July, 26 2005
Indian Steel producers meet Steel Minister for Iron Ore
A day after Mr LN Mittals announcement of closing the Jharkand deal three top steel industrialists Mr Prashant Ruia of the Essar Steel, Mr Sajjan Jindal of Jindal Southwest Limited and Mr Pramod Mittal of Ispat India Ltd met he minister on Sunday and requested to safeguard their interest.
They have asked that the ore requirements of existing steel producers should be met before allocating captive mines to new entrants, or exporting the ore. They have also pointed that the location of steel plant should not be the criteria for allocation of iron ore reserves.
RBI upbeat on growth, cautions on inflation
The Reserve Bank of India sounded an upbeat note on growth prospects for Asia's third-largest economy but said inflation pressures persisted, fuelling expectations it would raise a key interest rate on Tuesday.
In a macroeconomic and monetary developments review for the April-June quarter released on Monday, the Reserve Bank of India (RBI) said the economy would grow at a robust pace on strong farm, services and industrial output in the financial year to March 2006.
The RBI report carried growth forecasts by several international agencies and included its own estimate of around 7 percent. The forecasts ranged from 6.0 to 7.2 percent.
The review comes amid a raft of data pointing to healthy demand in the economy. India's industrial output, a barometer of demand for consumer and capital goods, grew at 10.8 percent in May while exports rose 19 percent in June.
The RBI makes its quarterly review of monetary policy on Tuesday and many analysts expect it to raise its short-term benchmark reverse repo rate by 25 basis points to 5.25 percent.
The RBI also had high global oil prices to consider, which forced it to strike a cautionary note on inflation. Inflation hit an oil-fuelled 3-1/2 year high of 8.74 percent in August 2004, prompting the government to cut duties on steel and petroleum products.
Annual inflation, based on the widely tracked wholesale price index, was 4.14 percent in the week to July 9 and the RBI expects the rate to end the fiscal year between 5.0 and 5.5 percent.
SAILs net income up by 56% in Q1, least in last 10quarters
Steel Authority of India Ltd., the nation's biggest steelmaker, may say profit growth slowed for the first time in 10 quarters as raw material costs rose and a surge in Chinese production forced the company to cut prices.
Net income probably rose 56 percent to 17.3 billion rupees ($397 million) in the three months ended June, from 11.11 billion rupees a year earlier, according to the median estimate of five analysts surveyed by Bloomberg.
Lafarge India to add 0.4 million tonnes at Jharkhand
Lafarge India is planning to hike its production of Portland Slag Cement (PSC) by 0.4 MTPA which would take its total installed capacity of PSC to 3.4 MTPA
With this capacity addition, Lafarge Indias total cement-making capacity in the country would stand at 5.4 MTPA, spread over Jharkhand and Chhattisgarh
Since availability of slag has increased as a result of capacity expansion by Tata Steel, we thought of increasing our PSC capacity by 0.4 mt, said a source.
Currently, 0.9 MTPA of slag generated by Tata Steel goes into its production here of around 1.6 MTPA PSC. After the steel majors recent revamp of its biggest G blast furnace, overall slag availability with the steel major has gone up to an annual 1.2 MTPA.
Indian Coal production up by 3% in June
The total coal production in the country in June 2005 is estimated at 28.55 million tonnes as against 27.69 in the same month last year. Out of this 477 working mines of Public Sector Coal India Limited (CIL) and its subsidiaries produced 24.38 MT, 67 mines of Singareni Collieries Company Limited (SCCL), a joint Undertaking of Government of Andhra Pradesh and the Government of India, produced 2.52 MT and other 16 mines contributed 1.65 MT.
The total off-take of coal during the month was 29.65 MT against 29.60 MT during June 2004. Coal off-take in June by CIL was 25.34 MT, SCCL 2.61 MT and other mines 1.70 MT.
