July, 28 2005
Ratan Tata opposes iron ore exports
Tata Steel Chairman Ratan Tata today said that iron ore which is a valuable resource, should not be allowed to be exported to other countries. "An effort should be made that we do not give away for operations in other countries, any valuable resources like iron ore " Tata said, addressing the annual general meeting here.
To a shareholder's query on POSCO setting up a plant in India, he said POSCO project does envisage export of iron ore and it was for the government to decide. He said the companies should not be allowed to export iron ore in excess of what they consume.
The per capita consumption of steel in the country is extremely low and new plants would only help in meeting the demand, he said.
To a query on Mittal Steel, he said the Mittal Group has planned a greenfield plant but it would be departure from its model of raising capacity through acquisitions only, he said adding, it was just a proposal to set up a plant.
Stating that steel prices were softening, he said the company would do its best to protect the margins. Softening of steel prices were due to global dynamics and not due to fall in domestic steel demand.
On the Bangladesh project, Tata said the company could raise funds at appropriate time for local investors and multilateral agencies such as the Asian Development Bank.
Investments shift to Jharkhand from Orissa
Jharkhand seems to be feeding on this lack of wisdom on the part of Orissa politicians. The State is accepting every possible investor in the steel sector with garlands. Believe it or not, not less than five companies who have entered agreements with Orissa to set up steel plants in the State have also signed MoUs with Jharkhand government.
The companies are Monett Steel, MML Steel and Power, Sunflag Iron Company, Essar Steel and Jindal Steel. While Monett proposes to come up with Rs 1400 cr investment, the investment proposals of other companies are MML (Rs 2000 cr), Sunflag (Rs 937.61 cr), Essar (Rs 4258 cr) and Jindals (Rs 11,500 cr).
Of these, three companies Monett, MML and Sunflag are understood to have made up their mind to leave Orissa for stringent mining lease clauses, non-serious attitude of the State Government in providing land and other facilities and above all, the anti-industry mood of the political class.
ISeveral investors expressed dissatisfaction over the dearer policy of providing iron ore through Orissa Mining Corporation. They pointed out the OMC was charging rates higher than the market rate. Not a single company, which has already commissioned production, has been granted mining lease as had been assured. The companies expressed doubts over the intention of Orissa Government.
Tata Steel 1st-Qtr Profit Rises 24%
Tata Steel Ltd., India's second- biggest steelmaker, had a less-than-expected 24 percent gain in first-quarter profit
Net income rose to 9.24 billion rupees ($213 million) in the quarter ended June, from 7.45 billion rupees a year earlier, the company said today.
Profit growth may slow further after a surge in world steel production led by China which forced Tata Steel to lower prices by 3,000 rupees a metric ton on July 1. The company may lower rates again next month to match cheaper imports.
Tata Steel sold 854,238 tons of the metal in the quarter, or 3.3 percent less than a year ago. Sales have fallen in spite expanded blast furnace capacity.
Mecon designs pollution free coke oven
Mecon the biggest engineering consultant, has set a new yardstick by designing and supervising a pollution-free coke oven complex at Neelanchal Ispat Nigam Limited in Dhubri, Assam.
The coke oven complex has met successfully all the stringent parameters set by the Union ministry of environment and forest in pollution control measures, a Mecon spokesperson said on Tuesday.
Coke oven is considered to be one of the most polluting units of a steel plant, he said. A one-year trial, after the July 2004 commissioning, found the pollution indices for coke oven doors, charging lids, charging omissions, and other such parameters to be well within the limits prescribed by the Central Pollution Control Board, he added.
When emission from coke oven chimney was measured for sulphur oxide, nitrogen oxide and dust among others, these were found to be will within the prescribed norms, thus making this unit an emission-free installation, said the spokesperson and added, There was absolutely no coke quenching emission due to installation of a coke dry cooling plant.
Usha Martin charts Rs 462-cr expansion
Usha Martin has chalked out a Rs 462-crore expansion plan to step up speciality steel-making capacity, develop coal and iron ore mines and generate power. The company board has given an in-principle approval for the capex and has appointed ICICI Securities as merchant banker to work out the financing model.
