April, 26 2006
India's rating outlook raised to Positive by S&P
India's credit outlook was raised to positive from stable by Standard & Poor's because the government is cutting debt and economic growth is accelerating. The shift signals the rating company may raise India's BB+ rating, the highest non-investment grade and the same as Egypt and El Salvador. Tighter tax laws and more foreign investment will help India cut debt, forecast at 90% of 2006 gross domestic product, Standard & Poor's said in a statement.
An upgrade would lower the costs of fundraising for the government and its biggest companies and make Asia's fourth biggest economy more attractive for overseas investors. Typically, an upgrade on the outlook is always followed by an upgrade on the rating.
India's foreign currency rating was raised by Standard & Poor's to BB+ in February last year. The long term local currency rating was left unchanged with a stable outlook at the time. Moody's Investors Service rates India's sovereign at Baa3 or the lowest investment grade. Fitch Ratings places India on the highest level of non investment grade.
Indian government attempts to streamline import of scrap
Indian government has announced that all importers of scrap metal have to register as an overseas supplier for import of metal scrap, other than shredded scrap by the end of this month to the Directorate General of Foreign Trade of the Ministry of Commerce and Industry. The submissions may be made via e-mail, courier or in person. The initial registration will be valid for a period of two years and, in the case of any violation, the supplier will be deregistered. Further, action will be taken against the Indian firm that is importing the scrap under the Foreign Trade Act, 1992.
It appears to be that pre shipment inspection will no longer be required. It is important to note that while the effective date of the new program is April 1, 2006, until June 30, 2006 imports will also be allowed on the basis of the pre shipment inspection certificate regime in place since 2005.
Scrap metal grades that will be free subject to certain conditions include waste and scrap of cast iron (72041000), other (72042190), high speed steel (72042920), other (72042990), waste and scrap of tinned iron or steel (72043000), turnings, shavings, chips, milling waste, saw dust, fillings, trimmings and stampings, whether or not in bundles (72044100), other(72044900), remelting scrap ingots (72045000), copper scrap (74040010), brass scrap (74040022), nickel scrap (75030010), aluminium scrap (76020010), zinc scrap (79020010), tin scrap (80020010) and magnesium scrap (81042010).
The import of scrap would take place only through Chennai, Cochin, Ennore, Nhava Sheva, Kandla, Mormugao, Mumbai, New Mangalore, Paradip, Tuticorin, Vishakhapatnam, ICD Tughlakabad, Pipava, Mundra, Kolkata, ICD Ludhiana, ICD Dadri, ICD Nagpur, ICD Jodhpur, ICD Jaipur, ICD Udaipur, CFS Mulund, ICD Kanpur, ICD Ahmedabad, ICD Pitampur and ICD Malanpur and no exceptions would be allowed.
Essar to start construction on Orissa steel project by monsoon
Essar Steel announced today that it would start the construction work on the Rs 10,700 crore steel plant in Orissa before the monsoon, discounting reports that it was backing out from the Orissa project, due to delay in land acquisition. Mr Bikram Mohanty GM corporate affairs said "The Company expects to start its construction work on a four million tonne steel project before the onset of the monsoon. It has already deposited requisite administrative charges with the Infrastructure Development Corporation of Orissa to acquire required land."
Mr Mohanty said "The land acquisition process is going on very well with adequate support from IDCO and the district administration of Jagatsinghpur. The project using blast furnace route is expected to be commissioned by five years time."
The proposed plant would be set up in the port town of Paradip, for which the company had already identified over 2,000 acres near the erstwhile Oswal fertilizer plant, he said in a statement.
Kotak & SBI Caps to advice on NMDC stake sale
Indian government has appointed Kotak Securities and SBI Capital Markets to manage a sale of 15% shares of National Mineral Development Corp through a public offer of shares, which would be worth about .3 billion at its current share price.
Kotak and SBI Cap will start the work soon and will advise government on all issues relating to the sale of shares.
BSP develops thick web rails for Indian Railways
Steel Authority of India Limiteds Bhilai Steel Plant has developed asymmetric thick web rails for Indian Railways. Thick web asymmetric rails are used in switches of high speed and heavy haulage tracks which cater to the needs of the freight corridor. Indian Railways were importing thick web asymmetric profile, which is produced by a few rail manufacturers in the world. But now it will be able to speed up its modernization process with indigenous asymmetric thick-web rails.
BSP took only four months for the trial production of one of the toughest rolled profiles.
BSSL plans power plant near Mumbai
Bhushan Steel & Strips Limited is reported to be planning to set up a gas powered 200MW power plant near its steel plant at Khopoli and is already in talks with Gas Authority of India Limited for supply of gas, which is considering the proposal. BSSL Director Finance Mr Nittin Johari told Mumbai Mirror that they are also approaching other gas supplying firms for a gas supply tie up as the whole project depends on the availability of gas in an area which is expecting the implementation of the Hazira-Dabhol Pipeline by 2008.
