October, 21 2006
Mr Ratan Tata to chair merged Tata Corus
TATA Sons chairman Mr Ratan Tata will be at the chairman of the merged entity and Mr Jim Leng chairman of Corus will be its deputy chairman. Mr Philippe Varin CEO of Corus will be deputy MD.
As per reports, Mr Jacques Schraven non executive deputy chairman of Corus, Dr Anthony Hayward senior independent director of Corus will join the TATA Steel board while Mr B Muthuraman MD of TATA Steel, Mr Ishaat Hussain and Mr Arun Gandhi would be on the Corus board.
Mr B Muthuraman MD of TATA Steel during a press conference said that there will be no change in Corus management and an integration committee will be put in place.
TATA Corus to produce 40 million tonnes by 2011-12
Mr B Muthuraman MD of TATA Steel during a press meet in London announced that the new combined entity of TATA Steel & Corus would have a capacity of 40 million tonne by 2011-12 with a turnover of $32 billion and EBIDTA margin of 25%.
Mr B Muthuraman also discussed the six pronged strategy outlined by TATA Steel in 2003 where the target was to increase capacity from 4 million tonne then to 30 million tonne by 2015. Mr Muthuraman said that they were looking at companies in iron ore rich countries like Bangladesh and Iran and the joint venture with Bluescope was part of the overseas branding strategy.
Mr Muthuraman further said that the first phase of the 3 million tonne Orissa project would be completed by 2009 and that the capacity of the Jamshedpur plant would be 10 million tonne by 2010.
JSW Steel sees stable steel prices
JSW Steel Ltd in an outlook announcement to BSE has informed that it sees stable domestic steel prices as the Indian economy is picking up speed to accelerate the growth momentum and the manufacturing sector in the last quarter showed a robust growth of over 11%.
JSW said that The steel prices have shown some weakness in the last few weeks due to increased volume of exports from China. The strong demand from other geographies, namely; Russia, India and Middle East is cushioning this impact bringing stability in prices. In this scenario, the prices are expected to be stable barring short term corrections.
CILs subsidiary CCL to produce 42 million tonne sin 2006-07
Coal India Limiteds subsidiary Central Coalfields Ltd has produced 40.513 million tonnes of coal during 2005-06 up by 8.4% as compared to 37.39 million tonnes in 2004-05. CCL earned a record profit of Rs.1164.98 crore during 2005-06 as against Rs.437.81 crore during 2004-05. Over burden removal during 2005-06 was 49.97 million cubic meters as compared to 46.68 million cubic meters in 2004-05. Coal off take during 2005-06 was 38.62 million tonnes an increase of 2.73 million tonnes over 2004-05.
CCL has planned production of 42 million tonnes of coal and dispatch of 42.50 million tonnes during the year 2006-07.
CCL produces medium coking coal both raw & washed, non coking coal, soft coke and hard coke mainly form its mines spread in east and west Bokaro. Ramgarh, Giridih, North & South Karanpura, Hutar and Daltanganj Coalfields of Jharkhand.
Indias aluminium production up by 20% in April to September
Indias production of aluminium metal during April to September 2006 has been estimated at 5.543 million tonnes as against 4.613 million tonnes during April to September 2005.
| Company | Production | Share |
| NALCO | 1.800 | 32.4% |
| BALCO | 1.385 | 24.9% |
| HINDALCO | 2.164 | 39.0% |
| MALCO | 0.019 | 0.34% |
| Others | 0.175 | 3.15% |
BEML & Rotem to setup unit for make coaches for metros
Business Line has reported that Bharat Earth Movers Limited in partnership with South Korean Rotem is likely to set up a manufacturing unit for making bogies and electrical inputs for metro coaches.
BEML has already entered into a transfer of technology agreement with Rotem for supplying metro coaches to Delhi Metro Rail Corporation for its phase 1 operations.
BEML expects the demand for metro coaches to go up with mass rail transit systems projects being planned for cities such as Bangalore, Goa, Ahmedabad and Hyderabad.
Haldia urges center for Hooghly River solution
It is reported that Haldia dock authorities have urged the ministry to constitute an expert committee to study afresh the rapid morphological changes in the Hooghly River and suggest suitable solutions. As Haldia docks proposed 6 year old river regulatory scheme for improving navigability of the river near Haldia dock is still awaiting clearance from the ministry.