The entire expansion will take place in phases over the next three years.
The company will spend Rs 400 crore to expand the capacity of speciality steel to half-a-million tonnes from 340,000 mt at present. The capital expenditure will also include mining of iron ore and coal and a 15-mega watt co-generation power plant. The company will start developing the iron ore and coal mines in Jharkhand by October 2005 and March 2006 respectively.
The remaining Rs 62 crore will be spent on subsidiaries to expand wire and wire rod manufacturing capacities at home and abroad.
After the mines are developed, we will be fully integrated from mines to steel followed by wire and wire rope as finished products, joint managing director P. Bhattacharya said. In future, the company will strengthen its presence in the automotive market with half of the speciality steel catering to this sector.
Usha Martin will set up a greenfield plant in the United States. The company is looking at a 10,000-tonne capacity there to service the high-end market, Rajeev Jhawar said.
We will work out the details in another three months, he added. The company will invest about $5 million for the same. The US is the largest wire rope market with an annual requirement of 220,000 tonnes. At present, Usha Martin exports 10,000 tonnes to the US. We intend to become the largest player in the world, he added.
Ashok Leyland to import steel from Posco
Ashok Leyland Ltd., India's second- biggest maker of trucks and buses, may buy steel from South Korea's Posco for the first time in two years and seek price cuts from local suppliers to slash production costs.
Ashok Leyland has also asked Tata Steel Ltd., India's second- biggest steelmaker, to cut prices for auto steel.
Ashok Leyland expects to complete price negotiations by August.
Thermax plans Rs100cr expansion
Thermax Ltd, a player in the energy and engineering management segment, is all set to expand its manufacturing capacity and engineering resources to meet the growing demand in the domestic market. For this, the company has earmarked Rs 100-crore investment which would spread over the next 24 months
About 75 per cent of the investment would be utilised in enhancing manufacturing capacity in the boiler and heater group. The company would be ramping up its existing facility in Chinchwad and would be setting up a new greenfield project outside the State. The new plant would be on the coastal belt so as to give easy access for the transport of heavy consignments.
The new as well as the upgraded facility would be manufacturing drums, membrane panels and also parts that are essential for boilers and heaters. The investment would be partly from internal accruals and partly loans.
Ex Steel minister opposes Naveen for POSCO
Former steel minister Mr Braja Kishore Tripathy, the leader of the BJD in Lok Sabha, has continued to vehemently oppose the controversial Posco steel plant project.
Mr Tripathy is said to have lashed out against the deal and the state government. Sources said Mr Tripathy was bitterly critical of the government for what he called the total lack of transparency in the deal. Mr Tripathy also snubbed a senior BJD functionary and member of the HMS who tried to intervene, claiming the decision was democratically taken.
It may be recalled that Mr Tripathy was among the first few to raise their voices against the Posco project proposal and had written to the chief minister in this regard.
With Mr Naveen Patnaik facing flak from all quarters the BJP, the entire Opposition and even a section of his own party the tirade launched by Mr Tripathy is bound to fuel further trouble for the chief minister in the not so distant future.
Orrisa CM agrees to BJD-BJP panel meet
Mr Naveen Patnaik today conceded to the BJPs demand for convening a joint coordination committee meeting of the ruling coalition partners to discuss the various contentious issues, including the Posco deal.
Chief minister Mr Patnaik told reporters that the coordination committee meting will be held on 30 July. Asked whether the Posco issue would be discussed at the meeting, he said: Whatever item comes up, it will be taken up for discussion.
His party secretary general and panachayati raj minister, Dr Damodar Rout, took on the Opposition today and described the Left parties objections to Posco as hypocritical. Countering the Lefts view that Orissas natural resources would be looted if the Posco plant was set up, he claimed that the state would rather be benefited by value addition of iron ore, in which case more than 48,000 unemployed youths would get employment directly and indirectly. Three new cities would come up and infrastructure like railway and road networks would be developed at a cost of Rs 4,000 crore, he added.