Jharkhand CM postpones meeting LNM in London
Jharkhand Chief Minister Arjun Munda today postponed his visit to London following External Affairs Ministry's "non-clearance" of three of his cabinet colleagues in the delegation.
The delegation was supposed to fly to London on Wednesday to hold discussions with the Mittal group.
Mr U K Sangma Principal Secretary, Mr P P Sharma Chief Secretary and , Mr Sukhdev Singh Public Relation Department Secretary are part of the delegation.
But the clearance could not be obtained in time for Mr Raghuvar Das Finance Minister, Mr Sudesh Mahto Home Minister and Mr Madhu Kora Mines Minister leading to postponement.
Steel industry consolidation switches to Latin America - MEPS
Consolidation of the steel industry in North America took a giant leap forward with Mittal Steels acquisition of International Steel Group earlier this year. Since 2000, ten independent integrated steel companies have amalgamated into three majors, and eight separate electric furnace operators have merged into two big groups. Some independents still remain, but consolidation in North America has been largely completed.
Now the industrys attention is turning to Latin America where consolidation is starting to gather momentum. Several deals are currently under way that aim to bring together multiple steel plants under common ownership in order to exploit economies of scale.
The most ambitious of these was unveiled a few weeks ago by Techint, the steel, engineering and energy group based in Buenos Aires. It plans to acquire Mexicos largest steel producer, Hylsamex, for the substantial price of $US2.3 billion. This would create Latin Americas largest steelmaking combine, with operations stretching from Argentina to the US border. Techint already owns Argentinas largest steel maker, the 2.8 million tonne per year flat rolled products manufacturer Siderar, and has a controlling share in Venezuelan flat and long producer Sidor. Together with Hylsamex, the new enterprise would be able to make around 12 million tonne per year, putting it in the top 20 global producers.
Brazils Usiminas which has already become that countrys largest steelmaker by taking control of plate and coil producer Cosipa also aims to be a substantial shareholder in Techints new concern. This may lead to further consolidation in the medium term.
There is good reason to believe Techints grand plan will be accomplished, as the company has a solid track record in corporate deal-making. In the early 1990s it began building up a group of seamless tube producers, by acquisition. These included taking over NKKs mill in Japan in a pact that was the first to allow foreign owners to control a Japanese steel company. Today Tenaris as the company is now called is the worlds largest seamless tube producer, with manufacturing operations in nine countries.
One of the pioneers in consolidation of steelmaking throughout the Americas is the Brazil-based Gerdau group. For many years it has produced steel in Uruguay, Chile and Argentina as well as Brazil. Its North American arm, Gerdau Ameristeel, operates in Canada and the USA where it recently acquired the North Star Steel mini-mills. The group as a whole produced more than 13 million tonnes of crude steel last year. Gerdau is continuing to look for acquisitions and is in the process of taking over the largest electric steel mill operator in Colombia.
Arcelor is also active in consolidating the Latin American steel sector. Later this year, it plans to establish a holding company for several producers in Brazil and Argentina in which it has interests. The new Arcelor do Brasil company is expected to be listed on the S Paulo stock exchange.
Assuming all these deals go through as planned, there still remain opportunities for further consolidation of the Latin American industry. There is currently speculation that mills in Chile, Peru, Mexico and Colombia may become takeover targets. Although some of these would need significant investment to upgrade their production processes, the generally positive prospects for the regions steel markets make them attractive if the price is right.
Ukrainian police targets Donetsk tycoon
The uncrowned king of the Donbas, Renat Akhmetov, though not been formally charged with any crime yet may be in serious trouble.
Kyiv investigators do not conceal that they want to see him behind bars for an attempted murder in the 1980s. Akhmetov backed former prime minister Viktor Yanukovych's failed presidential bid against Viktor Yushchenko last year
Akhmetov has been the informal leader of the Donetsk "clan" since the mid-1990s, when his predecessors, Akhat Bragin and Yevhen Shcherban, were murdered.