Mr Johari informed that the proposed power plant will require an investment of Rs 600-650 crore and only 25 acres of land out of existing land at Khopoli. He added that it will take two years to commission the electricity plant.
BSSL which already has 48 MW captive power plants at its two factories is also setting up a 110 MW coal-based power plant at Angul in Orissa and expects to commission it in October this year.
ADB to lend $7.3 billion in 3 years to India
Indias finance minister Mr P Chidambaram said that the Asian Development Bank will double its annual assistance for India to over $2 billion and is expected to lend India $7.3 billion in next three years. Mr Chidambaram said There was some improvement in disbursement of ADB loan to India from 12 to 16% in 05 and expected it to go up to 20% this year. Government will approach the bank for more assistance to infrastructure depending on the absorptive capacity and fiscal responsibility and budgetary management limitations of states, he added.
ADB plans to give a second loan to Indian Railways to carry out reforms and investments for improving efficiency, safety and capacity building in 2007.
Transport projects account for 36% of ADBs 2006-08 assistance program and ADB is now in discussion with government to help two projects National Highway Public Private Partnership Project 2006 and National Highway PPP II project 2008.
With energy demand expected to rise in India, ADB would help strengthen the national transmission grid and other critical investment needs. ADB is likely to extend loans to the Power Grid Corp Transmission II Project in2007 while the second phase of support to Madhya Pradesh and Assam power sector reforms is expected in 2008.
SAIL invites EoI for sale of Kulti Works
Steel Authority of India Ltd has invited expressions of interest from private companies, both national and international, to sell the plant, machinery and land of century old Kulti Works of Indian Iron and Steel Company. SAIL has appointed SBI Capital Markets to advise it on the sale process. After the EoIs are submitted, preliminary data will be circulated among interested parties. They will then carry out the due diligence. Following this, the final price bids will be called.
Kulti Works was set up in 1870 as Bengal Iron Works Company. It became part of Indian Iron & Steel Co in 1936.Kulti was closed on April 1, 2003 as IISCO decided not to make any fresh investment to revive the loss making unit. It used to produce cast iron and spun pipes. During the British rule the entire land for Kulti Works was leased out to IISCO for 999 years. Later the lease was transferred to the Bengal government. It is reported that the state has given SAIL the authority to transfer the land to the successful bidder but with the rider that the new owner has to build up an industry there.
The total area of Kulti Works is around 850 acres, which includes a sprawling colony of 2,300 residential units, a 9-hole golf course and a club. While more than two-third of the land is unencumbered, the plant is located on 228 acres. The successful buyer will have the option to develop any industry of his choice. However, the land cannot be used for real estate development.
Pipavav Shipyard takes SembCorp as strategic partner
Sea King Infrastructure Ltd and IL&FS, the promoters of the Pipavav Shipyard project have taken in Singapore government company SembCorp one of the top global shipbuilding and ship repair firms, as a strategic partner for the Rs 4,500 crore facility. SKIL is also reported to close to a deal with a European investor, who is likely to pick up close to 10% stake in the shipyard. IL&FS and other financial institutions, including the EXIM Bank of India have a majority 5% stake in Pipavav Shipyard while SKIL owns 49%.
Pipavav Shipyard is expected to be in the league of Damen of Holland, Aker Masa in Finland and Izhar of Spain. It is projected to have the capacity to manufacture ultra large crude carriers of 1 million DWT and containerships of 10,000 TEUs. The company also has plans to build LNG and LPG carriers and chemical tankers after the work commences.
Royal Haskoning from the Netherlands and Appledoor of UK have already finalized the design for the shipyard. Construction work for the first phase is likely to begin soon and be completed within 23 months. This may require an investment of close to Rs 1,000 crore. In this phase of construction, the wet basins in Pipavav will be converted into dry docks. The larger dry dock would be 65 meter wide and 490 meter long having 14 meter depth, while the second would be 60 meter wide and 350 meter long.
The company also has plans for building a massive ship repair facility at the same location. Gujarat has immense potential for ship repair business, since there is no such facility between Dubai and Singapore at present.
Secondhand capital goods imports without license
The government had, in the recent Annual Supplement to the Foreign Trade Policy placed remanufactured goods in the restricted list. However, the nature of remanufactured goods had not been defined. Therefore, the customs authorities insisted upon a license for even second hand capital goods imports on the ground that they were remanufactured goods.
The trade and industry recently took up the issue with the Directorate-General of Foreign Trade which has now clarified through a circular that second-hand capital goods are freely importable without a specific license.
