March, 01 2006
Indian budget announcements for steel industry
Indian finance minister Mr P Chidambaram has announced the budget for 2006-07. The main announcements relating to steel & coal industry are
1. The duty on primary steel is at 5%. I propose to reduce the duty on alloy steel and primary and secondary non-ferrous metals from 10% to 7.5%. This will also be the rate of duty for ferro alloys.
2. In 2004-05, in view of the high international prices of steel, I had reduced the import duty on steel melting scrap to zero. With prices of steel coming down, I propose to restore the duty to 5% and bring it on par with primary steel.
3. Customs duty has also been reduced from 5 to 2% on mineral ores and concentrates, from 10 to 7.5% on refractories and several raw material used by refractory.
4. A comprehensive review of the coal policy is underway. This year, 45 coal blocks have been allotted for captive consumption to the power, cement and steel sectors and to the State Governments. After reserving blocks for Coal India Limited and its subsidiaries for the period up to 2012, it has been decided to de-block coal reserves of 20 billion tonnes for power projects. The definition of captive consumption will also be amended to allow coal mining by producers with firm supply contracts with steel, cement and power companies. The capacity of Central Mines Planning and Development Institute Limited to drill in order to prove reserves is now only 200,000 meters per annum, and this will be expanded substantially.
5. Honorable Members would recall that last year I had taken the power to impose a CVD on all imports to compensate for State level taxes. This levy was applied only to imports of ITA bound items and their inputs, except IT software. After the introduction of VAT in most States, I have received representations from trade and industry that this levy should be extended to all imports. The argument is persuasive, and I propose to impose a CVD of 4% on all imports with a few exceptions. Full credit of this duty will be allowed to manufacturers of excisable goods.
Reactions to budget from steel majors
The country's major steel players welcomed the Union Budget proposals for the fiscal 2006-07 with some hailing it as growth-oriented while a major player said the budgetary proposals fell far below expectations. Domestic steel prices are set to move upwards post budget as steel companies may try to pass the increase in raw material cost arising out of 5% customs duty on melting scrap to its consumers. This move is expected to increase cost of production of scrap based steel producers. The duty on melting scrap, however, has been welcomed by sponge iron manufacturers, who feel that consumption of sponge iron for steel making by domestic companies would now increase.
TATA Steel MD Mr B Muthuraman said that this year's budget has laid stress on continuity of policies for sustaining the growth momentum in the economy. Talking about the impact on the steel industries, he said, ''While we are yet to assess the full impact of the Budget, it appears marginally positive for the steel sector with the reduction in peak customs duty on non ferrous metals, ferro alloys, refractory and on minerals, and simplification of FBT.'' About the impact on the coal sector he said ''De-blocking of coal blocks of 20 billion tonnes of coal is a welcome move. Finance Minister has indicated that a comprehensive new policy on coal is being framed and we are hopeful that it will take care of the requirements of the steel industry too,'' Mr Muthuraman said.
However, Essar Steel is not happy with the budgetary proposals. "The steel sector welcomes the duty corrections in the range of 2.5 to three per cent on iron ore, zinc etc, but the rate cuts are far below our expectations and will have only a marginal impact on our costs," Essar Steel MD Mr Prashant Ruia said when asked to comment on the Budget 2006-07
Mr Vinod mittal MD of Ispat Industries said the budget was certainly growth-oriented with special focus on rural development. The reduction in central excise on small cars from 16 to eight per cent will bring down the car prices thereby boosting steel demand.
Mukand per se will become more competitive in terms of cost of production since we use iron ore for manufacturing alloy steel, Mr Bajaj said. But he expressed concern that the increase of customs duty for melting scrap would raise the cost of production for other manufacturers. The reduction in customs duty on alloy steel was unwarranted, Mr Bajaj said. We were expecting an increase in customs duty on alloy steel from 10% to 15%, he added. According to him, the increase in customs duty on melting scrap has come when costs of scrap and its equivalents have increased internationally.
JSW Steel vice-chairman Mr Sajjan Jindal said that the Budget did not have much to be happy about for the steel industry. The minister said that India would be made a hub for steel manufacturing, but no measures have been announced for it. He said the steel industry was expecting an increase in customs duty, which has not come through.