The condition of the river has worsened since than and it is also not clear if the parameters on the basis of which the original scheme was prepared will still be valid. The cost of the scheme was initially estimated at Rs 400 crore.
It is also reported that Haldia dock authorities have requested the shipping ministry to allow them to acquire a dredger preferably cutter suction type either on lease or through outright purchase to clear the Hooghly river near the dock's oil jetties number one and two. Due to silting in the river near the oil jetties, the jetties were put out of commission recently.
Mr Varin assures short term job security to Corus employees
Mr Philippe Varin CEO of Corus assured that TATA Steels acquisition will not lead to job losses in the short term. Mr Varin while speaking to journalists on a conference call also said there are no plans in the short term to relocate any plants or whatever.
However, Mr Varin declined to comment about job losses in the longer term. He said In all my life I have never been in a position to make a guarantee on jobs as I think our business is to be competitive.
Mr Varin and Mr B Muthuraman MD of TATA Steel responded to questions about job losses by claiming that it would be worse for both companies to not do a deal at this stage, as a merger would create a more competitive company.
M Varin said the Corus brand would stay in the meantime and added that the existing Corus management was committed to being part of the new company. He said What is important today is the commitment of the management of Corus to stay in the enlarged company. This deal is not about job losses. It's about building a global company with an outstanding position. Not making a deal could have much more impact in the long term, and there is certainly not an impact in the long term on the UK steel business to the contrary. We have 50% of market share in the UK and we have a lot of customers and it's very important for them to continue to be supplied with competitive routes.
ThaiNox confirms that JSL may buy a stake
ThaiNox confirmed that Indias Jindal Stainless Limited is looking at buying a stake in the Thai stainless steel company but did not confirm a report in the ET that the JSL is planning a full $325 million takeover.
A ThaiNox spokesperson said Jindal is trying to buy a stake in the company in order to gain a presence in Thailand.
Corus investor SLI sees no significant value in TATA offer
AFX has reported that Standard Life Investments, which holds around 7.9% in Corus, has signaled its opposition to TATA Steel's 455p per share offer. SLI said that the offer by TATA Steel is lower than they would expect the board of Corus to agree to and recommend and did not attribute significant value to Corus shareholders.
SLI said The 455p per share offer from Tata does not attribute significant value to Corus shareholders from achieving what we understand to be the substantial savings available from the joining of the two businesses. We feel that the offer price does not fully reflect the value of that position. We also believe that the capacity discipline that we have seen so far in this cycle will continue and lead to a less volatile, and therefore more valuable, flow of earnings in the future from Corus' assets.
SLI noted that the global steel business is undergoing a period of rapid consolidation which leaves Corus in an interesting strategic position within the industry. It said The acquisition of Corus brings many advantages to TATA Steel, including elevating it into the top five of global steel producers and an as yet un quantified amount of synergy benefits.
Other top shareholders in Corus including Barclays Global Investors and Legal & General Investment Management, Axa Rosenberg and Alliance Bernstein declined to comment.
Aztec announces extension of Mt Gibson bid
Aztec Resources Ltd announced that Mount Gibson Iron Ltd, which has made an unsolicited A$280 million bid for the company, has extended the closing date of its offer to November 3rd 2006 following Aztec's announcement that there is significant uncertainty' as to whether it will be able to continue as a going concern.
Aztec added that Mt Gibson is assessing its options in relation to Aztec's announcement and the effect it will have on Mount Gibson's takeover bid for the company.
It also confirmed that no third party counter offer to Mt Gibsons offer was likely.
Mr Luke Tonk chief of Mt Gibson termed the development as very troublesome and warned Mt Gibson was prepared to walk away from its bid. He said We just have to assess our options in relation to the announcement theyve made and the effect it has on the takeover. We reserve all our rights as far as the takeover is concerned as well as our legal rights.
Aztec Resources has announced yesterday that there is uncertainty about its future if final stage financing negotiations are unsuccessful by around the end of October. Aztec said its bankers would not finalize the funding package until a deal had been done to lift the caveats, meaning it may not have access to funds by its end of October deadline.