Dr Rout alleged that the Tisco steel plant at Gopalpur got shelved and Utkal Aluminas project could not take off due to the agitations spearheaded by the Left parties.
Tata lease talks begin and stumble
The assurances of chief minister Arjun Munda to renew the Tata Steel lease came to a naught today as a formal meeting between the officials of the state government and Tata Steel representatives to settle the lease issue did not show much result.
Though the two parties agreed on several clauses of the new lease agreement draft being prepared by the East Singhbhum district administration, several vital clauses remained unsolved.
Both parties decided to meet again tomorrow to resolve the deadlock. Singhbhum-Kolhan commissioner Chintu Nayak who chaired the important meeting said the state government and the Tata Steel representatives would meet again tomorrow to work out an amicable solution.
Posco cuts production
South Korean steel giant POSCO said it would cut production by 300,000 tons this year to reduce inventories and prevent a sharp price fall. The world's fifth-largest steel producer said it was ready to cut production further if steel demand remained low.
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"This decision is designed to stabilize prices and market demand and supply conditions. If the market continues to experience volatility, then we can take further actions," POSCO said in a statement.
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A surge in imports of Chinese steel has weighed on already dull domestic demand, resulting in a sharp increase in domestic steel inventories, it said.
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South Korean steel imports jumped 21 percent year-on-year to 5.7 million tonnes in the first half, with Chinese products accounting for about 40 percent.
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Domestic inventories rose to two million tonnes at the end of June from the average 1.3-1.5 million tonnes earlier this year.
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POSCO said it would offset any negative impact from the output reduction by focusing mainly on high-end steel products.
BHP Billiton Q4 iron ore output up 23%
World number one miner BHP Billiton Ltd. posted a 23 percent rise in quarterly iron ore production as its expanding Western Australian operations boosted output to meet strong China demand.
But copper production dipped one percent as output from the recently purchased Olympic Dam mine in South Australia was offset by the impact of an earthquake on the Cerro Colorado mine in Chile and regional unrest which hit output at Tintaya in Peru.
BHP Billiton took control of WMC Resources Ltd. in early June after bidding A$9.2 billion and its fourth-quarter production report included an initial one-month contribution from WMC's copper, nickel, fertiliser and uranium operations.
BHP Billiton said crude oil and condensate output for the quarter was up 5 percent on a year ago due to production from new projects.
Coking coal output increased 3 percent, energy coal production rose 6 percent, while diamond production fell 21 percent. Aluminium output fell 4 percent, but nickel production leapt 60 percent, boosted by WMC's contribution.
BHP Billiton is due to release its full results on August 24 and is expected to report a sharp increase in annual profit before one-off items, due to soaring prices for key commodities such as oil, copper, iron ore, coal and nickel.
The company said on Thursday that it had achieved annual production records in some commodities including iron ore, coking coal, aluminium and nickel in a strong demand environment.
Brazilian Steel output dips by 1.2% in H1
Crude steel production in Brazil decreased 1.2% in the first half of 2005 compared to 2004's record results as higher interest rates crimped consumption, Brazilian steel association (IBS) president Luiz Andre Rico Vicente told
Output sank to 15.9MT in 1H05, down from 16.1Mt in 1H04 as high interest rates caused weakness in the civil construction and farm machinery sectors, Vicente said. "There was contraction in the sectors which are large steel consumers."
The government's efforts to control inflation by keeping interest rates high "attacked every sector in a general way and there were small recessions," he added.
Apparent domestic consumption of steel products was 8.7Mt in 1H05, down 2% from 1H04 and 8% from 2H04. Consumption of flat steel grew 3.8% to 5.5Mt in 1H05 compared to 1H04 on strong production at automakers, while long steel consumption tumbled 11% to 3.2Mt compared to 1H04.
In addition there were scheduled maintenance stoppages at several steel mills including steel slab and hot-rolled coil maker CST and long steel maker Belgo-Mineira, Vicente said.