"We may see between Rs 500 to Rs 1000 increase in price of steel as increase in duty on scrap in Budget has come at a time when international scrap prices have shot up from $235 a tonne till last month to $270 per tonne now. For our company, the 5% duty would mean additional annual outgo of about Rs 12 to Rs 15 crore," MR NC Mathur of Jindal Stainless Steel told.
Mr Moosa Raza, president of Indian Steel Alliance said that the ISA welcomes the corrections on the inverted duty structure, the reduction in customs duty on zinc, refractory, iron ore and catalysts. However, it is bound to feel the impact of the increase in MAT by 2.5%, which an expanding steel industry will not be able to recover in seven years. "The steel industry had hoped for some relief in the excise duty, especially on products that go into the construction. This has not happened," he added.
Mr SS Beriwala, chairman of SRRMAI Steel Re Rolling Mills Association of India, who is also a member of the Bharat Chamber of Commerce, told that the 5% import duty on steel melting scrap would only push up prices of ready steel. At the same time, the duty cut on ready steel imports would flood the Indian market with Chinese steel products.
Indian Railways to move 726 million tonnes in 2006-07
Indian Railway Minister Mr Lalu Prasad Yadav has fixed a freight target of 726 million tonnes for 2006-07, an increase of 8.7% over 2005-06 and is expected to yield Rs 40,320 crore.
Railway freight loading is estimated to registered an unprecedented growth rate of 11% to touch an estimated 668 million tonnes in 2005-06 resulting in estimated freight revenue of Rs 36,490 crore as against Rs 30,778 crore in 2004-05
Mr Yadav explained that the improvement in the finances was mainly due to additional loading of 4-8 tonnes per wagon and reduction in wagon turnaround time, enabling an increase of 100 million tonnes in loading capacity.
Reliance Infrastructure gets nod to operate container trains
It is reported that Reliance Infrastructure has secured in principle approval from the Railway Board for running container trains on specific routes across the country under category-I license. The next step for Reliance Infrastructure will be to sign a MoU with the Railways before going ahead with the project. Reliance Infrastructure will soon enter into an agreement with an existing rail ICD operator and rail terminal operator to use their facility for container train operations, it is learnt.
Under category-I routes it will operate container train services to and from all existing and future inland container depots linking the Jawaharlal Nehru Port, Mumbai Port, national Capital Region, Port Pipavav, Mundra Port, Kandla Port, Chennai Port, Ennore Port, Visakhapatnam Port, Cochin Port, New Mangalore Port, Tuticorin Port, Haldia Dock System, Kolkata Port, Paradip Port and Mormugao Port.
Reliance Infrastructure reportedly proposes to invest about Rs 500 crore in the project.
Sumitomo Metal & Nippon Steel mull partial merger of units
It is reported that Japans largest steel company Nippon Steel Corp and third largest Sumitomo Metal Industries have agreed to boost cooperation, with the aim of merging three subsidiaries and to begin studies on the integration of their structural steel sheet and civil engineering materials businesses. They aim to sign formal agreements in May and integrate the operations by October to make the businesses more competitive.
Japanese steel makers have been stepping up cooperation as they build their defenses against possible hostile foreign takeovers. Global steel industry is in the midst of consolidation with Arcelor currently being the target of a hostile takeover bid from Mittal Steel.
Australian export earnings to rise by 7% in 2006-07
The Australian Bureau of Agriculture and Resource Economics (ABARE) said that commodity export earnings of Australia will rise in 2006-07 by 7% to reach A$134 billion in one of the commodity forecast released this week at the ABARE Outlook Conference. According to ABARE ED Dr Brian Fisher exports earning forecast for 2006-07 mainly reflects increased export shipments of iron ore, LNG, grains and oilseeds in response to strong demand in Australias export markets.
Over the medium term, and compared with 2004-05, the largest increases in the value of exports in 2005-06 is projected to come from iron ore up by 99%, LNG up by 95% and metallurgical coal up by 33% says ABARE. Total earnings from these three commodities are projected to account for around 75% of the total increase in the value of Australian exports between 2004-05 and 2010-11.