Cleverly using connections in the Donetsk bureaucracy and ties in the influential local Muslim community (Akhmetov is an ethnic Tatar) and burning cheap coal from the heavily subsidized local mines at local steel mills, Akhmetov, age 38, has become the world's 258th richest billionaire and Ukraine's richest man, according to Forbes's 2005 list.
Among the assets controlled by Akhmetov are Ukraine's champion soccer team, Shakhtar, the country's third largest steel mill, Azovstal, and the key maker of pipes for the fuel industry, Khartsyzk Pipe Plant. Akhmetov also holds the controlling stake in the Investment Metallurgy Union, which last year won a government tender for Ukraine's largest steel mill, Kryvorizhstal. The other shareholder is Viktor Pinchuk, former president Leonid Kuchma's son-in-law.
Kiev investigators say "Now, when we have a statement from the victim, we have all grounds to open a criminal case into the event," not necessarily against Akhmetov personally, he said, although "Ukraine's richest man" will be the main suspect. The Penal Code provides for punishment ranging from 10 years to life imprisonment for the crime of which Akhmetov is suspected, Moskal said.
Iron ore market to remain in balance till 2010
The biggest bull market in iron ore history culminated in a 71.5 per cent rise in iron ore fines prices in 2005.Steel prices have recently started to fall and spot freight rates have collapsed. What is the iron ore outlook? Is it all over for the market?
"Definitely not," according to Mr Jim Lennon, analyst with Macquarie Bank, who made a presentation at the annual dry bulk shipping market outlook conference in London recently. The expert said China and China alone has driven the bull market in iron ore since 1990.
The sea-borne market has grown by 305 million tonnes, of which China has accounted for 250 million tonnes (mt) or 82 per cent; and since 2000, the country has accounted for as much as 93.5 per cent of growth, he pointed out, adding that China will continue to dominate iron ore sea-borne growth.
Forecasting that iron ore market will remain balanced to short up to 2010, the analyst said the market would be impacted by how quickly new projects can ramp up. Capital cost overruns and shortage of equipments and people would remain an issue.
While falling steel prices and more supply of iron ore will lead to lower iron ore prices in 2007 and 2008, high prices would attract (albeit, temporary) surge in Chinese and Indian iron ore supplies.
There has been a huge leap in world steel growth since 1999 268 mt during 1999-2004 versus fluctuating growth /degrowth during the previous five-year periods. China is the main, but not the only reason, for this growth.
China represented 56 per cent of growth since 1989, India 2.9 per cent, other Asia 11 per cent, Former Soviet Union 8 per cent, Latin America 4.7 per cent and Japan, West Europe and the US combined 10 per cent.
There has been a phenomenal growth in Chinese steel (crude steel production up 37.5 per cent year-on-year in May to annualised rate of 350 mt per annum), but it is now balanced between demand and supply.
Currently, world supply of steel exceeds demand, leading to production cuts and falling prices. Steel production cuts have now started to come through, but not in China, yet.
Chinese demand is unlikely to collapse anytime soon, according to Mr Lennon. He said growth rates are adjusting down as the Chinese Government puts the economy on a more sustainable footing to ensure continued growth. Due to quality problem and market saturation, China is unlikely to become a major exporter, but exports will rise despite government attempts to stop them.
Also, Chinese mills are unlikely to slash production between now and end of the year, but the pace of growth will slow as some loss making plants close.
Shipping Rates for Coal, Iron Ore Reach 27-Month Low
The cost of shipping commodities such as coal, iron ore and grains fell for a fifth consecutive week, reaching the lowest in more than two years, as the global fleet of so-called dry-bulk vessels grew.
The Baltic Dry Index, a measure of freight rates for different-size dry-bulk ships on global trade routes, declined 50 points, or 2.4 percent, to 2004 points, the lowest since April 4, 2003, according to London's Baltic Exchange.