Yesterdays developments relate to a deal struck by Aztec in mid 2003 to buy a 30% interest in the Koolan Island leases held by Australian Royalties Corporation. Aztec paid $12 million in cash and shares for the stake but must also pay a royalty of $1 a tonne of ore sold from the tenements. But Aztec yesterday revealed that ARC was also entitled to buy back its 30% stake for just $1 if it had not started mining on the tenements by June 15 next year.
Aztec is negotiating with a banking syndicate for finance facilities of A$100 million for its Koolan Island Iron Ore Project.
China intends to set up 4 coastal steel bases
The swelling steel export has covered up the possible problems caused by blistering growth of steel capacity. The first priority of China's steel industrial consolidation is to set up four super steel bases in coastal regions in 11th five-year period, cited by experts attending the recent 2007 China Steel Industrial Chain Development Forum.
Domestic steel industry has already been burdened with excess supply. If China continues to rest heavily on overseas market for swallowing the huge capacity additions, it may render great risk for the steel sector once the foreign demand growth slows down, warned by Li Lianzhong, director of Ecomomy Bureau under Policy Research Centre of the CPC Central Committee.
China's steel production climbs by 42.65m tons from a year earlier in the first eight months, while the net steel export calculated from export plus substitute for import adds by 15.88m tons, accounting for 37.2% of the total output addition in the period. The real domestic steel consumption only rises by 11.6% YoY through Aug.
Meanwhile, the market price has followed a stable track against soaring steel production, since most of the added steel output has served as exports and replacement for steel imports, held by Wu Xichun, advisor to China Iron & Steel Association.
Setting up four mega steel bases similar with Baosteel in coastal regions is of great significance to China's steel consolidation. As the pace-setting steel producer in China, Baosteel Group has recorded unit profit more than three times that of average Chinese steelmakers in the first eight months.
The Caofeidian project of Shougang and Tanggang and Yingkou project proposed by Anben both have started construction, with first phase project expected to finalize at the end of 11th five-year period. Baosteel's Zhanjiang plan and Liugang's Fangchenggang project are in the pipeline.
These competitive steel bases could enable China to optimize the steel industry layout, curb redundant low-level construction and boost progress in removing inefficient capacity.
(Sourced from Mysteel.net)
Mr Otava buys 90% stake in Czech trading firm Metalimex
Czech daily Mlada fronta Dnes has reported that financier Mr Zdenek Bakala has sold Metalimex to Mr Petr Otava at an estimated price of around CZK 1.5 billion to CZK 2 billion. Mr Otava bought 90% stake in Metalimex from Mr Bakala's firm RPG Industries, which has retained the remaining 10%.
Mr Michael Jasansky manager for M&A of RPG Industries said that both parties signed the contract at the end of June but it was settled as late as September.
RPG had acquired Metalimex two years ago when it bought from Mr Otava and Mr Viktor Kolaceks Karbon Invest which owned Metalimex.
Metalimex, after Moravia Steel, is 2nd largest steel, metals & iron ore trading company in Czech Republic and had posted sales of CZK 31 billion in 2005.
POSCO to setup 0.7 million tonne CR mill in Vietnam
POSCO's board of directors has approved a plan to build a $361 million plant in southern Vietnam to manufacture cold rolled steel by late 2009.
The new facility in Vung Tau near Ho Chi Minh City will be capable of producing an annual 0.7 million tonnes of cold rolled coil for commercial vehicles, motor bikes and other steel products used in construction.
POSCO plans to use the hot rolled coil from its proposed steel plant in India, once it starts production in 2010, to make cold rolled steel products in Vietnam.
Analysis of production cost of China's major steelmakers
Production cost and the product breed and quality are considered the most important factors determining the steelmakers' competitive edge on the world market.
In China, Anshan Steel, Benxi Steel, Taiyuan Steel and Shougang Group belong to the category enjoying very low manufacturing cost, which feature possession of their own iron ore and coking ovens and collieries. Due to rising cost for coking coal, scrap and the freight rates, per ton steel cost at these mills rises by 400-600 yuan/ton. The gross profit is estimated at 1000-1500 yuan/ton steel when the price stands relatively high, and will decrease to 5500-1000 yuan/ton once the price comes down.