In 2006-07 iron ore is forecast to become Australias largest export commodity in value terms, replacing metallurgical coal.
Eisenhower Global Leadership award for Mr LN Mittal
It is announced by Business Council for International Understanding that Mr LN Mittal CEO of Mittal Steel Company will be honored with the Dwight D Eisenhower Global Leadership Award in 2007. The award will be presented at BCIU's Annual Opera Gala at the Metropolitan Opera House at Lincoln Center in New York City tentatively scheduled for Fall 2007.
The award notes that over the past two decades, Mr Mittal has been at the forefront of the consolidation of the global steel industry. As CEO of the world's largest steel company, Mr Mittal has built a truly international leader with 175,000 employees in locations across 14 countries and four continents. "Mr Mittal has transformed the fragmented steel industry, turning it once again into a global force for good in communities worldwide," said Mr Peter Tichansky President and CEO of BCIU. "His sound business practices and resounding commitment to the communities in which Mittal Steel operates necessitates recognition. The Mittal Steel portfolio defines today's multinational corporation, ranging from a New York Stock Exchange listing to a Rotterdam headquarters to operations spanning the globe: China, Romania, South Africa, Poland, the United States, Kazakhstan."
"Receiving the Dwight D. Eisenhower Global Leadership Award is an honor that I accept on behalf of the individuals representing 45 nationalities who represent the fabric of Mittal Steel Company," said Mr Mittal. "Mittal Steel is committed to playing a major role in the countries where we have operational presence because we believe that we have a responsibility to contribute to the well-being of our employees, families and societies. We remain dedicated to expanding our international presence not only as a leader in the steel industry but also as a truly multinational company committed to making substantial contributions through community support initiatives." He added
The award is established by Business Council for International Understanding which is a non-profit US business association dedicated to forging relationships and promoting dialogue between business and government communities across the globe. Since its inception in 2003, the award has been given to business executives who exemplify the definition of an international business leader by exhibiting outstanding contributions to global commerce.
Past Dwight D Eisenhower Global Leadership Award honorees include Mr Lee Raymond Chairman and CEO of Exxon Mobil Corporation in 2003, Mr Raymond Gilmartin Chairman and CEO of Merck & Co Inc in 2004, Mr John Browne Group CEO of BP in 2005 and Mr Jeffrey R Immelt Chairman and CEO of General Electric in 2006.
"Outlook Stable But Bumpy Road Ahead" in Asia Moody
Moody's Investors Service says in a new report that it has a stable outlook for the rated Asian steel industry (ex-Japan), but lower prices and persistently higher input costs remain as key challenges for the industry. Within the sector, investment grade issuers display substantially better prospects for withstanding these challenges.
Moodys report titled "Outlook Stable, But Bumpy Road Ahead" looks at various themes, including key rating factors; profitability and cost efficiency; financial policy and financial strength; business diversity and other rating considerations. Over the next 12 months, the sector's credit quality will be determined by trends in regional steel prices and raw material costs and their effects on profitability and cash flow; expansion plans and their impact on financial strength; and the abilities of smaller companies to manage liquidity.
"Weakening industry fundamentals in the past nine months, due principally to the oversupply of certain steel products in China, have prompted material declines in major product prices, albeit from cyclical highs," said Mr Terry Fanous senior VP in Moody's Sydney office. "While prices have lately shown some improvement, we are assuming continued softness in 2006, although further material price deterioration is unlikely as China's strong economy should continue to support fundamentals", Mr Fanous said.
Mittal Steel Europe CEO rules out higher price for Arcelor
Mittal Steel has ruled out raising the price on its $23 billion takeover bid for Arcelor as it is preparing to present its case to European governments. "We think our offer is fair, especially because Mittal Steel shares are currently overvalued," Mr Roland Baan CEO of Mittal Steel Europe, told reporters in US on Monday. "The financial benefits of the merger are very significant," he said,
The Financial Times, quoting stock analysts, said Monday that Mittal Steel would have to raise its offer of 28.21 euros a share by about 20% if it wants to win over reluctant Arcelor shareholders.