The index, down 68 percent from a Dec. 6 record, is heading for its fifth consecutive monthly drop. The global capacity of dry- bulk carriers stood at 333.6 million deadweight metric tons at the end of June, up 8 percent from a year ago, according to London- based Drewry Shipping Consultants Ltd.
Owners of Capesize vessels, the largest dry-bulk carriers, can look forward to the daunting prospect of 120 more new Capesizes scheduled to be delivered in the next 18 months,'' London-based shipbroker Galbraith's Ltd. said in a July 22 report.
Capesizes can carry about 175,000 metric tons of cargo. Freight rates for such ships on the benchmark route from Australia, the world's biggest iron ore and coal exporter, to China fell 19 cents, or 2.4 percent, to $7.85 a ton, from July 22, according to the Baltic Exchange.
Capesize freight rates to China from Brazil, the world's second-biggest ore exporter, fell 64 cents a ton, or 3.1 percent, to $19.85 a ton, according to the Baltic Exchange.
Freight rates for Capesizes shipping coal from the Richards Bay coal terminal in South Africa, the world's second-biggest coal- export port, to the Netherlands fell 18 cents, or 1.8 percent, to $10.01 a ton, according to the Baltic Exchange.
USA Steel production down in 2005
Domestic steelmakers saw their weekly output increase from the previous seven days, but drop compared to the same time last year, according to data released Monday by an industry group.
Year-to-date production, as of July 23, was 58,017 million net tons, down 5.4 percent from 61,324 million net tons in the same period a year ago.
The organization's data is based on reports from companies representing about 90 percent of the domestic industry's raw steel capacity.
Those companies that reported production figures said they were using 86.6 percent of their available capacities for the week ended July 23. That was down from the 94 percent capacity utilization they reported during the same week in 2004, according to AISI.
Mittal Steel's LIMINCO Deal In Limbo
The Bryant led NTGL's attempts to grant Mittal Steel the LIMINCO concession suffered a severe setback on Friday, July 22, 2005 when the National Transitional Legislative Assembly (NTLA) Plenary adopted a report from the Committee on Lands, Natural Resources and Environment endorsing claims against the Government.
The adoption of the report reaffirms the position of the Global Infrastructure Holdings Limited (GIHL) that it was granted the LIMINCO concession fairly, but machinations and manipulations caused members of the Minerals Technical Committee to change their decision and award the contract to Mittal Steel.
The NTLA conducted an investigation based upon a legislative mandate arising out of claims by GIHL that the Bryant-led NTGL had engaged in "bad business" practices in manipulating the Minerals Technical Committee through heavy-handed diplomatic pressure to rescind its earlier position and grant the LIMINCO concession to a competitor, Mittal Steel.
Hyundai, JFE Steel in Talks for Blast Furnace
Hyundai Automotive Group is in talks with JFE Steel Corp., Japans second-largest steelmaker, about the construction of two steel blast furnaces to provide steel sheets for car manufacturing.
JFE Steel president Hajime Bada said his company was asked to participate in Hyundais plan as an advisor but he did not confirm whether it accepted Hyundais offer
But sources said JFE Steel is likely to provide key technology for the steel blast furnaces to be built in Kangjin, South Cholla Province, and share the financial burden for the construction.
JFE is a major business partner of Hyundai Hysco, a steelmaker that is owned by Hyundai Motor. JFE has a 14 percent stake in the Hyundai Motor affiliate and supplies half-finished steel products to the firm, which does not have a blast furnace.
Hyundai Motor earlier said INI Steel, a parent of Hyundai Motor, is proceeding with the plan to build two steel blast furnaces. When completed, the furnaces will produce about 7 million tons of steel sheets beginning in 2010.
ICG Retains Top Coal Executives for Move to Charleston
When the headquarters of International Coal Group moves to Charleston, several of West Virginia's leading coal executives will be on board.
Published reports have said ICG, headed by New York billionaire Wilbur L. Ross, intends to move its headquarters from Ashland, Ky., to Charleston. Ross cited better office space and proximity to the existing headquarters as reasons for the move.