To facilitate clearance of second hand capital goods under free category, the DGFT has said that a declaration by the importer at the time of clearance that the capital goods imported are second hand capital goods and do not fall under the category of remanufactured capital goods may be accepted by the Customs authorities.
Indian Railway freight earnings up by 17.9% in 2005-06
Indian Railways has earned Rs 35,971.17 crore from freight traffic during 2005-06, as against Rs 30,489.23 crore during 2004-05, registering an increase of 17.98%. Railways carried 667.39 million tonnes of freight traffic during 2005-06 as compared to 602.78 million tonnes in 2004-05 an increase of 10.72%.
Railways hauled 66.19 million tonnes of freight traffic during March 2006 as compared to 59.52 million tonnes during March 2005 registering an increase of 11.21% and its revenue earnings from freight traffic were Rs 3,550.46 crore as compared to Rs 3,120.44 crore during March 2005 an increase of 13.78%. Of the total earnings in March 2006, Rs 1,322.15 crore came from carrying 28.01 million tonnes of coal.
Mahindra Ugine net profit up in Q4
Mahindra Ugine Steel has announced that its Q4 net profit is up at Rs 35.1 crore from Rs 15.1 crore. Its Q4 net sales are up at Rs 185.9 crore as against Rs 152.5 crore. Its Q4 operating profit margin is also up by 30.1% from 19.2%.
TopGodawari Power & Ispat to list on April 25
The equity shares of Godawari Power & Ispat Ltd shall be listed and admitted to dealings on the National Stock Exchange on April 25, 2006. The trading shall be in the Normal Market Segment - Compulsory Demat (Rolling Settlement) for all investors.
In BSE, Godawari Power & Ispat Ltd will be admitted to dealings on the Exchange in the list of B1 Group Securities from April 25, 2006.
Wuhan Steel raises flag on earnings in 2006
China's third largest steel maker Wuhan Steel warned that its first half earnings may fall by at least 50% from 3.15 billion yuan ($393 million) in the same period of last year, after an 84% drop in first quarter profit due to higher iron ore costs and loss making margins on its main steel products. Profit margins for hot rolled and cold rolled steel products fell into negative territory. Wuhan Steel forecast its 2006 revenue would fall 7% to 38 billion yuan, from 41 billion yuan in 2005.
Its net profit slid by 84% to 247 million yuan in the January to March quarter, from 1.55 billion in the same period of 2005, due to negative margins of almost 5% on its hot band products and negative 2% margins on its cold rolled products. Turnover dropped by 21% to 8.29 billion yuan. Domestic steel prices slumped through the rest of 2005, due to competition from expanded capacity, in particular for hot-rolled steel. Wuhan Steel had enjoyed 26% margins on hot rolled products and 23% margins on cold-rolled products in the first quarter of 2005.
Wuhan plans to expand capacity to 15 million tonnes by 2010, compared with output of 10.38 million tonnes in 2005. It produced 2.53 million tonnes of crude steel in the first quarter. "We expect China's steel consumption has yet to reach its peak," Wuhan Steel said in its results report.
"Our company will face the dual pressures of lower steel prices and rising costs of iron ore," it said in a results statement published in the official China Securities Journal. The pessimistic outlook for the first half comes after a strong 2005. A larger asset base helped boost net profit for the full year by more than 50% to 4.8 billion yuan.
Arcelor and Mitsui join to set up service center in Durban SA
Arcelor SSC and Mitsui & Co UK signed an agreement for setting up of a auto industry focused steel service center in South Africa The new company called AMSA Steel Service Centre Pty Ltd will be owned 65% by Arcelor and 35% by Mitsui. The steel service center will be located in the Durban area and is to start operations in the second quarter of 2007. It is to process 120,000 tons of slit products, rectangular and shaped blanks per year. AMSA will provide storage and services such as just in time delivery to its automotive customers.
Arcelors senior Executive VP Mr Gonzalo Urquijo said "As the number one steel partner of the global automotive industry we accompany our customers in their global development, providing them with the highest level of performance everywhere around the world. Through this cooperation with Mitsui, our customers will benefit of the combined experiences and best practices of Arcelor and Mitsui in the processing and distribution of steel".
Mr Ken Abe Senior Executive VP of Mitsui and MD of Mitsui & Co. Europe Plc said "We already have a strong presence in South Africa, where the automotive sector is set for rapid growth, and we are very happy to establish this partnership for our automotive customers with Arcelor in this country."
Peabody & Shenhua sign MoU for strategic cooperation
Chinese Shenhua Group Corporation Limited and USs Peabody Energy today announced that the two companies have signed a MoU to pursue business development opportunities of mutual interest. The agreement formalizes the parties' mutual interest in working together in coal and coal related projects and initiatives. In coming months, the companies intend to identify specific projects for cooperation, including possible development of coal projects both in and outside of China and the exchange of best practices.