Iron ore freight surcharge seems to be off agenda
It is reported that price negotiations will continue in China and Japan this week, but it appears increasingly unlikely that mining giants Rio Tinto and BHP Billiton will push for a surcharge to cover the cheaper freight cost from Australia.
BHP held out last year for a premium to bring Australian iron ore prices in line with Brazil, which had demanded about $20 a tonne more for its iron ore because of the greater cost of shipping from South America. The company was forced to back down after a backlash from steelmakers.
BHP CEO Mr Chip Goodyear also signaled a softening of the company's stance on the issue recently. "It's not something that we're going to die in the ditch over," he said.
Da Nang city to halt steel ingot furnaces by 2008
Vietnams Da Nang City Peoples Committee has asked ingot steel furnaces operational in industrial zones to halt production by the end of 2008 in order to ease the environment pollution and has set up a mission in charge of inspecting the operation of the ingot steel furnaces located in industrial zones. The solutions to cope with the environment pollution will be put forward by the mission after the inspection tour finishes at the end of March.
The operation of the ingot steel furnaces in the industrial zones in Da Nang City has been polluting the environment, badly impacting on the daily life of the citys residents. Da Nang authoritys decision to stop the sources of pollution has been applauded by the local residents.
Previously, the citys authority on December 23, 2005 released the decision not to grant licenses to new ingot steel projects. The operational ingot steel furnaces will have to stop production from 2009 to ease the environment pollution.
Da Nang Steel Companys project on steel making in the Lien Chieu Industrial Zone, in which it has injected VND100 billion ($6.6 million) will have to halt production in three years. The company reacted that the year 2008 would be too early to halt production as the project will not be able to recover the investment capital, while a plan on the plant relocation has not been thought yet. If the project ends its operation, the Da Nang authority will have to compensate the investors and support the existing 400 workers in looking for other jobs.
South Korea may toughen rules on hostile takeovers
It is reported that South Korea may toughen rules on share tender offers to help shield domestic companies from hostile takeover attempts, citing a senior official at the country's top financial regulator said on Tuesday.
The comment came after US investors made an unsolicited takeover offer for South Korea's largest tobacco maker, KT&G Corp sparking calls from domestic media for tougher regulations. The bid is being closely watched since it could serve as a litmus test for other foreign hostile takeover bids for the country's top firms in which foreigners have a large stake, such as steel maker POSCO analysts said.
Mr Kim Yong-Hwan, an official at the Financial Supervisory Commission, told reporters the regulator might consider reviving a rule requiring an investor willing to buy 25% or more of a firm listed on the local exchange to buy more than 50%. "The commission may consider introducing the compulsory tender offer requirement," Mr Kim was quoted "As the hostile takeover has become a social issue, the government now feels the need to do something to help better protect companies, while complying with global standards."
AK Steel strike & lockout looming
The union representing 2,700 hourly workers at AK Steel's Middletown Works said there has been some movement in negotiations. The current contract runs out tonight at midnight, and a strike or lockout is possible. But union officials said they've received a new proposal from the company and are offering a counter-proposal.
AK Steel has said it needs to reduce its work force, freeze its pension plan and get workers to pay part of their health care costs. Union members overwhelmingly voted to authorize a strike earlier this month.
Mittal Steel to hunt for acquisitions in India & China
It is reported that Mittal Steel's hunt for acquisitions will shift to China and India once the company has pulled off its planned $22.1 billion takeover of Arcelor citing CFO Mr Aditya Mittal. Mr A Mittal said the world's biggest steel maker would have enough assets in Europe and North America once it completes the takeover. The merger would create a steel company 3 1/2 times as big as its nearest rival.
"After purchasing Arcelor, we will have a commanding position in Europe and North America, so the focus will be on China and India, with a few small bolt-on acquisitions elsewhere," Mr A Mittal told the Times daily.
"For every dollar we spend on research and development, we can leverage it over 130 million tones of production. Over time we will take more market share. Our competitors have a choice: they can remain one third of our size or join in the consolidation," Mr Mittal said.
