March, 04 2006
RSP registers best ever production record in February
SAILs Rourkela Steel Plant has registered the best ever production during February since its inception in the production of hot metal, slabs and saleable steel. A release said while the hot Metal production reached 168,939 tonnes, continuous cast slabs achieved 157,676 tonnes and saleable steel touched 1,74,409 tonnes during the month.
The capacity utilization in hot metal production rose to 110% while the continuous cast slabs and saleable steel production touched 124% and 136% respectively. These records are considered to be the highest ever capacity utilization in the history of RSP.
During April 2005 to February 2006 RSP has produced 1.587 million tonnes of hot metal, 1.486 million tonnes of CC sabs and 1.442 million tonnes of saleable steel registering growth of 4.1%, 2.8% and 3.1% respectively YOY.
Stemcor & Uttam Galva agree on long term sourcing pact
It is reported that UK based metal trading giant Stemcor has signed an agreement to source cold rolled, galvanized and color coated steel worth around $170 million from the Uttam Galva over a period of three years. The pricing of these products will be fixed every quarter to factor in market dynamics through the tenure of the agreement. Stemcor will source approximately 10% to 12% of Uttam Galvas annual production of 0.75 million tonnes per year.
The order is a manifestation of our initiative to get into production of value added items like galvanized and color coated steel. It also signals, in some ways, the bullish undercurrents in the steel market, Mr Ankit Miglani director of Uttam Galva is quoted to have said.
Uttam Galva is the countrys second largest galvanized steel manufacturer and has already raised its capacity by commissioning of a 6 HI Reversible cold rolling mill in April 2005 under its Rs 350 crore expansion plan.
TATA to submit revised investment proposal for Bangladesh
It is reported that TATA will submit its revised proposal to Bangladesh government, including the price of gas, within this month, citing company sources. Bangladesh government had asked TATA to submit a revised package proposal on gas pricing within two weeks after the fourth and final round of negotiations that concluded on February 8 without any concrete decision. The deadline expired on February 22.
"We did not wrap up. Most of our management officials are busy as the March is the closing month of fiscal year in India," a TATA official in Bangladesh told the news agency. "We will place the revised offer to the government within this month," he said.
Hindustan Zinc hikes prices by Rs2,400
Hindustan Zinc Ltd has raised its products' prices by Rs2,400 across all varieties. This is the eighth time that the metal major has revised its prices in the last two months. Domestic zinc prices move in tandem with the international market where strong fundamentals are pushing up the prices consistently. On the London Metal Exchange, spot zinc closed at $2,303 yesterday up from $1,912 on January 3.
The upward revision comes despite a customs duty cut to 7.5% from 10% as announced in the budget recently.
India starts AD investigation against Chinese ductile iron pipes
It is reported that Indian Commercial and Industrial department announced will start to investigate the Ductile Iron Pipe anti dumping from China.
This action is being taken on the request of domestic mills as the imports of ductile iron pipes from china increased to $1.42 million in 2005 as against $0.09 million in 2004.
India to sustain 8% growth
Indian Finance Minister Mr P Chidambaram said that the country was on a path to sustained growth of 8% per year.
"We believe that we may have reached an inflexion point in India's economic progress, that we could now well be on the road which takes us on a sustained basis to 8% growth every year," he told a business conference.
TRF bags CHP order from Bhilai Electric Supply Company
A Tata group company, TRF Ltd has bagged an order worth Rs 152.6 crore from Bhilai Electric Supply Company Pvt Ltd, a subsidiary of SAIL for a coal handling plant.
TRF engages in manufacture, supply, installation and commissioning of engineered to order equipment and systems in the areas of bulk material handling and processing, loading and unloading.
AES to set up 1000MW thermal power plant in Chattisgarh
AES India, a subsidiary of global power major AES Corporation, a fortune 500 company, announced plans to develop a 1,000 MW coal-fired power plant in Chhattisgarh with an investment of $1.2 billion.
Under a MoU signed between AES India and the Chhattisgarh government, the company will develop, construct and operate the power plant. Chhattisgarh government will provide coalmine for captive fuel supply and will purchase 7.5% of the electricity generated on favorable terms.
AES has had a presence in India since 1998. It holds 49% stake in Orissa Power Generation Corporation. The company also holds management control of the Orissa power utility.