The company has not indicated when it will make the move, but officials say at least 100 of the company's 1,900 employees will relocate to Charleston.
When the move does take place, several key executives already will be in place in West Virginia's capital city. Ross has spent the past several months wooing a number of the state's coal executives to his young company.
Charleston resident Ben Hatfield was named ICG's chief executive officer in March. He is the former president of Eastern Operations for Arch Coal Inc. Hatfield signed a three-year contract with ICG, guaranteeing him a base salary of $500,000 annually and a bonus program that includes cash incentives and optional stock purchases, according to information on file with the federal Securities and Exchange Commission.
Charleston attorney Roger Nicholson signed a three-year contract with the company in April. Nicholson was named general counsel and senior vice president of the company Nicholson, most recently a member of the Charleston-based law firm Jackson Kelly, previously was the general counsel for Massey Energy Before that, he managed legal affairs for Ark Land Co., a subsidiary of Arch Coal. Nicholson's contract guarantees him a base salary of $260,000 annually. His contract also guarantees him an annual performance based cash bonus with a target rate of 100 percent of his base salary,
Recently the company has added several other well-known names in the coal industry to its list of employees. Sam Kitts, who had been vice president of Alpha Natural Resources Services Co. in charge of the southern region of West Virginia, has been named ICG's senior vice president of West Virginia and Maryland operations.
ICG also has hired Danny Cox, former director of environmental engineering and compliance at Massey Energy, and Gene Kitts, former vice president of environmental and technical affairs for Arch Coal and brother of Sam Kitts.
According to a statement released by the company, ICG's senior management team has an average of 23 years experience in the coal industry.
ICG was formed in 2004 after Ross's investor group, WL Ross & Co., acquired the principal assets of Horizon Natural Resources, which included operations in West Virginia.
As of Jan. 1, ICG owned about 315 million tons of metallurgicalquality coal reserves and 572 million tons of steam coal reserves, according to documents on file with the SEC. The reserves are in West Virginia, Maryland, Kentucky and Illinois. In 2004, the company sold 18.4 million tons of coal, reports say.
Ross has earned the nickname "King of Bankruptcy" for his knack of acquiring and turning around bankrupt companies. Prior to his recent coal ventures, Ross created International Steel Group from the remains of LTV Steel, Acme Steel and Bethlehem Steel. In 2004, ISG acquired then-bankrupt Weirton Steel before ISG merged with Mittal Steel earlier this year.
Macarthur tips net profit boost
Macarthur Coal Ltd has increased its 2004/05 net profit guidance to between $55 million and $58 million.
The company said the improvement from the February forecast of between $48 million and $55 million was due to increased tonnage shipped in the June quarter.
In its June quarterly report the Queensland-based coal exporter said in 2004/05 it recorded five million tonnes in sales, up 30 per cent on the previous year. Shipments from its Coppabella and Moorvale mines exceeded targets.
Macarthur said the highly profitable metallurgical coal market remains robust and the sales outlook was positive.
Czech architect of Vitkokice privatization changes guard
The deputy minister for industry and trade, Martin Pecina, has been nominated to head the countrys Office for the Protection of Economic Competition, or HS.
Pecina accepted the nomination the same day and resigned from the Social Democrats a day later, in accordance with laws prohibiting a HS chief from being affiliated with any political party.
Pecina played a key role in the privatization of Vkokice Steel, which was recently sold to Russian Steel group EvrazHolding. He is also chairman of the board of the state-run Osinek company, the owner of Vokovice, and sits on the boards of both the ČEZ power company and the electrical distribution company ČEPS.
Fitch upgraded EvrazHolding securities bonds to BB- from B
Fitch Ratings upgraded EvrazHolding securities bonds to BB- from B, Agency said. It was assigned stable outlook to the ratings.