Nigerian BPE sells three steel rolling mills
Nigerian Bureau of Public Enterprises has generated N5 billion from the sale of three steel rolling mills under liquidation process. Zuma Steel West Africa Limited has already paid N800 million for Jos and Osogbo Steel Rolling Mills, Kura Holdings Limited has paid N2.61 billion for the Osogbo Steel Rolling Complex and Dana Group bid N1.46 billion for the Katsina Steel Rolling Mill.
Zuma Steel and Kura Holdings offered the highest bid in a bid opening in November last year by the three liquidators of the rolling mills led by Babington Ashaye for the BPE. While the bid offer by Kura Holdings for the OSRC met the National Council on Privatization requirements, the council asked that the offer by Zuma Steel be renegotiated having fallen short of the reserve price for the company.
MEPS analyses Mittal-Arcelor mergers effect on steel prices
Mittal Steels dramatic takeover bid for Arcelor is the biggest ever attempted merger in the steel industry. The proposed creation of the worlds first 100 million tonnes per year steel producer has generated massive media coverage. But much of this has been about the politics of the proposed deal, its financial aspects, and the supposed clash of cultures between the two companies. The consequences for the steel market and steel buyers bear closer examination than they have received so far.
MEPS say that both Arcelor and Mittal have made much of their policy of putting profits before tonnes. Both say they are willing to cut production and hold steel off the market in order to support price levels. So a merger should be bad news for steel buyers, as it would in theory at least reduce their ability to negotiate lower prices at times of slack demand.
In fact, MEPS analysis shows that the combined company would gain very little additional market power. This is partly because the two businesses are largely complementary in terms of geography and product. Arcelors operations have little overlap with Mittals. In most of the markets they serve, there are plenty of alternative suppliers. Some common ground does exist between the two companies, but this will be largely eliminated. In North American strip products, Arcelors acquisition of Dofasco takes it into direct competition with Mittal Steel USA but Mittal says it will sell off Dofasco if it gains control of Arcelor. The US and Canadian regulators would probably force it to do so in any case.
MEPS say that structural sections in Europe form another overlap that might be more troublesome for the proposed new company. The combined beam market share of Mittal and Arcelor is likely to be higher than the EUs competition authorities would allow. They may insist on the divestment of some section mills as a condition of approving the merger.
Lastly MEPS says that if the Mittal-Arcelor union goes ahead, consolidation in the wider steel industry still has a long way to go. The combined company would produce about three times as much as each of its nearest rivals Nippon Steel, Posco and JFE Steel but would still account for only about 10% of world total steel output. Steel companies lament the pricing power of their iron ore suppliers. The top three mining companies have a combined market share of at least 75%. But the creation of just one very large steel producer especially as it is partly self sufficient in iron ore is not going to pose a serious threat to that oligopoly.
Oregon Steel secures large order of large diameter pipes
Oregon Steel Mills Inc announced that it was awarded a contract to supply large diameter pipe for the Rockies Express Pipeline LLC Project, a new 1,323 mile natural gas pipeline which will originate near Cheyenne, Wyoming, and extend into eastern Ohio. Construction of the pipeline is anticipated to begin in May of 2007.
The contract is for approximately 510,000 tons of 42 inch X-80 grade large diameter line pipe. In addition to the firm order, REX also has an option, through March 14, 2006, to purchase an additional 350,000 tons of Pipe from Oregon Steel.
Oregon Steel is expected to begin production of the Pipe for the Project beginning in the fourth quarter of 2006 at Oregon Steel's pipe mills located in Camrose, Alberta, Canada, and Portland, Oregon.
Oregon Steel Mills Inc is organized into two divisions. The Oregon Steel Division produces steel plate, coil, welded pipe and structural tubing from plants located in Portland, Oregon and Camrose, Alberta, Canada. The Rocky Mountain Steel Mills Division, located in Pueblo, Colorado, produces steel rail, rod, bar, and tubular products.
Infrastructure expansion a must to sustain exports says ABARE
It is reported that boosting rail and port infrastructure will be critical for Australia's export earnings according to the Australian Bureau of Agricultural and Resource Economics. ABARE commodity forecaster Mr Andrew Dickson said "When you look medium-term, the value to our bulk commodity exports isn't going to be achieved through high prices it will be achieved with increased volumes".