Arsha Ceramics setting up refractory plant near Vizag
Hyderabad-based Arsha Ceramics Private Limited is setting up a special quality refractory manufacturing unit at Venkatapuram near Visakhapatnam with an investment of about Rs 22 crore. The company has acquired 15 acres of land and started the construction work. It expects to complete phase 1 of the project and commence production by the end of August.
Arsha Ceramic president Mr RVS Raju told a business daily that The plant would have a capacity to manufacture 22,500 tonnes of refractory bricks a year, and in the first phase, the production capacity would be around 15,000 tonnes, Raju said, adding, the factory was completely designed with indigenous technology but we are going to import some raw material from China.
Refractory bricks are used in steel, aluminum, zinc and other furnaces for lining purposes. India currently produces about 38 million tonnes of steel. According to the new steel policy, steel production would go up to 100 million tonnes within five-six years, while the consumption of refractory would be doubled.
Electrotherm India launches steel complex at Kutch
Electrotherm India Ltd announced the launch of its Electro TMT plus steel reinforcement bars, manufactured at the company's steel plant at Samakhiyali in Kutch district of Gujarat. "The thermo-mechanically treated steel bars will be made at our Rs 440 crore fully integrated steel plant in Kutch," director of the company Mr Avinash Bhandari said.
"The plant consists of sponge units, induction furnaces, ladle refining furnaces, a separate line for Stainless Steel making, rolling milling for rounds, TMT and wire rods and others," he told reporters. "We have already invested Rs 165 crores in this project which will have a total steel of 300,000 tonnes per annum," Mr Bhandari said.
US Steel reported to be in talks to acquire AK Steel
It is reported that US Steel is in talks to acquire rival AK Steel, a combination that would strengthen US Steels position in the automotive industry and also take AK Steel off the menu of acquisition from global players. According to a document obtained by the Pittsburgh Post Gazette, US Steel directors were told at a February 28 meeting that AK Steel officials had been given a preliminary price based on US Steel using stock to complete the purchase. Board members also have been told it would take five months to obtain regulatory clearances and that the transaction would require approval of both companies' shareholders. The preliminary timetable for completing the deal, based on optimistic assumptions is October 30.
Analyst Mr Charles Bradford of Bradford Research estimated US Steel would have to pay about $18 a share to make the purchase. US Steel expects to issue stock equal to at least 20% of its outstanding shares to purchase AK Steel. It has told Mr James L Wainscott, AK Steel's chairman, president and CEO, it was flexible about the mix of shares and cash it would use.
Spokesmen for both companies said they would not comment on rumors or speculation.
The combination would create the world's sixth largest steel producer, pending the outcome of several other transactions currently in the works. Here's a look at the two companies:
US Steel
2005 sales: $14 billion
2005 earnings: $910 million
2005 shipments: 19.7 million tons
Employees: 46,000
Facilities: Pennsylvania, Ohio, Michigan, Indiana, Illinois, Minnesota, Alabama, Mississippi, California, Mexico, Slovakia, Serbia, Germany
AK Steel
2005 sales: $5.6 billion
2005 earnings: $2.3 million loss
2005 shipments: 6.4 million tons
Employees: 8,000
Facilities: Pennsylvania, Ohio, Indiana, Kentucky
Mittal Steel aims to treble steel capacity in a decade
This projection appears in a planning document which was published on a French newspaper website on Thursday night a few days after Mittal Steel had given it to Mr Thierry Breton, the French finance minister. As per the projections in the executive summary of Mittal Steels plan for takeover of Arcelor takeover, could lead within a decade to a group with an annual output of up to 200 million tonnes, almost a fifth of existing global capacity.
Mittal Steel, with a projected output this year of more than 60 million tonnes, says that if this bid succeeds, the combined company's annual output would be about 110 million tonnes a year and the combined Mittal - Arcelor group would aim to have a production capacity of 150 million to 200 million tonnes by 2015 or sooner, which will significantly strengthen its competitive position vis-vis its peers.
The figures related to plan output in the document indicate the company would aim to continue its aggressive acquisition program of the past few years as a way of strengthening its global position. The plans would be based on an effort to "accelerate growth in key emerging markets such as India and China". A combined Mittal/Arcelor group would "utilize existing leadership in high-end steel products for use in industries such as car making and domestic appliances to grow stronger in other expanding economies such as in Eastern Europe and Turkey.