For 1H05 flat steel production declined to 6.9Mt, down 1.8% from 7.1Mt in 1H04. In June flat steel output was off 5.9% to 1.1Mt. Long steel production decreased 3.5% in 1H05 to 4.2Mt and output was 677,600t in June, down 9.2% from 746,000t in June 2004.
But the weak domestic market for long steel products yielded a surge in exports as Brazilian producers sought outside markets. Exports of long steel jumped 50.3% in 1H05 to 6.3Mt.
Overall steel exports, including flat and long steel, climbed 1.2% to 6.3Mt compared to 1H04. Higher steel prices pushed the value of exports up 51% to US$3.5bn, Vicente said.
Production dropped across the board at Brazil's top steelmakers in 1H05. Usiminas' output dipped 1.7% to 4.4Mt. Gerdau Acominas decreased 0.7% to 3.6Mt, while CSN dropped 7.1% to 2.5Mt.
IBS expects domestic demand for steel products to pick up fourth quarter as historically high stock levels start to normalize, according to the president.
"Our expectations are for an increase exports in the third quarter and a recovery in the domestic market in the fourth," Vicente said.
Steel exports will continue to increase third quarter as the domestic market keeps contracting. "We expect a recovery in the fourth quarter when distributors' stocks reach normal levels."
Stelco likely to sell three units to Mittal Steel
Stelco Inc. is close to selling three non-core subsidiaries to Mittal Steel Co. in a deal that would be key to the legally insolvent steel maker's plan to raise new capital.
Wire products manufacturers Stelwire Ltd. and Stelfil Lt and mini-mill steel maker Norambar Inc. are up for sale for a price in the range of $175-million, sources close to the discussions said.
These units along with mini-mill steel company AltaSteel Ltd. were put up for sale because they don't fit into what Stelco management wants to be its new core business, centred on its main Hilton Works and Lake Erie Works mills in Hamilton and Nanticoke, Ont.
The sale of non-core assets is part of a restructuring plan submitted to the Ontario Superior Court earlier this month and now the subject of negotiations between Stelco management and the company's various stakeholders.
Part of the proceeds from the sale of the subsidiaries would go toward a $200-million initial payment Stelco intends to make on its $1.3-billion pension solvency deficiency, which the company cited in January, 2004, as a key reason why it sought -- and was granted -- protection from creditors under the Companies' Creditors Arrangement Act.
Magnitogorsk Iron & Steel Works posts results for H1
In the first half-year of 2005, net profit of Magnitogorsk Iron and Steel Works (MMK) calculated according to the Russian business accounting standards grew by 15.9 percent to RUR17.4bn (approx. USD606.6m).
Sales proceeds went up by 28.4 percent to RUR74.43bn (approx. USD2.6bn), profit before tax increased by 14.8 percent to RUR22.65bn (approx. USD789.7m).
During this period MMK bolstered rolled metal output by 3.3 percent to 5.24m tons compared with the same period last year. Cast iron production declined by 5 percent to 4.6m tons, steel output - by 2.9 percent to 5.48m tons, coke output by 5.3 percent to 2.72m tons, and agglomerate output by 3 percent to 5.2m tons.
Russia ups iron ore exports 4.3% in H1
Russia increased iron ore exports 4.3% year-on-year to 9.98 million tonnes in January-June 2005, Rudprom, the agency that collates statistics about ore producers, told Interfax.
Russia exported 3.6 million tonnes of iron ore concentrate, down 15.8%, 392,000 tonnes of sintering ore, up 40.5%, 5.5 million tonnes of pellets, up 22.2% and 466,000 tonnes of briquettes, down 9.7%.
Iron ore exports to non-CIS countries came to 8.37 million tonnes or 83.9% of total exports, including 2.78 million tonnes of concentrate, 5.28 million tonnes of pellets and 307,000 tonnes of briquettes.
Russia exported 1.5 million tonnes of iron ore to Ukraine, including 229,000 tonnes of pellets and 770,000 tonnes of concentrate.