The category enjoying low manufacturing cost include Baotou Steel, Wuhan Steel, Maanshan Steel and Meishan Steel, as well as the coastal bases like Baosteel, Tangshan Steel, Nanjing Steel, Shagang Group, Qingdao Steel and the about-to-be Ningbo Jianlong, Zhanjiang project, Jinan Steel's Rizhao plant, etc. They have coking ovens but no self-supply of iron ore.
The third category assumes medium manufacturing cost. The mills of this group have coking ovens, no self-supply of iron ore, and have to pay high expenditure on ore, coal and steel transportation.
The group burdened with high manufacturing cost has no coke oven or iron ore, need to buy all these resources and pay for the transport. They may also meet strains in supply of all kinds of cargos.
The last category bears extremely high manufacturing cost. These mills use electric furnaces to make steel, pay high scrap cost and other energy resources, and are uncompetitive.
Anshan Steel and Benxi Steel have built modern HR sheet production lines and are planning to add equivalently advanced HR sheet lines. In several years, they would be able to make low-cost high quality HR/CR sheet to meet domestic and overseas demand from auto, home appliance and shipbuilding industries. Being not far from Yingkou and Dalian ports, both of them enjoy convenience for ore and coke import and outward shipment of finished steel products.
Taiyuan Steel, situated in coal-rich Shanxi Province, has iron ore and coke ovens of its own and enjoys low electricity price. It is set to build itself into one of the largest stainless steel producers in the world, by investing in modernized HR/CR stainless steel production lines. It aims to possess 2.5-3.0mt/y stainless output.
Shougang Group is also seized of iron ore and coking oven. It is planning to set up a medium plate mill in Hebei, a modern CR sheet mill in Beijing, and invest in HR sheet mill in Hebei in further future. Being situated in Hebei Province and surrounded by resource-rich Shanxi and Inner Mongolia, Shougang Group can easily reach these materials. Through the new plant built at the coast, it can also import ore and coke and ship out steels.
Baotou Steel also boasts favorable position for reaching all kinds of resources. It has rare earth contained iron mine, with 50% ore to be procured from other sources. It enjoys low electricity price. The newly built CSP HR sheet mill is working well and another CR sheet line is to be erected. The steelmaker looks forward to better raw material supply with plans of investing in Mongolia.
Wuhan Steel has a part of ore and coke itself. It's the largest silicon steel manufacturer in China (esp. CR oriented silicon steel). It's experienced in HR sheet production, and is building modern CR sheet mill at the moment. It depends on Yangtze River to carry iron ore and steels.
Ma'anshan Steel has some 30% iron ore self-supplied. It owns a CSP HR sheet production line and a modern CR sheet line. It's expected to become the largest H-beam producer in China, with a most complete variety of subject products. It also depends on Yangtze River for ore and steel transport. Now, it's plunging huge investment in new modern HR/CR sheet production lines.
(Sourced from Mysteel.net)
Nippon to raise 300 billion yen via convertible bond issue
Nippon Steel Corp announced plans to raise about Y300 billion by issuing Y300 billion of EuroYen convertible bonds. It plans to use the proceeds mainly for capital expenditures, investment and loans.
Nippon Steel said it will allocate Y300 billion of euroyen convertible bonds to its wholly owned unit, NS Preferred Capital Ltd. The overseas unit will then allocate the same amount of convertible preferred securities to Mizuho Corporate Bank Ltd., Bank of Tokyo-Mitsubishi UFJ Ltd. and Sumitomo Mitsui Banking Corp.
Qinghai Beitai launches construction of cast iron pipe project
It is reported that the construction of the semi finished cast pipe processing project of Qinghai Beitai Cast Pipe Company Ltd has began recently.
The project intends to construct two processing lines of semi finished cast pipes, which are to launch operation at the end of 2006 and 2007 respectively.
The company will have a processing capability of 100,000 tons per year of semi finished nodular cast iron pipes when the two lines launch production.
Mr Visclosky urges US ITC to continue AD on cut to length plates
US Rep Mr Peter Visclosky again testified on Thursday before the U.S. International Trade Commission in support of existing fair trade policies that he said keeps steel jobs in Northwest Indiana from being shipped overseas.