The prediction that it would increase its current production by more than three times illustrates the extent of the ambitions of the Mittal Steel, which is already the world's biggest steelmaker by volume.
Linde reported to be close to reaching a deal to buy BOC
German industrial gases group Linde AG is reported by Reuter to be close to reaching a deal to acquire its UK rival BOC Group Plc citing an industry source familiar with the situation. Earlier, the Frankfurter Allgemeine Zeitung reported on Friday that Linde could announce a deal on Monday when it holds its annual press conference, now that BOC has dropped its opposition to the approach. The paper reported that Linde would only have to sweeten its bid by 1 pound per share to around 1600 pence per share, or some 12 billion euros ($14.4 billion) in total.
According to the paper, the most important point still to be cleared is any potential objection of antitrust authorities to the deal, although the geographical overlap of the two gases groups is relatively small.
Late in January, BOC rejected Linde's initial pound 7.6 billion all cash bid due to regulatory issues and because it said it undervalued BOC's future prospects.
OYAK rejects Erdemir partnership rumors
We are still in the steering cabin of Erdemir and do not intend to leave it said OYAK General Manager Mr Coskun Ulusoy on Friday in a press briefing. Underlining that OYAK had achieved its aim in October by winning the Erdemir tender, Mr Ulusoy stressed they had not joined with a partner since then. He also remarked that they believed they would be able to manage everything by themselves, trusting in their international reputation.
Mr Coskun Ulusoy however added that OYAK could still sell a stake in the vehicle company Ataer, but it wanted to keep control of Erdemir. "Depending on the circumstances we will consider whether to take a partner in Ataer," he told. He confirmed that Ataer had been in contact with Arcelor but was also open to other initiatives.
OYAK had agreed to sell to Arcelor a stake in Ataer but called off the deal to avoid problems from Turkish competition board.
CISA disagree on NDRC report of losses in steel industry
"It's too early to say that China's steel industry is going to suffer overall economic losses," said Mr Qi Xiangdong, vice secretary general of the China Iron and Steel Association. Mr Qi's remarks came in response to a report of the National Development and Reform Commission, the nation's leading industrial watchdog, on trends in the steel industry in 2006. "There is no space for steel prices to drop further," said Mr Qi, taking the recent steel price hike by China's top steel maker Baosteel as an example.
The report released on March 1 said that China's steel sector, the biggest in the world, will get meager profits and even losses this year due to falling steel prices and rising material costs. The content of the report posted on the website of NDRC, however, was later revised in the same day. The revision of the forecast was reportedly related to the strong reaction to the NDRC report by the country's steel enterprises, which said the prediction will have a negative impact on the sector's confidence in the recovery of the steel industry.
Mittal Steel holds back detailed plans
It is reported in a daily that Mittal Steel has held back from committing itself to sending Arcelor a comprehensive planning document containing details about employment and research and development in a future Mittal-Arcelor combine after receiving conflicting signals from Luxembourg about whether it was ready to talk about the hostile bid. Mittal Steel is in principle willing to hand this document to Arcelor if Arcelor agrees to a meeting to discuss how the deal could work out.
Mittal Steel said "We note Arcelor's statement today that the Arcelor position has not changed. We have made it clear since the outset that we would like to have friendly discussions with the management of Arcelor. At the moment no such discussions are scheduled."
Arcelor CEO Mr Guy Dollsaid on Wednesday that Arcelor managers could agree to a meeting, if the document contained sufficient detail to allow constructive discussion. However Arcelor subsequently said that it had not changed its previous stance on the possibility of face to face discussions with Mittal Steel, since the idea of a merger did not make any sense and it was inappropriate to talk about a meeting.
SMS Demag acquires majority interest in Dependeq
SMS Demag AG has acquired 51% of the shares in Dependeq Industrial Plant Engineering GmbH with head office in Vienna and now will operate under the firm name of SMS Demag Process Technologies GmbH. It will be located within the Strip Processing Lines Division of SMS Demag as a competence centre for push pull pickling lines and acid regeneration plants as well as for automation in process engineering.