Russia raised iron ore production 1.5% to 48.44 million tonnes in January-June 2005.
Evraz to Restructure
Steel manufacturer Evraz Group said it would create two business divisions as it seeks to manage operations more effectively.
The corporate division, which will be run by Alexander Frolov, will oversee strategy, finance, communications, human resources and information technology, Luxembourg-registered Evraz said Wednesday in a statement.
The operations division will be led by Valery Khoroshkovsky and will be in charge of steel production, mining, trading and shipping, the company said.
Tanzanian Pollution board orders steel firm to halt operations
The National Environmental Management Council (NEMC) yesterday suspended operations at Dar Es Salaams Metro Steel Mills Ltd due to environmental pollution. NEMC issued the directive under the newly enacted Environmental Protection Law.
Metro Steel Mills Ltd was advised to use alternative machinery that would reduce the heavy emission of carbon monoxide into the surrounding environment and thus reduce air pollution, but they have failed to heed the call and decided to operate the plant at night causing pollution that had affected people living near the factory.
Many manufacturers had been advised to apply environmental audits instead of Environmental Impact Assessment (EIA) because the factories were built without EIA being carried out.
Steel Industry in China
Prices on the Chinese domestic market have slumped by about 25 per cent in the first five months of this year whereas production is up 32 per cent from the same period last year, with the country's mills churning out nearly 165 million tons of steel in the first six months.
The central government's stringent measures to slow the property and investment sectors to head-off inflation have cut into the growth of steel demand. As the trend develops, over-production may result in great damage to steel industry
China's steel mills, which have logged an annual growth of 20 per cent since the beginning of the century, produced 272 million tons of crude steel last year, about a quarter of the world's total, keeping the country the largest steel producer in the world for eight years in a row.
The steel has been produced by about 1,000 mills scattered across the country, only 15 of which had an annual crude steel output of more than 5 million tons last year a level that can ensure a mill has economies of scale.
Many of the mills are small and reliant on out-dated technology, wasting large amounts of energy and resources and producing serious pollution.
According to latest statistics, some 80 million tons, or 20 per cent of China's steel output, is produced by small or medium-sized smelters which do not meet the most recent standards.
China still needs to import high-alloy steel, which it cannot produce domestically because it lacks the necessary technology.
Large but inefficient, the country's steel industry has led to a number of derivative problems including weak competitiveness of individual enterprises, excessive investment, inappropriate industrial distribution, low quality of products and serious pollution.
Despite its ban on foreign control of domestic mills, it is clear the policy package is focused on improving competitiveness and efficiency in the sector.
According to the plan, exports of low-end, energy-intensive products, such as steel alloy, pig iron, coke and steel scrap, will be discouraged. Export tax rebates on such products will be gradually reduced or wiped out.
The blueprint envisions that through merger and acquisition (M&A), the country's 10 largest mills will account for 50 per cent of steel output by 2010 and 70 per cent of nationwide production by 2020. It is expected that two industry giants with an annual capacity of more than 30 million tons could be created by 2010 through M&As.
To accelerate their development, steel complexes are being asked to concentrate in the country's developed coastal regions, where steel demand is strong and ports are more easily accessible.
To save resources, expansion will be curtailed in northern China which lacks adequate water supplies, and northwestern China, where iron ore is scarce.
The State, according to the plan, will promote production of high-end, low-cost and less polluting steel products.
By 2010, steel mills are required to consume no more than 0.73 tons of coal and 8 tons of water for each ton of steel produced, and by 2020, 0.7 tons of coal and 6 tons of water for each ton of steel.
The effectiveness of the development plan will, to a large extent, hinge on the will of local officials to make mills cut production if they cannot meet the requirements of the plan. At a time when the interests of local governments and the country's heavy industry manufacturers are closely linked, it is unclear how fast the new industrial plan can be fully implemented. Another factor will be State banks, whose local branches are often "blackmailed" by local governments and enterprises. Bank branches that lend heavily to local enterprises will not be happy to see any closures or mergers that negatively affect their balance sheets.