Peabodys CEO Mr Gregory H Boyce said "This is a very positive first step in advancing a strategic alliance between the world's largest coal company and the leading coal-based energy company in China. Since opening our Beijing office last summer, we have initiated discussions with a number of top-tier companies and are pleased to be moving our activities to the next level."
Shenhua Group Corporation is the wholly state owned parent company of the Hong Kong listed China Shenhua Energy Company Limited.
Peabody Energy is the world's largest private sector coal company, with 2005 sales of 240 million tons of coal and $4.6 billion in revenues. Its coal products fuel approximately 10% of all US and 3% of worldwide electricity.
Rautaruukki to divest its Nordic reinforcing steel business
Rautaruukki has signed an agreement to sell its Nordic reinforcing steel business to BT Norway AS, a 100% subsidiary of Bosian Time SL. The price for the shares is Euro 123 million including a pre closing dividend to Rautaruukki. The price will be adjusted based on the accounts at closing. The transaction will be executed as a sale of shares. The price equals approximately the book value of the divested companies and therefore the effect of the transaction is expected to be neutral to Rautaruukki's consolidated financials. The transaction is subject to relevant regulatory approvals and it is expected to close by June 30, 2006.
The Nordic reinforcing steel business comprises Fundia Armeringsst AS operating steel and rolling mills in Mo Rana, Norway and distribution and manufacturing service companies Fundia Betoniterset Oy in Finland, Fundia Armering AB in Sweden, Fundia Armering AS in Norway and Fundia Armering A/S in Denmark. The business has been reported as a part of Ruukki Metals division. In 2005, the Nordic Reinforcing business generated net sales and EBIT of Euro 328 million and Euro 30 million respectively.
Mr Sakari Tamminen President and CEO of Rautaruukki Corporation said "The divestiture will clarify our corporate structure and will complete the arrangements started last year to exit from long steel products. Reinforcing steel operations serve construction industry though there are no substantial operational synergies in production or sales with our construction business. We continue to focus on value-added products and solutions in the growing markets of Central Eastern Europe, Russia and Ukraine."
Bosian Time SL, is an investment vehicle wholly owned by Mr Francesc Rubiralta Rubi whose family are the controlling shareholders of Celsa Group, a group of leading steel long products producers in Spain, Poland and the UK. Bosian Time is independently incorporated and separately financed from the Celsa Group.
Inco forecasts Nickel deficit in 2006
Canadian mining group Inco has forecast a 10,000 tonnes worldwide deficit of nickel in 2006 compared with an 11,000 tonnes surplus in 2005 and a 6,000 tonnes surplus in 2004. Mr Peter Goudie Inco's executive VP of marketing said that there was more than speculation to firmer nickel prices, noting that it was the third time in three years that nickel had risen above $17,000 per MT. He estimated world production and supply at 1.339 million tonnes in 2006 and world demand at 1.349 million tonnes compared with 2005 production & supply of 1.289 million tonnes and demand of 1.278 million tonnes.
He said the main factors behind higher prices were the stronger than expected rebound in global stainless production, a tightening scrap market, strong non stainless growth, limited nickel supply growth and low inventories.
He noted that London Metal Exchange inventories had declined from a peak since February by 23% to around 28,000 tonnes.
Mr Goudie estimated that global Q1 stainless steel production had risen by 11% from Q4 2005 levels, representing an increase of 600,000 tonnes. China has registered a 19% increase, while the US had seen a 12% rise and Western Europe recorded a 13% gain. South Korea and Taiwan both saw 5% increases, while the Japanese industry achieved a 3% growth in stainless steel output.
He estimated that nickel demand from the global stainless steel industry had risen by 13% in Q1 2006 compared with Q4 2005, adding that in addition to increased output, this was also helped by a higher austenitic ratio and lower scrap ratio. Mr Goudie said that austenitic ratios had moved higher since bottoming in Q3 2005 and Inco estimated austenitic ratios at around 76% for Q1 2006 up from 75.5% in Q4 2005 and 73.2% in Q3 2005. As a result of higher prices, the scrap ratios in stainless steel have fallen to an estimated 47% in Q1 2006 from 48.2% in Q4 2005 and a recent peak of 52% in Q3 2005.
Meanwhile, world non-stainless demand for nickel is showing steady growth and Goudie forecast a 6% increase in 2006 to 525,000 mt from 500,000 mt in 2005. Growth was strong in high nickel alloys, used in aerospace, industrial gas turbines, energy applications and in the gas containment systems for ocean-going liquefied natural gas carriers. Other products, such as batteries in hybrid electric vehicles, batteries in the electronics industry and metallurgical powders were also showing strong demand for nickel, Goudie said.