Mr Visclosky said "Lifting these common sense trade policies would put Northwest Indiana jobs at risk of being shipped overseas. Allowing illegally dumped steel to enter our marketplace will weaken our manufacturing base and eliminate good-paying American jobs."
Thursday's hearing was on cut to length plate steel from Belgium, Brazil, Finland, Germany, Mexico, Poland, Romania, Spain, Sweden, Taiwan and the United Kingdom.
Reliance Steel & Aluminums net surges by 117% in Q3
Reliance Steel & Aluminum Co has announced that its net income was a record $107.5 million in July to September 2006 quarter up by 117.6% YoY as compared to $49.4 million in July to September 2005.Its Q3 sales were also a record at $1.6 billion an increase of 87% YoY as compared with 2005 third quarter sales of $870.1 million.
The 2006 third quarter results include Yarde Metals Inc that was acquired on August 1st 2006 and Earle M. Jorgensen Company that was acquired on April 3rd 2006.
For the nine months ended September 30, 2006, net income amounted to a record $279.9 million up by 93% YoY as compared with net income of $144.8 million for the same period in 2005. Sales for the 2006 year to date period were a record $4.2 billion an increase of 67% as compared with 2005 nine month sales of $2.5 billion.
Mr David H Hannah CEO of Reliance said Demand and pricing for our products continued at a healthy pace during the third quarter. The aerospace, energy and non residential construction markets stood out as the most improved from the prior year. Our August 1st 2006 acquisition of Yarde Metals Inc also favorably affected our financial results.
Reliance Steel & Aluminum Co, headquartered at Los Angeles in California, is one of the largest metals service center companies in the United States. Through a network of more than 160 locations in 37 states and Belgium, Canada, China 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 sold to more than 95,000 customers in various industries.
Chilean Gerdau Aza to start upgrades in mid 2007
BNamericas has reported that Brazilian Gerdau Chilean unit Gerdau Aza plans to upgrades its plant in mid 2007 to increase its output to 550,000 tonne per year from the current 400,000 tonne per year. Mr Hermann Von Mlhenbrock president told BNamericas "Sometime in July and August 2007, we will be stopping the plant to make an important change in the steelmaking process and from there move on with the plan to turn out 550,000 tonnes per year. We have already invested nearly $35 million and we expect the plant to be ready to reach that production in 2008."
This is the first of two expected investments as after reaching 550,000 tonne per year, it will begin a second stage of investments of $90 million to hit 750,000tonne per yea in 2010.
Gerdau Aza manufactures and supplies bars and rolled steel beams for civil construction and the metal-mechanic industry. The company's two plants are located just north of Chile's capital Santiago in Renca and Colina.
POSCO to setup 0.4 million tonne galvanizing mill in Mexico
POSCO's board of directors has approved a plan to build a $262 million plant in Mexico to manufacture auto grade galvanized steel by June 2009.
POSCO plans to set up a continuous galvanizing line for processing 0.4 million tonnes of steel. The galvanized steel will be supplied to auto majors in the southeastern part of the United States where global carmakers such as General Motors, Nissan, Hyundai and Mercedes-Benz produce 2.2 million cars every year.
PT Bumi Resources buy back 6.5 million shares
Indonesias largest publicly listed coal exporter PT Bumi Resources announced that it has bought back its 6.5 million shares or 9.26% of the market volume of 70.21 million shares at Rp760 per share. The transaction was made at the Jakarta Stock Exchange on October 16 with PT Danatama Makmur as a broker.
Mr Eddie J. Soebari director of Bumi Resources said that the transaction brought the number of shares bought back to 16,384,500 and the maximum number of purchasable shares to 1,923,615,500.
Earlier, on October 13th, the company also bought back its 9,884,500 shares in 19,769 lots, accounting for 22.87% of the total market volume of 43,213,500 shares.
Xuanhua puts new converter into production
Hebei based Xuanhua Steel has reportedly put the newly built 120 tonne converter into production on October 14 in addition to successful hot testing of the 12 strand continuous caster.
The project could help raise the steelmakers annual capacity up to 6 million tons.
(Sourced from Mysteel.net)
Mincor to increase nickel output in Kambalda region
Mincor Resources NL is looking to boost its nickel output and establish itself as the largest producer in the Kambalda region of Western Australia. Mr Jim Reeve ED of Mincor while addressing Australian Nickel Conference in Perth said that it was aiming to ramp up its yearly output by 5,000 tonnes to 20,000 tonnes per annum by 2010.