The new industrial blueprint, nonetheless, is a good start to properly manage the disorderly domestic steel industry and set it onto the right development track. Central authorities need to display the wisdom and political will to ensure the development plan is unswervingly implemented.
PSCI opens steel distribution outlet in Connecticut
The Pennsylvania Steel Co. Inc. said it opened its first Connecticut distribution center in Naugatuck earlier this month because the Valley is the state's manufacturing center with a couple hundred very good potential customers within 20miles. The facility will distribute the company's products throughout southern New England.
The company will maintain its other facilities in Pennsylvania and New Jersey.
Steel Industries Inc. announces $8 Million Expansion
Steel Industries Inc., an Ameri-Forge Group Company manufacturing open die forging and seamless rolled ring near Detroit, Michigan, announces an $8 Million capital expansion for 2005-2006.
A new state-of-the-art heat-treating complex, additional CNC machining equipment and other ancillary processing equipment are being added to enhance and expand their product offering. Steel Industries has experienced significant growth over the past few years through their commitment to providing additional forging and post-forging, value-added processes, for their customers.
Hoyt Lakes iron processing plant gets key permits
State pollution regulators gave a green light Tuesday to an iron processing plant in Hoyt Lakes over the objections of environmental groups that urged more study of potential mercury emissions.
The Minnesota Pollution Control Agency board voted unanimously to grant key water quality and air emissions permits for the proposed Mesabi Nugget processing plant, which backers tout as a next-generation leap for the mining industry.
The $160 million facility, which will take up to two years to build would be built at the site of the dormant LTV Steel Mining Co. to annually produce 600,000 metric tons of iron nuggets, which are a more pure form of iron than taconite pellets which can more easily be turned into steel using a new processing technology.
Steel prices push up Renault costs
French car maker Renault has reported a record net profit for the first half of 2005 and reiterated its full-year targets despite operating earnings that slipped nearly 15%.
Net profit shot up to 2.2 billion, an increase of 52% from the same period last year. Renault's Japanese partner Nissan contributed 911m to the net profit, an increase of 1.9%, as well as an exceptional 450m from the transfer of its pension funds to the state.
Operating profit at the French car maker fell, however, to 943m, in line with analysts' forecasts. Higher steel prices accounted for around 90m in higher operating costs.
Renault stuck by forecasts for a stable market share in western Europe as well as for steady growth outside its core region, driven by the Renault Samsung joint venture and by the cut-price Logan model at Dacia in Romania.
Pakistans Steel & Scrap metal import increase by 94 percent
Due to the increase in the construction activities in the country during last fiscal year there has been 94 percent increase in the import of steel and iron scrap metal while ready the import of ready steel has increased by 70 percent.
According to the department of statistics steel and iron scrap metal worth 200.70 million dollars was imported last year as against 90.35 million dollars one year back.
Steel distributor Russel Metals Q2 profit halved to $23.5M
Steel price decreases cut second-quarter net income by more than half at Russel Metals Inc. and it earned $23.5 million in the April-June period, down from a year-ago profit of $50.4 million due primarily to declining margins.
Revenue for the quarter was $644.8 million, up 10 per cent from $588 million a year ago, "primarily generated by the energy tubular products segment due to higher volumes related to oilsands projects in northern Alberta," the company stated.
Cost of sales and operating expenses swelled 22 per cent, to $605.6 million from $497.2 million.
Russel said steel price decreases generated inventory holding losses of $18 million, versus gains of $27 million in the second quarter of 2004.
Russel also stated that the steel industry will remain intensely cyclical "until excess and obsolete capacity is permanently removed from the system."
He added: "Consolidation without rationalization is not a panacea for the steel producers as these past six months have proven. The extreme cyclicality we have seen over the last 18 months has been supply-side-generated, as true demand has remained relatively stable.
Dofasco's Q2 profit sags to $59.2M from year-ago $110.5M
Second-quarter profit at steelmaker Dofasco Inc. dropped to $59.2 million from a year-ago $110.5 million, widely missing analysts' estimates as sales remained flat.
