August, 18 2005
Caparo group to add six new plants
Mr Swaraj Paul owned UK based Caparo group is planning to add six plants , in addition to four existing plants in India to cater to the needs of Honda, Maruti, General Motors, Ford and Volvo amongst others.
With business interests in steel, auto components and ancillary and movies of late, the Caparo group is today a $1.3 billion group spread across Britain, Spain, US, Canada and India.
Indian steel prices seen up 7 percent from Sept
Indian steel makers are likely to raise prices by up to 7 percent from September in line with a global price rise, and in response to easing inventories and strong domestic demand, industry officials said on Wednesday.
Prices of various grades of hot-rolled steel, the benchmark for the sector, could be increased by between 700 and 1,500 rupees ($16-$23), after a drop of nearly 25 percent in the past quarter. Industry officials said global prices of hot rolled steel coil had risen by $30-40 a tonne in the past two weeks to $470-475 a tonne.
"Demand continues to be strong and I expect some price increase from next month. We will take a call on the price hike at the end of the month," Seshagiri Rao MVS, finance director at JSW Steel Ltd. told Reuters.
A spokesman for the Steel Authority of India Ltd., the country's top producer, said there was a buoyancy in global steel prices that could impact domestic prices. He said the company would review prices at the end of August.
Lalji Dwivedi, president, marketing at Ispat Industries Ltd., said he believed prices had bottomed out and the inventory imbalance had corrected itself. "What is important is that things are looking up once again and not how much we raise prices," he said.
Steel imports into India have fallen after domestic producers cut prices in August, negating any price advantage the imported metal had over locally produced steel.
Tribunal stays Chiriya order in favor of IISCO
The Central Mining Tribunal has stayed the governments order canceling the leases of three Indian Iron and Steel Company (IISCO) managed mining blocks at Chiriya in West Singhbhum district.
On December 15 last year, the government had cancelled the leases of three mining blocks Ajitaburu, Sukri and Jhilingburu on the grounds that IISCO did not apply for the renewal of the same in time. In protest against the decision, IISCO, which has now merged with Steel Authority of India, moved Jharkhand High Court, which admitted the petition in March and ordered both the parties to maintain status quo. Last month, the court referred the matter to the central tribunal directing it to pass an interim order by August 15 and the final judgment within three months.
In its interim order, the one-member tribunal headed by the director of the Union mines ministry, Naval Kishore, pointed out that IISCO would suffer immensely if the leases were cancelled. The company has invested a lot of money in developing Chiriya for mining activities. If no stay order is granted, the company will be subjected to irreparable losses, the tribunal observed before ordering a stay on the cancellation. Kishore said the stay order, issued on August 11, will be in place till the case is disposed of or some other order is issued.
The government has planned to grant fresh leases for the three blocks to private parties keen to set up steel plants in the district and the judgment is surely an embarrassment for the Jharkhand government.
Kamdhenu Ispat eyes 25% share in MP steel bars market
Kamdhenu Ispat Limited has entered in a collaboration with Manwani Industries Limited of Indore which is producing 4,000 metric tonne of steel bars of 8,10,12,16 and 20 mm size every month for capturing a bigger share of local sonstruction demand.
KIL also plans to double its production and install new capacity to manufacture tempore TMT for European technology provider CRM by next year at its Bhiwadi plant in Rajasthan.
KDIL has 17 units spread across the country and will soon start production in Orissa and Tamil Nadu. The company is targeting a group turnover of Rs 900 crore this financial year and production capacity of 3.75 lakh metric tonne this year.
Shyam Steel in expansion mode
Kolkata based Shyam Steel Industries has lined up a Rs 550 crore expansion program for setting up an blast furnace route integrated steel making unit with rolling facilities for producing wire rods, TMT Bars and structural in Jharkhand and Chhattisgarh. The MoU with state Governments is expected to be signed this financial year after clearing the issue of mining lease. The investment in the new venture would be to the tune of Rs 450 crore.
Shyam Steel is also planning 100 crores expansion in existing facilities at Durgapur by setting up a sponge iron unit and captive power plant to produce capacity of 90,000 tonne with lower production costs and better control over the quality.
Shyam Steel has two re-rolling mills in Howrah and an integrated plant in Durgapur. The plants have an annual capacity of 200,000 tonne.
Tungabhadra Holdings acquires Nagarjuna Coated Tubes
Tungabhadra Holdings Pvt. Ltd., company belonging to Yash Birla Group, said on Wednesday that, it has acquired welded steel pipe plant in Medak Dist. of Andhra Pradesh having unique technology of on-line galvanizing, the company which was previously operating under the name of Nagarjuna Coated Tubes Ltd. The plant in Hyderabad is spread-over in 30 acres of land and acquired the same through an auction for a bid price of Rs. 580 lacs. The plant will start production in September 2005 and the product of the company will be mainly exported to Unites States and other Western European countries. Company will be utilizing the full capacity of production by next financial year and will produce about 3000 MT of pipes.
Tungabhadra Holdings Pvt. Ltd., also acquired another plant of welded steel pipe at Mumbai which was then working under the name of Sunlight Pipes for an amount of Rs30mn and with further investment of Rs60mn in plant, machinery and balancing equipment, the capacity of the plant would be 2500 MT per month.
Speaking of this acquisition Baxi, Director, Tungabhadra Holdings Pvt. Ltd., said, This plant is the only one of its kind in India having facility of online galvanizing and would meet increasing demand of special tubings in United States and European markets. With plant fully operational will increase group exports by 25% to 30%."