EvrazHolding is one of the biggest participants of the Russian steel and mining markets. EvrazHolding comprises Niznetagilsky, West-Siberian and Novokuznetsky metallurgical integrated plants.
In 2004 the enterprises of the Holding run downed the production of rolled metal by 1.2 percent to 12.23 million tons. The net profit of EvrazHolding in the first half of current year totaled US$508.87 million, revenue - US$2.84 billion.
ThyssenKrupp steel arm has spent 60 mln eur to tackle pollution
ThyssenKrupp AG said its steel arm has invested 60 mln eur in anti-pollution measures since 2001 to comply with agreements with the city of Duesseldorf and nearby municipalities.
Under the terms of the most recent agreement, signed today, ThyssenKrupp has committed itself to reducing the amount of fine dust particle emissions in the Duisburg North region.
The steelmaker said this agreement expires at the end of 2007.
S.African workers call strike at Highveld Steel
More than 2,000 workers from at least two unions will go on strike at South Africa's Highveld Steel & Vanadium starting on Wednesday after deadlocked wage talks, union officials said on Monday.
The National Union of Metalworkers of South Africa (NUMSA) and Solidarity trade union workers at Highveld will take part in the strike, officials said.
Highveld is majority-owned by mining giant Anglo American
The NUMSA said it rejected a 5.5 percent wage increase offer from Highveld after demanding an 8 percent increase. Highveld is the country's second-biggest steel maker and the world's biggest producer of vanadium.
3% Of All World Capital Construction Concentrated in China
Research and Markets has announced the addition of Chinese Concrete Formwork Special Survey - 2004 to their offering
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This report was made in cooperation with several Chinese businessmen and officials in the sphere of the Chinese building and construction industry.
All information sources have the same opinion - today China is the world's biggest construction site and this will hardly be repeated in the future. Today no less that 3% of all world capital construction is concentrated in China.
The report talks openly and in detail about the construction market in China and the situation in the formwork market: formwork systems, engineering, formwork materials and elements in China. The report describes the specificity of the Chinese market, peculiarities of construction equipment and services distribution in China, peculiarities of purchasing and outsourcing of the formwork elements and materials in China.
It offers methods of overcoming the difficulties in the fields of foreign construction equipment promotion, business organization in China, control of supplies of Chinese equipment and ensuring the quality of products. It contains information about Chinese and foreign producers of the formwork systems and about Chinese producers of formwork elements and materials.
Outokumpus likely to miss Q2 & H1 results
Sluggish Stainless steel world market resulting in production cuts in 2Q and size of cuts expected in Q3, Outokumpu is unlikely to meet Q1 guidance of H1 comparable operating profit at same level, or somewhat lower, than '04, and expects comparable EBIT 20% below H1 '04 figure.
TopAcrinoxs NA Stainless to Invest $50M for Expansion of Ghent Plant
North American Stainless has announced plans to add a new electric arc furnace at its Ghent facility. The project represents a $50 million investment.
By utilizing the existing furnace on a standby basis and replacing it with a newer, more modem furnace for primary production, the investment will allow North American Stainless to improve the recycling of scrap material and increase overall melting efficiencies.
North American Stainless. as part of the Acerinox Group, is owned by Acerinox, S.A. of Madrid, Spain and represents the largest Spanish investment in the United States. Since 1990, Acerinox has invested more than $1.3 billion in its Kentucky facility. The Acerinox Group is the third largest stainless steel producer in the world and consists of factories and service centers across the globe.
Arch Coal profit falls
Mining company Arch Coal Inc. on Monday reported a smaller net profit for the second quarter on rail disruptions nationwide that hampered shipments from its mines.
Arch reported a net profit available to common stockholders of $1.7 million, or 3 cents per share, compared with a year-earlier profit of $10.7 million, or 19 cents per share.
The disruptions in rail service in both the eastern and western United States significantly hurt the company's ability to ship coal to its customers. Much of the problem stems from heavy rain in May that caused train derailments in the Powder River Basin (PRB) in Wyoming and Montana.