The Hamilton-based steelmaker also warned that third quarter results will be significantly below this quarter, as steel prices fall and cost pressures mount.
Prices soared last year, driven by demand from China. That country is consuming massive amounts of the metal for everything from cars to bridges, spurring many steelmakers around the globe to post record profits last year.
The pricing we're seeing today is considerably below the average in the second quarter," he said, citing current prices of about $400 to $425 US per ton, well below the record prices of nearly $800 steelmakers garnered last fall. "The pricing that we are seeing today is probably the bottom of the market," Pether said.
Mexico's Imsa net profit falls as operations wane
Mexican conglomerate Imsa posted a 19 percent decline in second quarter net profit on lower operating results and after selling a battery company that had boosted Imsa's revenues in 2004.
Imsa, which processes steel and makes other metal products for the construction industry, said on Wednesday its April-June net profit was 516 million pesos ($48 million), down from 634 million pesos a year earlier.
"The fall in second quarter net profit is the result of lower operating profits and the fact that in the second quarter of 2004 Imsa still had the earnings of Enermex," Imsa said. Imsa sold its battery unit Enermex in mid-2004 to its partner Johnson Controls for $525 million.
Revenues were flat in the second quarter at 9.602 billion pesos and earnings before interest, taxes, depreciation and amortization, known as EBITDA, decreased 41 percent to 891 billion pesos.
"The second quarter showed an improvement over the previous quarter but our operations continued to adjust to the contraction of steel prices combined with raw material prices that are still high," said Imsa's chief executive Eugenio Clariond.
North American Galvanizing & Coatings announces Q2
North American Galvanizing & Coatings, Inc. announced today that sales for the second quarter ended June 30, 2005 were $12,801,000, up 37% from sales of $9,333,000 for the first quarter a year ago.
The Company reported second-quarter 2005 net earnings of $114,000, or $.02 per share fully diluted, compared to net earnings of $106,000, or $.01 per share fully diluted, for the first quarter of 2004.
Sales for the three-months and six-months ended June 30, 2005 increased 37% and 23%, respectively, due primarily to contribution from the Canton, Ohio galvanizing facility that was purchased February 28, 2005. Same plant revenues for the second quarter improved 13% over the second quarter last year, based on an increase in demand from fabricators. Same plant revenues for the first half of 2005 increased 7% over the same period in 2004.
North American Galvanizing is a leading provider of hot-dip galvanizing and coatings for corrosion protection of fabricated steel products. The Company conducts its galvanizing and coating business through a network of plants located in Canton, Ohio; Denver, Hurst (Dallas/Forth Worth), Houston, Kansas City, Louisville, Nashville, St. Louis and the Tulsa area. Hot-dip galvanizing provides metals corrosion protection for many product applications used in commercial, construction and industrial markets.
Mexico ICH Comments on PAV Republic Buy
Mexican steel concern Industrias CH SA said Wednesday the purchase of all the shares of U.S.-based steel maker PAV Republic Inc. was valued at about US$229 million
In the transaction, which was announced Monday, ICH bought a 49 percent stake in Republic, while its Grupo Simec SA unit acquired 51 percent of the company. Its plants have a combined capacity of 2 million metric tons of liquid steel and 1.7 million metric tons of finished steel products.
With the purchase, Simec expects to become the largest producer of special bar steel in North America, with an annual capacity of nearly 3 million metric tons of steel. Republic has six production plants, located in Ohio, Indiana, New York and Ontario, Canada.
Ipsco Inc. nearly doubles Q2 profit at US$126 million
Ipsco Inc., a Canada-U.S. steelmaker, nearly doubled its second-quarter profit to $126 million US as it continued to bask in the glow of last year's steel price boom - but it warned Wednesday that times are changing.
Higher prices on all of the company's products offset a nine per cent decline in shipments, allowing sales to rise to $667 million US from $548 million a year earlier. I
psco's second-quarter average pricing was $830 a ton, including a surcharge, compared with $620 per ton a year ago. However, chief financial officer Vicki Avril told analysts during a conference call that the average selling price in the first quarter of this year was $872.