SMS Demag and Dependeq have been working together closely on the basis of a cooperation agreement in the field of hydrochloric acid recovery since 2001. SMS Demag is thus reinforcing its presence in the area of industrial process engineering and, through the acquisition, expects to make efficient use of synergies in the planning, execution and commissioning of process-engineering plant components.
The Managing Directors of the new company are Mr Herbert Weissenbaeck and Mr Horst Krenn, who founded the Dependeq in the year 2000.
AISI releases 2005 annual report
The American Iron and Steel Institute has released its 2005 Annual Report, SteelStrategic, Sustainable, Focus on the Future. The Report discusses how the North American steel industry supports the overall competitiveness, prosperity and security of North America. Steel producers in North America employ more than 1.5 million people through direct and indirect jobs, it says, and contribute over $80 billion in annual sales revenue.
The Annual Report conveys our industrys strategic importance to Americas future, Mr Andrew G Sharkey president and CEO of AISI said. The North American steel industry is globally competitive. North American steel producers can compete with strong steel companies, but should not have to compete with governments. We must continue to stress the need for rules-based trade and strong trade laws to ensure we do not give away our market to government-subsidized entities.
AISI serves as the voice of the North American steel industry in the public policy arena and advances the case for steel in the marketplace as the preferred material of choice. AISI also plays a lead role in the development and application of new steels and steelmaking technology. AISI is comprised of 33 member companies, including integrated and electric furnace steelmakers, and 118 associate and affiliate members who are suppliers to or customers of the steel industry. AISI's member companies represent more than 75% of both US and North American steel capacity.
Mr Wilbur Ross promotes Mittal Steel Arcelor combine
A combination of Mittal and Arcelor would take consolidation to a new level and bring about further considerable benefits for all stakeholders, said Mr Wilbur Ross, Non Executive Director of Mittal Steel while speaking at a dinner in Chicago. Mr Ross said that despite the progress the industry has made in recent years towards a more consolidated business model, the sector is still afforded comparatively low ratings by the financial markets. We still have to demonstrate that consolidation has progressed enough to have a real benefit in terms of reducing volatility and ensuring sustainability of earnings. Ultimately this will be improved by better management of supply and demand which will further improve through having a more consolidated production base.
Mr Ross explained why, despite ISG being a profitable, well managemed stand-alone business with good growth prospects, the company took the decision to merge with Mittal Steel.
Trying to emulate the global profile and portfolio of Mittal Steel would have taken years, he said. Merging with them on the other hand would enable us to accelerate our long-term strategy and growth plans, enabling our shareholders to benefit immediately from exposure to low-cost, fast-growing developing markets. The merger gave us the opportunity to deliver to our shareholders immediately the business model that we wanted but that otherwise would have taken years for us to achieve.
Mr Ross compared the benefits of a Mittal/Arcelor merger to the Mittal/ISG merger. Combining with Mittal will accomplish Arcelors stated plan in the most efficient way, simultaneously creating a much stronger, more balanced company that should act as the catalyst for a re-rating in the sector.
Mr Ross highlighted that a merger between Mittal and Arcelor would be a very natural combination as there is little geographic or product overlap. I have read various comments about the product mix of the two companies being incompatible but this is not true, he said. We are producing exactly the same steels here in the United States as those Arcelor is producing in Europe. Plus we offer exposure to exciting growth markets where Arcelor has been seeking to expand its own presence.
He concluded by explaining why having a presence in developing markets is important. Steel demand growth is directly linked to economic growth, he explained. Under plausible scenarios of GDP and population growth, the new demand likely to arise from the developing countries over the next 40 50 years should double the global consumption of steel. He highlighted India as a tangible example, which currently has annual per capita steel production of only 40kg, compared with 500kg in Western Europe, 700kg in Japan and 900kg in Korea. The growth opportunity is clear. As a shareholder I certainly want to have access to this growth potential as part of a balanced portfolio of assets in both the developed and developing world, he said. Both Mr Mittal and Mr Dolle have spoken publicly many times on the need for there to be a handful of 100mt plus producers with a global footprint. This is exactly what this transaction would create and overnight.
Mr Ross founded International Steel Group in 2002 after purchasing the assets of Bethlehem, LTV, Weirton, Acme and Georgetown which were in Chapter 11 due to the cyclical downturn of 2001.