He said that nickel production gains would be limited in 2006 as the industry was already running at capacity. Mr Goudie also noted that the threat of strikes and slow restarts, feed shortages, extended maintenance, inclement weather and ramp-up delays could curb production.
ThyssenKrupp to raise steel prices on July 1
ThyssenKrupp AG is planning to raise flat-carbon steel prices on July 1, by 50 euro per tonne from 30 euro previously, a spokesman said.
The steel maker also hiked prices at the beginning of the second quarter to pass on increased energy and raw material prices to customers. Last year, steel prices were under pressure as customers had accumulated high inventories. According to the company, these inventories have now declined.
US Steel Q 1 profit down due to flat products
United States Steel Corp announced that first quarter profit dropped as income fell sharply in its flat rolled products segment. In its earnings release, US Steel said net earnings were $256 million as compared with $459 million in the same quarter of 2005. Net sales dropped to $3.73 billion from $3.79 billion. But now its main US blast furnace is back up after rebuilding, the company said it sees second quarter production in its flat-rolled business rising and European shipments improving.
In the first quarter, the flat rolled business benefited from lower natural gas costs and reduced outage costs as the Gary No. 14 blast furnace started up successfully. US Steel said it expects flat rolled results to improve in the second quarter from the first quarter as volumes increase and prices and costs remain flat. US Steel Europe will see improving shipments partly offset by higher costs, with roughly flat average prices.
Mr John Surma chairman and CEO said "We benefited from a positive global economic market and there is a positive environment at least through mid-year. We intend to operate as near to full capacity as we can in the second quarter." Mr Surma said that the order books were almost full for US Steel's major customers in automotive, appliances and construction segments while low inventories at service centers, were a sign of a strong market.
BHPB Q3 iron ore & coal output falls by 5%
BHP Billiton, the world's biggest mining company, said cyclones and maintenance work cut third quarter iron ore output by 5% at its mines in West Australia. Iron ore output fell to 22.5 million tons in the three months ended March 31, from 23.8 million tons.
BHP, which is spending $1.8 billion to expand its iron ore operations, is suffering output losses amid surging demand from China, which has led to record prices.
It is reported that output of coking coal also fell by 5% as reserves were depleted at a mine in north-eastern Australia.
Mittal Steel Cleveland opens new HDG line
Mittal Steel USs Cleveland plant has started producing galvanized steel on Tuesday. The investment is reported to be $70 million. The plant will make 700,000 tons of hot dipped galvanized steel per annum.
Mr Michael G Rippey, Mittal Steel USs executive VP said "With this new line, we will be better positioned to serve customers in the automotive industry as well as other markets that demand the most advanced, high-quality, corrosion-resistant steel."
AK Steel to increase spot prices for carbon steel products
AK Steel announced that it would increase spot market prices for carbon steel products by $50 per ton for all new orders accepted for shipment on May 15, 2006 and later.
The company noted that the price increase was in response to an increased demand for carbon steel products, and the need to recover higher costs for steelmaking inputs.
Grupo Simecs sales up by 208% in Q1 of 2006
Mexican Grupo Simec SA de CV announced its results of operations for the quarter ending March 31, 2006. Net sales increased by 208% to Ps 5,612 million as compared to Ps 1,824 million in the same period of 2005, due to the inclusion of net sales of Ps. 4,067 million generated by the newly acquired plants of PAV Republic Inc in July 2005. Simec recorded net income of Ps. 442 million in the first three months of 2006, versus net income of Ps 332 million in the first three months of 2005.
Simec sold 680,602 metric tons of basic steel products during the quarter including 436,999 metric tons sold by plant of Republic an increase of 176% as compared to 246,202 metric tons in the same period of 2005. Exports of basic steel products were 467,729 tons including 436,999 metric tons sold by the newly acquired plants of Republic versus 36,796 metric tons in the same period of 2005. Additionally, Simec sold 1,290 metric tons of billets in the quarter as compared to 12,870 metric tons of billet in the same period of 2005.
Simec and its parent company Industrias CH SA de CV acquired 100% of the stock of Republic. Simec, ICH's largest subsidiary, acquired 50.2% of Republic's stock and ICH purchased the remaining 49.8% on July 22nd 2005. The cash purchase price of $229 million was financed by internally generated funds. Republic is the leading producer of special bar quality steel in the United States and together with Simec, is the largest producer of this kind of steel in North America.
Simec is a mini-mill steel producer in Mexico and manufactures a broad range of long structural steel products. Its subsidiary Republic is the leading producer of special bar quality steel in the United States.