CEO David Sutherland told analysts "the company believes that end-user demand for steel mill products will remain strong and increase throughout the year." However, he added, "we expect to see some decline in steel prices due to market pressures from buyers and the influence of hot roll-coil price reduction."
During the quarter ended June 30, the company shipped out 803,000 tons of steel. Ipsco, which was founded in Regina in 1956 and has three steel mills and six pipe mills in Canada and the United States,
"We expect increased large-diameter pipe shipments, increased energy tubular shipments and the flow-through of second-quarter scrap purchase price reductions to help offset price declines on our steel mill products and the steel product volume reductions related to the third quarter's planned maintenance," the company said.
Allegheny Technologies announces Q2 results
Allegheny Technologies Inc reported net income for the second quarter 2005 of $91.7 million on sales of $904.2 million as against $26.6 million during Q2 of 2004 on sales of $646.5 million
Net income for the six months ended June 30, 2005, was $152.7 million on sales of $1,783.8 million, compared to a net loss of $23.8 million on sales of $1,224.3 million for the first six months of 2004.
"Second quarter results are another milestone that demonstrates the earnings potential of the transformed Allegheny Technologies. ATI revenue and operating profit reached all-time highs. Cash flow from operations was nearly $65 million even after further investments of over $100 million in managed working capital," said L. Patrick Hassey, Chairman, President and Chief Executive Officer of Allegheny Technologies.
"Robust demand from the early stage recovery of the commercial aerospace market and another strong quarter from our exotic alloys business drove the High Performance Metals segment sales and operating profit to record levels. Our High Performance Metals segment operating margins exceeded 25% of sales.
"Operating margins in our Flat-Rolled Products segment improved to nearly 11% of sales. Our high-value flat-rolled product mix was particularly strong due to demand for our flat-rolled nickel-based alloys, specialty steels, and titanium products from the oil and gas, electrical energy, aerospace, and chemical processing markets. Total flat-rolled shipments were less than the first quarter 2005 due to ongoing service center inventory reductions for certain stainless products.
"We believe our second half 2005 earnings performance will be similar to the first half 2005 earnings performance." Following on, Hassey said, "Demand for our High Performance Metals products is expected to remain robust.
Cleveland-Cliffs second-quarter profit soars
Cleveland-Cliffs Inc. the No. 1 North American supplier of iron ore pellets, said on Wednesday that second-quarter profit tripled as the steel boom kept iron ore prices high.
Net earnings were $99.7 million compared with $32.8 million in the year-ago period, the Cleveland-based company reported.
The increase in net income reflected "dramatically higher" North American sales margins, the company said.
Brinzo said the company was maintaining production targets for the year and would continue to run all operations at or near capacity. Cleveland-Cliffs said it expects North American pellet production to be approximately 37 million tons this year with with Cliffs' share at about 23 million tons
"On the raw material side, the North American industry currently appears to be in a state of equilibrium with regard to iron ore production and consumption by steel mills."
Australia Mount Gibson Posts A$23.6M Pft From Tallering
Australian iron ore miner Mount Gibson Iron Ltd. Wednesday announced a net profit of A$23.6 million from its Tallering Peak mine in its first full fiscal year of operations ended June 30.
Managing Director Brian Johnson said the benefit of a substantial price rise for iron ore on April 1 is reflected in an operating profit for the final fiscal quarter from Tallering Peak of A$12.7 million on ore sales of 415,000 tons, or a profit of about A$30 a ton.
The full fiscal year profit was built on sales of 1.84 million metric tons, which is exported to China, it reported.
Johnson said sales from Tallering Peak are expected to rise to 2.5 million tons this fiscal year and then to 3.0 million tons in fiscal 2006-07 through to at least 2011.
The company also plans to bring forward the start of production from the company's second mine at Mount Gibson to the 2007 first quarter due to a planned rail track upgrade, he said. Production from this mine will start at 1.5 million tons a year, he said.