Mr Reeve said that its nickel discoveries in the region were paralleling the company's increasing mining and production profile, and would help achieve the proposed production ramp up. He said "We are putting a lot of effort into Kambalda and are spending historic highs there on exploration and capital development to keep mines going at full production.
Mr Reeve said "The basis of our expansion strategy is to maintain output of at least 15,000 tonnes of nickel through to 2013.Behind that, however, is an objective to lift output to 20,000 tonnes per annum by 2010 through further discovery and production gains within our four main Kambalda projects."
Mincor operates four underground nickel mines in Kambalda and has a JV with View Resources Ltd in the emerging Carnilya Hill nickel project.
Credit Suisse ups share rating of Maanshan Steel
Bloomberg has reported that China's second biggest HK listed steelmaker Maanshan Iron & Steel Co had the rating on its stock raised to "neutral" from "underperform" by Credit Suisse Group because of an improved outlook for steel prices and rising production capacity.
HK based analysts Trina Chen and Mick Mi said in a report that "We expect lower supply risk from China in 2007. While demand growth remains 15% to 20%, we see a more balanced domestic steel market in 2007."
Anhui province based Maanshan Steel yesterday posted a 5.3% rise in profit for the July to September quarter ending three straight quarters of declines.
Maanshan Steel has also received regulatory approval to build a plant to make as much as 5 million tons a year of steel used in automobiles and home appliances. The plant will start operation next year.
NW Pipe reports rise in earning and sales in Q3
Northwest Pipe Company has announced record quarterly sales of $92.4 million for the third quarter of 2006. Net income for the quarter was $4.1 million as compared to $4.0 million in the third quarter of 2005.
Mr Brian Dunham president and CEO said "All three of our business groups increased their sales over the same period last year. In addition to the record sales recorded in the third quarter of 2006, our backlog at the end of the quarter was also at a record high of approximately $195 million. This is a 55% increase when compared to the third quarter last year."
Sales in the Water Transmission Group were $65.5 million in the third quarter of 2006, compared to $61.8 million for the third quarter last year. The gross profit for this Group was $12.7 million, or 19.4% of sales, consistent with our results over the same period last year.
The Tubular Products Group's sales were $22.3 million in the third quarter of 2006, compared to $20.5 million reported for the third quarter last year. Gross profit was $2.2 million for the quarter compared to $1.1 million in the third quarter of 2005. Gross profit as a percent of sales was 10.1% in the third quarter of 2006, compared to 5.3% for the same period in 2005.
The Fabricated Products Group generated sales of $4.7 million during the quarter compared to $4.5 million in the third quarter of 2005. Gross profit was $243,000 compared to $454,000 for the same quarter last year.
Northwest Pipe Company manufactures welded steel pipe and other products in three business groups. The Company is headquartered in Portland, Oregon and has nine manufacturing facilities across the United States and Mexico.
ASTM changes some standards
ASTM International Subcommittee A01.19 on Sheet and Strip Steel has made three significant changes to ASTM standards under its jurisdiction.
The changes are as follows.
1. Reporting of boron levels made mandatory
2. Changes to size limitations of general requirements and product standards for hot rolled material.
3. Addition of grades 90 and 100 for hot rolled sheet and strip products.
Subcommittee A01.19 is part of ASTM International Committee A01 on Steel, Stainless Steel and Related Alloys.
HCC to resume coal exports
Zimbabwes Hwange Colliery Company Limited hopes to resume coal exports by the end of the fourth quarter as output rises after the arrival of new mining equipment. Mr Godfrey Dzinomwa MD of HCC said that the last batch of imported equipment have been received and would have an immediate impact on production, which would see the company resuming normal coal supplies and having enough for export.
Mr Dzinomwa had earlier said that HCC would raise output to 425,000 tonnes per month between October and December, outstripping local demand, currently at 300,000 tonnes per month.
HCC said "The Company is confident that sustainable production output to meet market demand will be realized before the end of the year. The current plant and equipment will be refurbished. In the meantime, the company has hired mining equipment from a contractor in order to augment the existing production equipment.