ShawCor to provide coating services at new Oregon pipe mill
ShawCor Ltd announced that an agreement has been signed by its Bredero Shaw division to establish a pipe coating facility adjacent to the Oregon Steel Mills large diameter line pipe mill under construction in Portland Oregon.
Bredero Shaw will supply coating services for fusion bond epoxy corrosion coatings and internal linings, in exchange for the exclusive right to provide Oregon Steel with all of its coating requirements at the new pipe mill, the use of land and buildings at the facility and the provision of pipe handling services. The coating line will be installed adjacent to Oregon Steel's new 60 inch API large diameter pipe manufacturing mill that is currently under construction. Oregon Steel has advised that the pipe mill is expected to begin producing pipe in July 2006.
It is expected that there will be a significant increase in large diameter pipeline construction in North America during the next few years and is the reason for this investment.
ShawCor Ltd. is an energy services company specializing in products and services for the pipeline, and pipe services, and petrochemical and industrial segments of the oil and gas industry and other industrial markets. Bredero Shaw is ShawCor's largest division and is the global leader in pipe coating solutions with facilities in fifteen countries. The division provides specialized coating systems and related services for corrosion protection, insulation and weight coating applications on land and marine pipelines including highly engineered corrosion and insulation systems for deepwater applications.
Poltavsky GOKs pellet output reduced in January to February
Ukraine's biggest producer of iron ore pellets Poltavsky GOK has reduced shipments of pellets by 16.5% YOY to 1.08 million tonnes in January to February 2006. Iron ore concentrate production also fell by 2.3% to 1.32 million tonnes.
The production of PGOK was 509,000 tonnes of pellets and 634,000 tonnes of concentrate in February.
Worthington Industries to close Indiana plant
The Columbus based steel processor Worthington Industries will close an Indiana manufacturing plant run by its Dietrich Metal Framing division in LaPorte Indiana by July 2006. The plant processes galvanized steel coils for Dietrich, which makes metal framing for homes and small commercial buildings. The company said Dietrich is switching to a new steel-making method and will no longer need the plant's products.
"We are taking this action to ensure we are providing the best possible materials to our customers, and that we are using our capacity wisely to benefit the company and its shareholders," Mr John P McConnell, chairman and CEO of Worthington Industries, said in a statement.
Worthington Industries has more than 7,500 employees at 64 facilities in 10 countries.
Venezuelan government analyzes synergies with Ternium
It is reported that Venezuela's mining and basic industries minister Mr Vtor varez met with officials from steel group Ternium to evaluate different investment scenarios in the country's steel sector and discussed technical support for the government's proposed new steelmaker. Investments and cooperation through mining development initiatives were also discussed.
Venezuela's new state steelmaker will focus production on thick plates for structures, shipbuilding, railcars and large diameter containers, as well as production of hot-rolled coils for the car, shipbuilding and oil industries.
Techint owned Ternium was formed last year and is made up of steelmakers Siderar of Argentina, Sidor of Venezuela and Mexico's Hylsamex.
AEIF cancels negotiation meetings with AK Steel
It is reported that contract talks between AK Steel officials and members of its union, which were expected to continue yesterday have been cancelled. AK officials were informed through a fax by the Armco Employee Independent Federation that the next phase of negotiations would be postponed.
"Needless to say, we are quite disappointed in this development, and hope that the AEIF will soon agree to return to the table," said Mr Alan McCoy, vice president for government and public relations.
It was not immediately known when contract talks would continue, following a three-day hiatus after AK Steel locked out more than 2,600 AEIF members early Wednesday.
Makiyivka to increase capacity in 2006
It is reported that Ukraines Makeyevka Metallurgical Plant plans to invest more than 677 million hryvni on modernization during 2006 to increase production of finished steel by about 150% to 1.4 million tonnes in 2006, pig iron to 1.3 million tonnes and crude steel to 1.6 million tonnes.
Makeyevka increased production of finished steel by 34% YOY in January to February to 130,000 tonnes. Its production of crude steel increased by 17% to 234,000 tonnes and that of pig iron by 6.8% to 188,000 tonnes.