Following last year's massive 71.5% in the benchmark contract iron ore price, ABARE is forecasting that prices will rise by a further 12% in 2006-07. That would see iron ore overtake coking coal as Australia's single biggest commodity export, generating $18.9 billion dollars, compared with $14.8 billion for coking coal. But, beyond 2006-07, prices are expected to come down by about 40% by 2011. Coal prices are already heading lower.
ABARE also warned that production increases would be constrained in the short term by ongoing labor, skills and equipment shortages, which were dramatically increasing mine and plant development costs. It says there are no quick fixes available for the worldwide shortages of mining labor and skills.
ABARE is forecasting the volume of Australia's iron ore exports to rise by 56% to 375 million tonnes by 2011, accounting for 43% of the global seaborne trade.
Russian government gives up rights of management in iron ore companies
Russian government has decided to give up its special right to participate in the management of a number of open joint-stock companies, including a number of mining and beneficiation plants and industry institutes, the government press service said, citing a decree signed by Prime Minister Mr Mikhail Fradkov.
The government has canceled its so called golden share in Kachkanarsky GOK and Vysokogorsky GOK iron ore producers that are part of the Evraz Group.
Portman profit jumps on iron ore prices
Iron ore miner Portman Ltd expects better production in 2006 after posting a 160% jump in annual net profit to $84.2 million, benefiting from iron ore price hikes last year. The result compares to $32.2 million in 2004.
During 2005 Portman produced 6.9 million tonnes of iron ore from its operations in Western Australia. The Koolyanobbing operation produced a record 5.8 million tonnes while the smaller Cockatoo Island mine produced 1.1 million tonnes.
It said there was continued strong pressure on the operating costs at its operations. "Strong upward pressure on the majority of input costs has been a feature throughout the year and shows no sign of abating," the company said.
It is ramping up capacity at Koolyanobbing to 8 million tonnes a year but said the expansion has been hampered by significant skills shortages. The additional capacity won't be available until the first quarter of 2006 and Portman said the mine would operate at a rate of 6 million tonnes a year in the first quarter. The cost of the expansion has also been pushed out, now costing $80 million, up on the original estimate of $55 million.
Cleveland Cliffs took control of the Perth based iron ore group last March after paying $675 million for its 80% stake.
Xstrata and ARM JV to build new coal mine operations
Mining Weekly Online reported that a new black controlled coal company is to build a R2.3 billion coal operation in Mpumalanga that will include the construction of a 12 million ton a year opencast Goedgevonden coal mine.
The new company created by African Rainbow Minerals and the Xstrata plc will be built, managed and mined by Xstrata Coal South Africa. Arm Coal will have a 51% share of Goedgevonden and also 20% of Xstrata Coal South Africa, with an option to increase that to 30%. The new company will seek a 3% to 3,5% export allocation at the Richards Bay Coal Terminal.
The Goedgevonden, located 5 km south of Ogies, with a 20 year life of mine, is one of Xstrata Coal South Africa's 13 mines, 11 of which it manages. The new mine will be exporting 3.2 million tons and selling 3.4 million tons on the domestic market. Goedgevonden, already producing at a rate of 1.4 million tons a year, will have a three year lead time to achieve the new 12 million run of mine tons a year capacity.
Sinosteel eyeing iron ore operations in Argentina
It is reported that Sinosteel Corporation is mulling joint investments in cooperation with A Grade Trading in Argentine iron ore miner Hiparsa as it is resuming operations at the Hiparsa iron ore complex, including the Sierra Grande iron ore mine, in southern Argentina's R Negro province.
The Hiparsa complex consists of the mine, the industrial area, a 32km-long pipeline to transport the concentrates, a pelletization plant, storage and warehousing facilities and a port. Sierra Grande's ore reserves, which are part of the iron complex, are estimated at 250 million tonnes to 300 million tonnes. A Grade Trading plans to reach production of 3.2 million tonnes per year of iron pellets.
SCM acquires majority stakes in two mining machinery plants
As per a report in a Ukrainian media System Capital Management, Ukraine's biggest steel, mining and machinery group, purchased a 64.53% stake in the Kryvy Rih Mining Equipment Plant and 55.22% of the associated Kryvy Rih Central Mining Repair Plant.
