consolidation in South America.
Arcelor created Arcelor Brasil as a Latin American holding company including Companhia Siderurgica de Tubarao (CST), Belgo Mineira, Vega do Sul in Brazil and Argentina's biggest long products steelmaker, Acindar. Arcelor also recently acquired Brazilian stainless steel producer Acesita SA which trades separately on the Sao Paulo stock exchange.
Last year, Gerdau, Brazil's leading producer of long rolled steel, created Gerdau America do Sul Participacoes, with crude steel production capacity of about 8.5 million tonnes a year. Gerdau, based in southern Brazil, plans to raise output by 4 million tonnes in the next three years, mainly in Brazil, but will also expand output in Colombia, Chile and Argentina. It owns Colombian long products mill Diaco and its special steel unit Sidelpa plus Chilean mini-mill Siderurgica Aza.
Last year, the Argentine group Techint created Ternium as its Latin American holding company. It includes stakes in Venezuela's Sidor, Argentina's Siderar and Mexico's Hylsamex with total annual capacity of about 12 million tonnes of steel and is Latin America's biggest exporter of finished steel products. Ternium's strength is in high-value-added, flat-rolled products. However, it also produces long products and feedstock for Techint's Tenaris pipe-making empire, which also has Latin American mills in Argentina, Venezuela, Brazil and Mexico.
Brazil's Companhia Siderurgica Nacional CSN, the country's largest independent steelmaker, is seen as a potential prize, offering steel making and iron ore assets. It aims to nearly triple iron ore output at its Casa de Pedra mine in central Minas Gerais state to 45 million tonnes a year of ore by 2008. It currently produces about 6 million tonnes a year of steel. "CSN is a natural target because it has a single owner," said Banif's Pedrosa.
In Mexico, analysts say Mittal Steel is interested in Mexican conglomerate IMSA's steel unit, which is being spun off from the company's plastic and aluminum operations. "There is supposedly interest in IMSA by Mittal," said analyst Carlos Hermosillo of Vector brokerage in Mexico City "The only thing IMSA has said is that it is studying all the possibilities that exist, and it seems though they have not confirmed this that Citibank are their advisors."
Some analysts say that Ahmsa, Mexico's largest integrated steel mill, with annual production of 3.2 million tonnes a year and plans to boost capacity to 4.6 million tonnes a year, could be a takeover target once its debts have been restructured.
Potential takeover targets are also in Colombia and Chile.
