November, 22 2006
TATA Steel board to meet on Thursday to decide on Corus
The board of TATA Steel Ltd. will meet in Mumbai on Thursday where it may consider a revised offer for Anglo-Dutch steel-maker Corus Group.
Some facts about TATA and CSN bid:
TATA steel has completed its due diligence period after it has made offer
Corus Board approved TATAs offer
CSN's offer is subject to due diligence
Large investors like Barclay's Global and Stadard Life may not like to make counter offer on TATA's raised offer
CSN made an abortive attempt to acquire Corus four years ago
There is a lot speculation in the industry whether TATA Steel will increase its offer or not. However, TATA Steel maintained its "No Comment" stand so far.
POSCO to buy more land to compensate Indian farmers
South Korean steel maker POSCO said it would acquire additional land to compensate villagers opposed to its planned $12 billion steel plant in Orissa.
A spokesman for POSCO's Indian unit said the move, which would cost the company about $140,000, would help it overcome local opposition to the project, the biggest foreign direct investment proposal in India.
POSCO, the world's third-largest steel maker, hopes to start construction work on the project from April 2007.
A senior state government official welcomed the plan. This would surely pave the path for the steel plant," the state government official said.
But villagers have opposed the project saying that it would drive 20,000 villagers from their homes and farms, although the government says it would affect only 500 families and create thousands of jobs.
Abhay Sahoo, leader of a local organization opposing the project, rejected the steel maker's proposal, saying it was inadequate.
"We will not allow the company to build its steel plant," Sahoo said.
Green light for TATA rail proposal
The railway board agreed to the TATA Steels proposal for upgrading and strengthening the railway infrastructure in the Singhbhum region of the state (Ranchi).
The steel majors proposal to the railway board comes in the wake of its decision to set up a 12-million tonne capacity greenfield project in Seraikela-Kharsawan district of Singhbhum-Kolhan.
Some of the companys major proposals include strengthening the railway tracks between Gamharia and Manoharpur railway stations and between Rajkharsawan and Rakpura stations.
Further, the company had wanted additional railway tracks between Manoharpur and Sini.
Head of Jharkhand project of TATA Steel, Mr J. P. Singh, has made a suggestion to the state government to widen some of the national highways for the smooth movement of the freight.
Tax exports of iron ore: CII
Industry body CII has demanded levying duty on exports of iron ore with rich 'Fe' content, while pointing out the need for investment of at least Rs 20,000 crores to modernise mining operations and create benefaction capacity worth 200 million tonnes.
"It is recommended that an export duty be levied on exports of iron ore lump with Fe content of 65% and above and the existing system of canalisation and export licensing should be discontinued".
After remaining stagnant at around 35 million tonnes during 1991-2000, exports of iron ore from the country have grown by 78 MT during the past four years, primarily to China.
Arguing that a judicious balance between exports and domestic supply of ore was imperative, CII suggested that long-term export supply of iron ore be confined to a maximum of five-year contracts and the duration should be reviewed periodically.
"Government would encourage investments in creation of an additional modern mining and benefaction capacity of 200 MT and the size of investment will be around Rs 20,000 crore," the CII said.
Coal India to bid overseas coal block
Coal India (CIL) is likely to join hands with NTPC to bid for non-coking coal blocks overseas. CIL has decided to ally with with Rashtriya Ispat Nigam (RINL) and Steel Authority of India (SAIL).
The CIL is also planning to offer 20% of its total coal production through the e-auctions platform in the next 2 years. By way of e-auctions, it intends to offer about 36 MT of coal through the electronic platform in 2006-07.
The company is exploring options of bidding for thermal coal blocks jointly with NTPC. The company has already decided to either form a consortium or float a special purpose vehicle (SPV) with SAIL and RINL for acquiring coking coal blocks. It is looking at countries like Canada, Australia, South Africa, and Argentina.
Meanwhile, the company has embarked upon a major expansion plan of increasing the total production to 520 MT by the end of the 11th Plan Period from 363 MT in 2006-07.