TopUniversal Stainless to add 7th Vacuum Arc Remelt Furnace
Universal Stainless & Alloy Products Inc announced that its Board of Directors has approved the purchase of a seventh vacuum arc remelt (VAR) furnace, which will be the second such furnace installed at its Bridgeville facility. Vacuum arc remelting is a value-added process required to produce high quality grades of steel primarily for aerospace applications. It is expected to be operational in September 2006.
The project, including equipment purchase and installation, is estimated to cost between $2 million to $2.5 million and will be financed initially through the Company's existing credit facility. Payback for this investment is projected to be less than one year.
Mr Mac McAninch President and CEO said The addition of VAR capacity is a necessary step based on our substantial backlog of products requiring VAR remelting and the anticipated needs of our customers. It also is in line with our strategy to focus on higher value-added products.''
Universal Stainless & Alloy Products Inc headquartered in Bridgeville, Pa., manufactures and markets a broad line of semi-finished and finished specialty steels, including stainless steel, tool steel and certain other alloyed steels. The Company's products are sold to re rollers, forgers, service centers, original equipment manufacturers and wire re drawers.
Ukraine plans to double energy efficiency by 2030
Ukraine plans to double its energy efficiency and reduce gas imports by 47 billion cubic meters by 2030, Energy Minister Ivan Plachkov said while presenting Ukraine's draft energy strategy in Brussels on Tuesday. The draft foresees that Ukraine's energy consumption will fall from the current 0.89 kilograms of standard coal per $1 of GDP to 0.41 kilogram of standard coal in 2030.
Another of the draft strategy's goals is to achieve a significant reduction in imports of energy resources, first and foremost, oil and gas. Gas imports should fall from the current 56.4 billion cubic meters to 9.4 billion cubic meters in 2030, he said.
Reliance Steel to acquire Flat Rock Metal Processing
Reliance Steel & Aluminum Co announced that its subsidiary, Precision Strip Inc, has signed an agreement to acquire certain assets and business of Flat Rock Metal Processing LLC based in Flat Rock, Michigan. Terms were not disclosed. The transaction is expected to be completed within 60 days, subject to the completion of due diligence.
Upon completion of the acquisition, the two Flat Rock facilities will operate as Precision Strip locations that process and deliver carbon steel, aluminum and stainless steel products on a "toll" basis, processing the metal for a fee, without taking ownership of the metal.
Flat Rock was founded in 2001 and is a privately held, toll processing company with facilities in Perrysburg, Ohio and Eldridge, Iowa.
Precision Strip currently has facilities in Kenton, Middletown, Minster and Tipp City, Ohio; Anderson and Rockport, Indiana; Bowling Green, Kentucky and Talladega, Alabama. Precision Strip's customers include steel and aluminum mills as well as companies in the automotive, appliance, metal furniture and capital goods industries.
Reliance Steel & Aluminum Co., headquartered in Los Angeles, California, is one of the largest metals service center companies in the United States. Through a network of more than 100 locations in 32 states and Belgium and South Korea, the Company provides value-added metals processing services and distributes a full line of over 90,000 metal products. These products include galvanized, hot-rolled and cold-finished steel; stainless steel; aluminum; brass; copper; titanium and alloy steel.
Gindalbie Metals to raiseA$33.3 million for iron ore project
Australias Gindalbie Metals Ltd said it will raise A$33.3 million through a share placement to help fund the development of its Karara iron ore project in Western Australia's mid west region. Gindablie CEO Mr David McSweeney said the placement will enable the company to accelerate its resource drilling programs and definitive feasibility studies at Karara.
The funds raised will underpin the two stage development of the Karara project, 220 km inland from the port city of Geraldton. First production of high grade direct shipping hematite iron ore is scheduled for the second half of 2007, beginning at 1.5 million tonnes a year and rising to 4 million tonnes tons a year by 2009.
Macarthur Coals net trebled in H1
Australian miner Macarthur Coal Ltd said that net profit in the first half ended Dec 31 2005, more than trebled to A$82.1 million from A$24.1 million a year before. Revenue from coal sales rose to A$277.6 million from A$160.6 million.