Steel recycling in US up by 75.7% in 2005
The Steel Recycling Institute announced that the recycling rate for the world's and the US's most recycled material steel increased to 75.7% in the US in 2005. This reflects a five percentage point increase in the recycling rate and the highest rate ever recorded in the US. 76 million tons of domestic steel scrap was charged into furnaces, both in the U.S and abroad, to make new steel products.
Mr Bill Heenan president of the Steel Recycling Institute said "2005 continues the four year expansion of steel recycling to new historic levels in the US and the 75.7% rate established a new record for steel recycling. It is important to point out that the number one raw material consumed by the steel industry is steel scrap."
Kobe Steel to increase CAPEX by 77%in 2006 fiscal
Kobe Steel Ltd announced its plans to increase investment by 77% during this fiscal year fiscal 2006 ending March 31 2007 by allocating an Y110 billion CAPEX up by 77% from the estimated 62 billion yen in fiscal 2005. Most of the investments will be in the Iron & Steel segment and the Aluminum and Copper segment. The projects are focused on remodeling a blast furnace for the stable production of steel products and improving the manufacturing capabilities. Other investments will cover labor savings and necessary repairs and maintenance work.
Investments by segment in fiscal 2006 as compared to fiscal 2005 estimates are Y84 billion for iron & steel as against Y43 billion, Y14 billion for aluminum & copper as against Y10 billion and Y12 billion for others as against Y9 billion.
The main projects in iron & steel for fiscal 2006 include refurbishing of BF 2 at Kakogawa Works, during September 2004-March 2007, for which Y35 billion will be spent out of total investment of Y40 billion, new construction of No 5 continuous caster at Kobe Works, during April 2004 August 2006, for production of specialty steel, for which Y3.9 billion will be spent as against total investment of Y8.5 billion, upgrading of bar mill at Kobe Works to improve product quality and inspection for specialty steel, during November 2005 - March 2007 at investment of Y 1 billion.
Kobe Steel is one of the leading steelmakers and producers of aluminum and copper products in Japan. Other businesses include wholesale power supply, construction machinery, real estate, and electronic materials.
Falconbridge Q1 profit up by 163%
Canadian copper and nickel producer being acquired by rival Inco Ltd, Falconbridge Ltd said that first quarter profit more than doubled on higher prices and production. Net income rose to $462 million from $176 million a year ago. Sales rose 51% to $2.86 billion.
CEO Mr Derek Pannell said Metals prices continued to climb and overall, our operations have performed well. As we move into the second quarter, we look forward to benefiting from further upside at our operations and from the higher metal-price environment.''
Inco seeks to acquire Falconbridge for C$15.6 billion ($13.7 billion) to surpass Russia's OAO GMK Norilsk Nickel as the world's largest nickel producer. The takeover requires approval from US and European competition authorities, which are reviewing the transaction.
Rautaruukki to purchase color coating line in Ukraine
Rautaruukki Corporation has agreed to purchase the Ukrainian company AZST-Kolor CJSC. AZST Kolor owns a colour coating production line in Antratsit, eastern Ukraine, and its coated products meet Ruukki's construction needs. The price for the production line is Euro 4.5 million, plus the company's cash funds when the transaction is completed, an estimated Euro 0.45 million. The company is free of debt. The transaction still requires the approval of competition authorities. The transaction is expected to be completed in May 2006.
The production line was made by the Italian company Fata and has an annual color coating capacity of 80 000 tonnes. At present the line is not in operation but Ruukki estimates that it will start up the line in July and that this should reach maximum capacity in two years.
The purchase of AZST-Kolorin serves Ruukki's construction customers in the growing market in central Eastern Europe, Russia and Ukraine. Color coated sheet steel is used in construction as the outer material in sandwich elements. It is also used in roofing and as the cladding material for example in facades. With this acquisition Ruukki is ensuring delivery accuracy and the availability of high quality raw materials on competitive terms in its growing core market.
Ruukki supplies metal-based components, systems and integrated systems to the construction and mechanical engineering industries. The company has a wide selection of metal products and services. Ruukki has operations in 23 countries and employs 12,000 people. Net sales in 2005 totaled Euro 3.7 billion. The Corporation has used the marketing name Ruukki since 2004.
Lone Star Technologies Reports First Quarter 2006 Earnings
Lone Star Technologies Inc has reported record quarterly pretax income of $65.1 million for the first quarter of 2006. This compared to pretax income for the first quarter of 2005 of $40.6 million and the fourth quarter of 2005 of $60.1 million, an increase of 60% and 8%, respectively. Lone Star also reported quarterly net income of $41.3 million as compared to net income for the first quarter of 2005 of $38.9 million.