HZL hikes prices after 2 cuts on trot
After two subsequent price cuts, the countrys largest zinc producer Hindustan Zinc (HZL) raised selling prices of its zinc products by Rs 300 a tonne effective from last Saturday. This was the companys sixth revision so far in this month.
The change in sentiment took HZL just a couple of days to revise the prices upwards, in tandem with the movement on the London Metal Exchange (LME).
Earlier, the company cut product prices by Rs 12,700 a tonne across the board effective from November 16 in line with the LME. It had also slashed zinc prices by Rs 200 a tonne in its previous revision on November 11.
With the latest revision, HZL is quoting the high-grade zinc at Rs 2,21,000 a tonne, while special high-grade and prime western zinc is sold at Rs 2,21,500 a tonne and Rs 2,18,200 a tonne respectively.
October 2006 Crude Steel Production
World crude steel production for the 62 countries reporting to the International Iron and Steel Institute was 105.9 million tonnes in October 2006 YOY compared to 7.4% higher than October 2005.
China produced 37.7 mmt of crude steel in October, 18.0% higher than for the same month last year. Indian production reached 3.7 mmt, an increase of 2.6% YOY. Production in South Korea declined by 5.9% YOY to 4.0 mmt in October. Japan's production, at 10.1 mmt, was increased by 4.5% YOY.
Production in the EU was 17.4 mmt in October. This is 3.5% higher than for the same month last year. Crude steel production in Belgium was 1.0 mmt, an increase of 13.6% compared to the same month last year. This is the first time Belgium has achieved production of 1.0 mmt in a single month. Other major producers in the region include Germany which is 4.2 mmt, +4.1%, Italy which is 3.0 mmt, +5.9%, France which is 1.6 mmt, -7.0%, and the United Kingdom which is 1.2 mmt, +5.7%.
Crude steel production in North America is estimated at 10.7 mmt in October. This is 1.5% lower than the same month last year. Total production in the United States was estimated at 7.8 mmt in October, 4.7% lower than October 2005.
IISI estimates South American crude steel production is 4.0 mmt in October, an increase of 6.1%YOY.
US domestic steel production decreases
Domestic steel production fall from the previous seven days, according to the AISI. Production among domestic steelmakers was about 1.78 million tonnes for the week ended 18th November that was less by 4.6% from the 1.86 million tonnes produced for the week ending 11th November.
The organization's data is based on reports from companies representing about 75% of the domestic industry's raw steel capacity.
Baosteel to take over Bayi Steel Report
Baosteel will takeover Bayi Iron and Steel Co. Ltd., one of the largest steelmakers in western China, at no cost next month, according to a Chinese government source.
Bayi Iron and Steel Group will officially transfer all of its assets in its Shanghai-listed arm, Bayi Iron and Steel Co., to Baosteel at the beginning of December, Interfax reported on account of a government source.
The transfer involves Bayi Group's 53.12% stake in Bayi Company and its mining assets. After the transfer, Bayi Group will only have assets that are not relevant to steel production.
Bayi Company's advantages of a cheap supply of power and raw materials, including iron ore, coking coal, and rare earths, compensate for Baosteel's weakness of not being able to produce its own raw materials. Baosteel's management, production technology, and market advantages will help Bayi Company's future development.
U.S. Steel shares gain
After the news that Russia's OAO Severstal may bid for Pittsburgh-based Company, shares of U.S. Steel Corp rose for consicutive second day. The rise in prices was 9.3%, which is a six month high.
The Fairfield mills make steel used in building construction and energy exploration, including galvanized products.
BlueScope Steel remains open to talks with Smorgon Steel and OneSteel
In response to statements made today by Smorgon Steel and OneSteel at their AGMs, BlueScope Steel said it remains open to ongoing discussions with Smorgon Steel and OneSteel about the merger proposal.
BlueScope Steel believes a negotiated outcome should be achievable and is the most appropriate course of action for all parties.
The Company believes good progress has been made in the talks to date and remains available to continue discussions.
New Corrugated Steel Wall Tested by Campus Engineers
A new type of building wall designed to be safer and cheaper than current designs was tested yesterday by UC Berkeley researchers after being developed by a local engineering company.