Makeyevka Metallurgical Plant was set up in 2004 with the assets of the Makeyevka Metallurgical Combine and is a fully integrated iron and steel works. Smart Group, controlled by the Russian businessman Mr Vadim Novinsky, led a campaign to rejuvenate Makeyevka financially.
Peruvian government purchases back Siderperu
It is reported that the Peruvian government took control of Siderperu, by buying 56.04% of Siderperu shares on the Lima Stock Exchange for $53 million following a failed privatization and plans to sell the company again soon.
Peru's government says Siderperu under the control of private investors, who bought the steelmaker in 1996, did not meet investment obligations. Peru's Prime Minister Mr Pedro Pablo Kuczynski said it would begin the new privatization process next week, publishing information about the company.
Siderperu is based in the northern port city of Chimbote and buys iron ore from Peru's only iron miner, Chinese owned Shougang Hierro Peru SA. It supplies Peru's construction and mining industries.
New terminal for iron ore exports in S Jo da Barra
It is reported that iron ore exporters may get a new terminal at sea port in S Jo da Barra in the state of Rio de Janeiro The terminal will have capacity to export 15 million tonnes of iron ore per year and will have a 462 kilometers long ore duct linking it to Minas Gerais where the iron ore mines are located.
The project for the Integrated Logistics Complex for the North of Rio de Janeiro was suggested by the state's governor Mr Rosinha Matheus and by the Energy, Naval Industry and Oil state secretary Mr Wagner Victer, subject to government's approval.
According to the Mr Wagner Victer, the project has environmental and technical licenses from city and state organizations. The project will be executed by a private group named EBX. The construction, to start this year, is evaluated in $ 1.3 billion.
Schnitzer names new Director
Schnitzer Steel Industries Inc announced that its Board of Directors elected Mr William D. Larsson as a director of the Company. Mr Larsson, Senior VP and CFO of Precision Castparts Corp become the Company's eleventh director and sixth independent director under NASDAQ rules. This action fulfills the Company's stated intention to have its board composed of a majority of independent directors.
At the Company's 2006 annual meeting of shareholders held in January, two other independent directors were elected Mr Judith A Johansen CEO of PacifiCorp and Mr Mark L Palmquist, Executive VP & COO of Grains and Foods. The new directors join incumbent independent directors Mr Robert Ball, Mr William Furman and Mr Ralph Shaw.
Schnitzer Steel Industries, Inc. is one of the largest manufacturers and exporters of recycled ferrous metals products in the United States with 35 operating facilities located in 11 states throughout the country and six export facilities located on both the East and West Coasts and in Hawaii.
Fiat and Severstal to boost cooperation
Fiat and Russian steel maker Severstal have agreed to boost strategic co-operation after initial deals were reached earlier this year, Italy's biggest industrial group said on Friday, according to Reuters. "Considering the Russian economy's great potential, the two companies agree to jointly explore feasibility of different projects in Russia in all areas of the Fiat group's industrial activity," Fiat reportedly said in a statement.
Reuters noted that, earlier this year, the two firms struck a deal for Severstal's auto arm in Russia to assemble Fiat's Albea, Palio and Doblo models. Under the deal, Severstal also imports and sells Fiat cars in Russia.
A Severstal executive reportedly said in January that one of the main objectives for buying 70% of Italian steel maker Lucchini was to gain a foothold to sell steel products to Italy's carmakers.
Fortescue presses ahead with plans to raise $2 billion
Fortescue Metals is forging ahead with attempts to raise $2 billion to develop its iron ore mine despite news the corporate regulator has begun legal action against the company and its CEO. The action comes at a crucial time for Fortescue, which is just 12 days away from kicking off a campaign to raise $2 billion from financial markets, through Citigroup.
Fortescue executive director of operations Graeme Rowley said the company was now nearing the end of a 40-day review of its development plan ahead of the raising. "I do not see any reason why the current investigation should impact on the current business."
The Australian Securities and Investments Commission is seeking $3.6 million in civil penalties, including $600,000 from Fortescue's CEO Mr Andrew Forrest. Fortescue announced in 2004 that it had signed binding contracts with three Chinese companies to deliver the infrastructure side of the iron ore project in Western Australia. The lead negotiator for the three groups, China Metallurgical Construction, later denied the agreements were binding.