"Whilst expectations on coal prices are lower at present than was the case in 2005, we believe that demand remains strong and that prices will remain well above the long-term average over the foreseeable future," Managing Director Mr Ken Talbot said.
Predegassing equipment put into operation at Kuzbass coal mine
A GBH borer of Deilmann-Haniel mining system of Germany was put into operation at Kirov's pit of the city of Leninsk-Kuznetsky in the Kemerovo region.
The borer is intended for drilling degassing wells. However, for the first time in Russia it will also be used for predegassing of production sections of coal beds.
Oregon Steel 4Q profit falls
Oregon Steel Mills Inc said Tuesday its fourth-quarter profit fell despite higher sales, as last year's results were boosted by a lower income tax rate. The company earned $33 million down by 11$ from $44.8 million during the same period a year ago. Sales climbed 8%t to $327.4 million from $302 million a year earlier.
For the full year, Oregon Steel posted a profit of $110 million down by 6% from last year's $116.7 million. Sales rose by 6% to $1.26 billion from last year's $1.18 billion.
For 2006, the company said it expects sales of about $1.48 billion.
Nickel to ease next 2 years-Abare
The Australian government's commodity forecaster expects global nickel prices to ease this year and next. Prices are tipped to fall more sharply from 2008 when major projects start to come on line, the Australian Bureau of Agricultural & Resource Economics said in a report Tuesday.
Nickel is currently trading around US$15,000 a ton on the London Metal Exchange, after averaging US$14,750 last year. Abare expects this year's average to fall to US$13,700 based on global production rising to 1.35 million tons from last year's 1.29 million, offsetting an anticipated rebound in stainless steel production.
Ongoing moderate supply growth to 1.41 million tons and slower non-China demand growth is expected to result in a 2007 price average of US$12,500, the government forecaster said. Beyond 2007 major nickel laterite projects are scheduled to start coming on stream, pushing global production up to 1.72 million tons by 2011 and world prices in real terms to $7,300, or 46% lower than this year, it said.
The weaker global nickel prices are expected to shrink Australian export returns 3% to A$3.4 billion in the fiscal year ending June 30, 2006 after falling an estimated 5% last fiscal year, Abare said.
Atlas net in H1 falls by 57%
Atlas Group Holdings reported a net profit after tax of $3.15 million for the half year to 31st December 2005, down 56.7% on the previous corresponding period. The processor and distributor of specialty steels products said the result was heavily impacted by costs associated with restructuring of the groups distribution businesses and write-downs.
The result was build on revenues of $209.17 million up 10.5% on the corresponding period, while Earnings Before Interest and Tax fell 12% to $12 million.
Atlas manufacturing division comprising of Bisalloy quenched and tempered plate manufacturing and Southward tube making, reported an increase in earnings of 87% over the corresponding period. The groups statement noted that this increase was principally driven by the additional 25% production capacity at Bisalloy that was commissioned in the second half of FY05 and continuing strong resources demand for plate. A further 30% capacity upgrade at Bisalloy, announced in November 05, is in progress, on-time and on-budget for commissioning in October 2006.
The group reported that underlying earnings of Atlas distribution division fell by 65% over the corresponding period, with a decline in stainless steel prices and weaker general market demand contributing to reduced margins, and also highlighted the urgent need to reduce cost structures, improve operating efficiency and reduce funds employed the company noted.
SUEK to secure $100 million loan
Siberian Coal and Energy Company plans to obtain a $100 million syndicated loan which is being arranged by Raiffeisen Zentralbank Oesterreich and Raiffeisenbank. The company said the loan would be repayable in two years and would be used to refinance its credit portfolio, with export contracts as collateral.
SUEK accounts for around 30% of Russia's domestic supplies and 20% of Russia's coal exports. It produced around 85 million tonnes of coal in 2005 and expects to mine 90 million tonnes in 2006. SUEK has coal producing units and subsidiaries in the Krasnoyarsk, Khabarovsk and Primorye territories, Kemerovo, Irkutsk and Chita regions and Khakasia and Buryatia republics.