Total revenues were up 4% to $350.9 million in the first quarter of 2006 from the fourth quarter of 2005. Oilfield revenues increased 8% from the fourth quarter of 2005 to $285.1 million on a 13% increase in shipment volumes partially offset by a 4% decline in average selling prices. Average selling prices decreased in part due to increased sales of lower priced carbon grade OCTG which comprised 32% of total OCTG revenues in the first quarter of 2006 compared to 26% in the fourth quarter of 2005. First quarter 2006 revenues from specialty tubing were down 3% from the fourth quarter of 2005 to $43.6 million on 7% lower average selling prices and 4% increased shipment volumes.
Mr Rhys J Best, Lone Star's Chairman and CEO said "Our first quarter performance reflects the continued strength in demand we are experiencing for our premium oilfield products. Given industry projections of continued expansion in unconventional land based gas drilling as well as expected improvement in Gulf of Mexico activity in the second half of the year, we anticipate that strong customer demand for our key products will continue. Lone Star's unparalleled product sourcing flexibility combined with our broad product range and strategic manufacturing alliances will allow us to respond with speed and efficiency to meet the evolving needs of our customers."
Lone Star Technologies Inc's principal operating subsidiaries manufacture, market and provide custom services related to oilfield casing, tubing, couplings and line pipe, specialty tubing products used in a variety of applications, and flat rolled steel and other tubular products.
AK Steel reports Q1 results
AK Steel has reported net income of $6.2 million for the first quarter of 2006. Net sales were $1.435 billion on shipments of 1.526 million tons a 1% increase in revenues on slightly higher shipments from the year ago quarter. AK Steel said that its first quarter 2006 operating profit was $29.4 million or $19 per ton as compared to $113.6 million or $75 per ton, for the first quarter of 2005.
The company said its average selling price reached a quarterly record of $940 per ton in the first quarter of 2006 up from $934 per ton in the first quarter of 2005 and significantly higher than the $860 per ton average in the fourth quarter of 2005. The higher average selling price resulted primarily from the realization of price increases negotiated with the companys contract customers and a more favorable product sales mix.
Mr James L Wainscott chairman, president and CEO said Our 2006 first quarter was remarkable given the outstanding performance of our largest and most complex plant, Middletown Works, under the most difficult of circumstances. Middletowns efforts were bolstered by record safety, productivity and quality elsewhere throughout the company. We enjoyed record quarterly sales of specialty stainless and electrical steel products, and we are quickly expanding our capacity to meet strong demand for those products.
AK Steel said that it expects to report improved second quarter of 2006 results as compared to the first quarter of 2006. Second quarter shipments are expected to be between 1.575 million tonnes and 1.6 million tons. Compared to the first quarter, the company expects steelmaking input costs to be relatively flat in the second quarter, with lower natural gas costs offset by increased costs for raw materials.
EBX to shift pig iron furnaces to Brazil
EBX Group plans to move two pig iron blast furnaces to Brazil after Bolivian President Mr Evo Morales ordered the company to leave the country. EBX founder and Chairman Mr Eike Batista said that EBX will dismantle its equipment in Puerto Suarez, a city along Bolivia's eastern frontier with Brazil and transport it across the border to the Brazilian state of Mato Grosso do Sul.
Mr Batista said in an interview at EBX headquarters in Rio de Janeiro. This project was always envisioned as a cross- border project so now we'll just build it all on the Brazilian side.'' EBX spent about $50 million, or a third of its planned Bolivian investment, so far and will lose about $20 million in fixed infrastructure investments as a result of the move Mr Batista said. The move will also delay start up of the planned pig iron operation by about a year. Mr Batista had originally planned to have four blast furnaces in operation by the end of 2006 and produce as much as 800,000 metric tons of pig iron a year starting in 2007.
Mr Morales, who won election in December on promises to take greater control of Bolivian resources, said last week he was kicking EBX out of the country because the company was operating the plant without proper environmental licenses. Bur Mr Batista said that EBX has not begun operations at the plant and said it has all the necessary permits.
Steel Technologies Q1 profit falls
Steel Technologies Inc reported that its net earnings from continuing operations for the second fiscal quarter were $2.3 million down from $14.3 million a year earlier as sales fell to $238.3 million from $275.3 million.
Last month, the Louisville, Kentucky-based company warned that earnings would be well below Wall Street expectations, but its sales outlook was roughly in line with forecasts.
Mr Douglas Mathew new GD of US Steel Serbia
It is reported that Mr Douglas Mathews has been named the new GD of US Steel Serbia. Former GD Mr Michael Fedorenko has been named GM of the Granite City Works in the US. Mr Mathews comes to Serbia from the position of GM of engineering and technology at the companys main headquarters in Pittsburgh.
US Steel President John Surma said Mathews previous position as general manager and his operative skills and administration experience which he possesses makes him the right person for this challenge and the important task of administrative orders in Serbia.