The company has said difficulties shipping coal could result in shortages at U.S. power plants, and Arch said maintenance and repair work currently under way in the PRB could tighten the market further.
Glencore loss stokes fire of Centennial's bid for Austral
Centennial Coal has been given fresh hope that it can march to full ownership of Austral Coal under its takeover bid. Its improved prospects came with the Takeovers Panel's rejection of an appeal by international commodities trader Glencore.
Glencore was appealing against a finding of "unacceptable circumstances" surrounding its failure to adequately disclose its acquisition of a direct and indirect 14 per cent Austral stake - more than enough to stall Centennial at a little more than 85 per cent of Austral.
Centennial managing director Bob Cameron said the rejection of Glencore's appeal increased the likelihood that Centennial would achieve 100 per cent ownership of Austral.
Chinese industrial firms make higher profit in first half
Profit at Chinese industrial firms climbed 19% in the first half from a year ago as sharp increases in the coal and oil sectors made up for weak earnings for makers of building materials and vehicles.
Chinese industrial firms, dominated by state giants such as PetroChina Co Ltd and Baosteel Iron & Steel Co Ltd, earned total profits of 626.6bil yuan (US$77.25bil) in the first half, the National Bureau of Statistics said in a statement yesterday.
Many analysts are sceptical of the industrial profit data, saying the state-sector results are driven by big monopolies that benefit from government protection. Yet, they also say the figures give a rough guide to chart trends of profitability.
The first-half profit growth accelerated from the 15.8% rise in the first five months of this year and was the fastest cumulative growth this year.
But it was lower than a 42% jump in the first half of 2004 and a 38% rise in the whole of last year.
Most analysts expect profit growth to slow gradually in the second half of this year because profit margins have been squeezed by strong increases in raw material costs and relatively suppressed price rises in most consumer products.
Maverick Tube second-quarter earnings down
Oil well pipe maker Maverick Tube Corporation on Monday posted lower second-quarter earnings on weak demand for its electrical conduit products.
Net income was $38.7 million, or 89 cents per share, compared with $58.0 million, or $1.36 per share, in the year-earlier quarter, the St Louis-based company said.
Maverick Tube said sales from continuing operations fell to $405.4 million in the second quarter from $417.1 million in the first quarter. Sales of energy products recorded in the second quarter were $319.6 million, down from $333.6 million in the first quarter.
Mexican Hylsamex Q2 net profit falls 28% to US$89mn
Mexican iron and steel company Hylsamex reported a net profit of US$89mn in the second quarter of 2005, a 28% reduction on same-period 2004
Hylsamex's sales volume grew during the quarter courtesy of higher domestic sales and exports. Overall shipments rose 5% to 824,500t during the quarter compared to 2Q04.
But the cost of sales rose 17% to US$550/t during the same period. Ebitda fell 32% to US$150mn, while free cash flow for the quarter was US$87mn.
The company said it was pleased with its results and had succeeded in increasing its cash flow despite lower steel prices.
"In a high-cost environment for the global steel industry, Hylsamex continued to capitalize on its vertical integration and its modern production plants in order to keep costs relatively stable," the company said.
Hylsamex is in the process of being taken over by Buenos Aires-based industrial giant Techint Group. In May, Hylsamex's parent company Grupo Alfa accepted an offer from Techint for its remaining 42.5% share in Hylsamex.
LEO Steel seeks extension for tax credits to build mills
LEO Steel Inc. is seeking an extension of the state's preliminary approval of tax incentives to build hot- and cold-rolled steel-processing mills that would bring about 270 jobs to Jefferson Riverport International.
The $402 million project would consist of a 300,000-square-foot hot mill and a 400,000-square-foot cold mill. The mills are slated for land off Cane Run Road near the Ohio River. Louisville Metro Properties owns the 81-acre tract, but LEO has an option to buy the property, according to LEO president Matt Botsford.