The wall, which was constructed of corrugated steel, would be the first of its kind on the market, as walls are traditionally made of sheet metal or plywood.
Researchers said they hope the corrugated steel shear walls will be manufactured in assemblies and ready to erect upon arrival at the construction site.
Don Allen, director of engineering at Steel Framing Alliance, a proponent of the new walls said that a relatively unskilled laborer could apply the screws without extensive training.
Advanced high strength steel to benefit lifts
A lighter and more space-saving elevator that reduces the wear on the motor and moving parts has been developed by the Spanish company IMEM. The lift is made of advanced high strength steel, is in the company's range of silent lifts, and has aroused keen interest in the market. The use of advanced high strength steel also reduces the energy consumption both in production and in operation, which lowers the total environmental impact. The lift design has been nominated for the Swedish Steel Prize 2006.
The company has produced the design of a lift made of advanced hot-rolled high strength steel. The minimum yield strength of the steel is 500 N/mm2, and the steel has much better properties than ordinary structural mild steels. As a result, the material thickness of both the chassis and the frame holding the counterweight has been reduced. The thickness reduction is around 1.5 mm - from 6 mm to 4.5 mm - which has enabled the weight of the lift chassis to be more than halved. Designers have also been able to put to use the strength of the high strength steel for improving the efficiency of the design.
The Swedish Steel Prize 2006 will be awarded on 29 November in Stockholm.
$150 million for rehabilitation of the Iron and Steel Company in Iraq
An official in the Iron and Steel Company in Basra, Iraq, said last Saturday that work in rehabilitating the factories of rolling and steel in the company would begin early next year after the Ministry of Finance has allocated $150 million for rehabilitation.
The reconstruction and rehabilitation will be undertaken by the engineering and technical teams of the company. The rehabilitation will depend on the materials available in the local markets. The company had stopped working since the first Gulf War, when it was bombed and destroyed its important parts followed by looting and vandalism during the collapse of the former regime.
The Iron and Steel Company consists of two major factories for smelting and rolling. It employs more than 6300 workers who are paid nominal salaries by the State.
Steel Dynamics Increases Share Repurchase Program
Steel Dynamics, today announced that its Board of Directors has authorized the Company to increase its existing 5 million share repurchase program by an additional 2.5 million shares. Pursuant to the additional authorization, the Company will now have the ability to purchase up to an additional 2.8 million pre-split, 5.6 million post-split shares.
On August 29, 2006, the Company announced a program authorizing the repurchase of up to 5 million shares. Repurchases under that program have totaled 4.7 million shares to date. Since September 2004, the Company has repurchased 12.2 million shares of its common stock, 24.4 million shares on a post-split basis.
Pursuant to this program, purchases of shares of the Company's common stock will be made based upon the market price of the Company's stock, the nature of other investment opportunities or growth projects presented to the Company, the Company's cash flows from operations, and general economic conditions. The share buyback program does not require the Company to acquire any specific number of shares and may be modified, suspended, extended or terminated by the Company at any time without prior notice.
MMC Norilsk Nickel to acquire Nickel Business from OM Group for $408 million
OJSC Mining and Metallurgical Company Norilsk Nickel announced today that is has entered into a definitive agreement to purchase the nickel business of OM Group Inc for $408 million in cash, on a debt-free, cash-free basis.
The Nickel Business is made up of the following assets:
OMG's nickel refining operations in Harjavalta, Finland with total annual production capacity of 60,000 tons of nickel
OMG's Cawse nickel mining and leaching operations in Western Australia, which supplies nickel carbonate to the Harjavalta refinery
OMG's 20% stake in MPI Nickel Pty Ltd, which operates the Black Swan and Silver Swan nickel mines that supply nickel concentrate to the Harjavalta refinery, and is developing the Honeymoon Well project
Up to 11.1% of OMG's holding of the common shares and convertible debt in Talvivaaran Kaivososakeyhtio
With this transaction, Norilsk Nickel continues to expand its operations internationally and strengthens its position in the global mining and metals industry.
OM Group is a leading, vertically integrated international producer and marketer of value-added, metal-based specialty chemicals and related materials. Headquartered in Cleveland, Ohio.