Maverick Tube reports record Q1 results
Maverick Tube Corporation reported record net income for the first quarter of $70.9 million as compared to net income for the same quarter last year of $31.2 million and net income of $63.2 million for the fourth quarter 2005. Net revenues were a record $543.1 million up from net revenues of $410.8 million for the first quarter 2005 and $484.7 million for the fourth quarter 2005.
First quarter 2006 energy products net revenues increased 39.6% to $465.6 million from $333.6 million in the first quarter 2005 and 13.6% from $409.7 million in the fourth quarter 2005. The 13.6% increase in net revenues of energy products over last quarter is attributable to a 13.6% increase in tons shipped as average selling prices remained constant during both periods. Maverick's operating margin improved to 20.6% in the first quarter 2006 compared to 12.1% in the first quarter 2005 and 20.3% in the fourth quarter 2005.
First quarter 2006 electrical products net revenues were $77.4 million compared to $77.2 million in the first quarter 2005 and $75.0 million in the fourth quarter of 2005. The 3.2% increase in net revenues over the fourth quarter 2005 is attributable to an 11.8% increase in volume to about 62,800 tons partially offset by lower selling prices.
Mr C Robert Bunch Chairman, President and CEO said "We are very pleased with the contributions of all of our business units to this quarter's record results. In particular, we had especially strong performances by Maverick Tubular Products, our US OCTG and line pipe business, as well as TuboCaribe, our Latin American OCTG business, and Precision Tube, our coiled tubing business. In addition, Prudential, our Canadian OCTG and line pipe business, had another outstanding quarter. Canadian energy activity was the driver for about 37% of our consolidated net revenues this quarter. Our electrical products segment performed in line with expectations.
Maverick Tube Corporation is a St Louis Missouri based manufacturer of tubular products in the energy industry for exploration, production, and transmission, as well as industrial tubing products steel electrical conduit, standard pipe, pipe piling, and mechanical tubing used in various applications.
Israels Yehuda Nets buys Solel Boneh steel plant
It is reported in a local daily Globes' that Yehuda Nets Fencing Enterprises Ltd, a subsidiary of South Africas Cape Gate , has acquired Solel Boneh Building and Infrastructure Ltd. steel processing plant in Holon. Yehuda Nets bought the plants production facilities and inventory but not the land. Industry sources estimate the price of the acquisition at NIS 3 million. The plant will be renamed Noam under its new ownership, which will come into effect on May 1.
The plant processes steel for construction and has been in operation for 25 years.
Yehuda Nets CEO Mr Moshe Cohen told Globes that he would move the plant to the Noam industrial zone in Netivot in the western Negev this year. The Manufacturers Association of Israel plans to move 60 enterprises to this industrial zone under preferential terms. Yehuda Nets has already been allocated a site for its plant.
Two years ago, Yehuda Nets bought the Yitzhak Land steel plant in Netanya. The company will own nine steel plants following its latest acquisition.
Jewish South African businessman Mr Mendel Kaplan owns Cape Gate.
Russia could Support Elga Coal Mine Project
It is reported that a Japanese delegation from public and private enterprises visited Moscow to talk with Russian officials on Elga coal mine development, which is large scale coking coal project for next generation.
Japanese said the project is important for Japanese steel makers and the government to secure resources stably while Russia Federation government showed positive sign to support the project. The project, of which private developer will be fixed, is likely to go ahead with indirect support by governments of Russia and Japan.
DMCI approves sale of part stake in Semirara Mining
Manila based DMCI Holdings Incs board has approved the sale of 16.5 million common shares of Semirara Mining Corp. DMCI didn't provide details of the planned stock sale such as the selling price, the buyer of the shares and the timetable for the sale.
As of end 2005, DMCI owned 178.1 million common shares of Semirara, equivalent to a 60% stake in the coal mining concern.
PGOK iron ore pellet sales down by 11% in Q1
Ukraine's biggest producer of iron ore pellets Poltavsky GOK has reduced shipments of commercial pellets in Q1 of 2006 by 11.1% YOY to 1.84 million tonnes. PGOK produced 1.71 million tonnes of pellets in the quarter.
PGOKs production of pallets in March was 629,900 tonnes and sales amounted to 769.800 tonnes.
High potential for large diameter pipes production in Iran
Mr Mohammad Sardarnia CEO of Mahshahr Pipe Production Plant said that due to the recent developments in Irans pipe producing plants, Iran has gained a special foothold in the international markets in comparison with other countries in the Middle East in this segment with capacity of producing one million tons of direct welded pipes per year as well as some 200,000 tons of spiral pipes.
In spite of Irans huge oil and gas reserves, the large diameter steel pipes industry in Iran has started developing only after the Islamic Revolution in Iran he said. And now no serious problems are being faced by the domestic industry due to supportive laws and regulations.