Mr NK Mathur joins STC Board
Mr NK Mathur has joined the Board of State Trading Corporation of India as Director, (Marketing). Mr Mathur, a Mechanical Engineer from IIT Delhi was Chief General Manager with MMTC and has also worked in Engineers India Ltd (EIL) in various capacities.
Mr Mathur, a renowned figure in International trading and Project management will be particularly useful when STC has diversified its domestic trading activities to function increasingly as an instrument of the trade policy of the Government of India.
STC has recently made forays into many diversified areas of international trade such as import of hydrocarbons, minerals and metals, fertilizers, petroleum, IT products, and export of iron ore, chemicals and drugs. STC is an autonomous organisation functioning under the Ministry of Commerce and Industry
Coal India slips on production target
Coal India Limited (CIL) has failed to achieve the production target during the first quarter of this fiscal. As against a target of 78.31 million tonnes, CIL had produced 76.96 million tonnes. However, coal production achieved in the first quarter of this fiscal is higher than the coal produced in the corresponding period of the previous year. Last year, during the same period CIL had produced 71.60 million tonnes of coal.
While some of the subsidiaries of CIL have suffered shortage in production, others have surpassed the target. Bharat Coking Coal Limited, Central Coalfields Limited and Northern Coalfields Limited have witnessed a shortfall of 1.13 mt, 1.04 mt and 0.56 mt respectively. However, Eastern Coalfields Limited, Western Coalfields Limited and South Eastern Coalfields Limited have produced more than the target.
India to import 14 million tonnes of thermal coal
India will import about 14 million tonnes of coal this fiscal to bridge the shortfall that power utilities are currently facing. Against the requirement of 338 million tonnes for power generation, domestic supplies of coal was only 317 million tonnes leaving a gap of 21 million tonnes which is equivalent to 13.45 million tonnes of imported coal as imported coal is low in ash content and has higher calorific value.
Against the planned imports of 10 million tonnes of coal for power generation, only 4.5 million tonnes was imported in 2004-05 mainly due to high international coal prices. A cess of 3-5 per cent on cost of domestic coal would have been used to compensate importers of coal for the difference between the price of domestic coal at mine mouth 3.76 dollars per million kilo calories and imported coal CIF price of 14 dollars per million kilo calories.
The Inter-Ministerial Energy Coordination Committee, headed by Prime Minister Manmohan Singh discussed the situation of coal shortage that power companies are facing and the policy options needed to increase coal supply
As many as 19 thermal power stations are currently facing coal shortage. This includes state-run National thermal power corp's plants at Talcher, Korba and Ramagundam besides others. NTPC alone will import about 4 million tonnes of coal this fiscal. The rest would be imported by various state electricity boards and private companies like Reliance.
Wuhan Steel net quadruples on asset buy
Wuhan Steel, China's third largest steelmaker, based in the central industrial city of Wuhan, has announced that their net profit quadrupled in H1 after it bought assets from its parent company. The net profit in the first six months of the year soared 346 percent to 3.15 billion yuan (US$389 million), up from 704.87 million yuan in the year-ago period.
Wuhan Steel Group completed an asset buy, from their parent company on June 1st 2004 after raising US$1.1 billion via a share sale, which included three smelters, two production lines and a raft of other assets. The purchase boosted the capacity to 10 million tons annually.
Wuhan Steel expects net profit to rise more than 100 percent on year in the January to September period.
Evraz Group announces May 2005 operations results
Evraz Group, one of Russias leading steel production and mining businesses with operations mainly in the Russian Federation have announced operational results for the month of May and the 2005 year-to-date.
During May 2005, the production of hot metal was 1.037 million tons as against 0.976 million tons in May 2004 recording a growth of 6.3%, the production of steel was 1.216 million tons as against 1.160 million tons in May 2004 an increase of 4.8% increase and the production of rolled steel rose to 1.064 million tons as against 1.012 million tons in May 2004, a 5.2% increase.
During Jan-May 2005, the production of hot metal was 5.012 million tons as against 4.705 million tons in Jan-May 2004 recording a growth of 6.5%, the production of steel was 5.877 million tons as against 5.598 million tons in Jan- May 2004 an increase of 5% increase and the production of rolled steel rose to 5.285 million tons as against 4.981 million tons in Jan-May 2004, a 5.6% increase.
Evraz is one of the largest vertically-integrated steel and mining businesses with operations mainly in the Russian Federation. In 2004, Evraz produced 13.7 million tonnes of crude steel. Evrazs principal assets include three of the leading steel plants in Russia: Nizhny Tagil (NTMK) in the Urals region, and West Siberian (Zapsib) and Novokuznetsk (NKMK) in Siberia. Evraz Groups fast-growing mining businesses comprise the Kachkanarsky (KGOK), Evrazruda (acquired in March 2005) and Vysokogorsky (VGOK) iron ore mining complexes and NeryungriUgol coal company and an equity interest in the Raspadskaya coal mine. The mining assets primarily supply Evraz Groups steelmaking operations, enabling the company to be a vertically-integrated steel producer, limiting its exposure to fluctuations in the prices of key raw materials. Evraz obtained over 70% of its iron ore requirements from KGOK, Evraz Ruda and VGOK in 2004 and also obtains the majority of its coking coal from Raspadskaya and other affiliated producers. Evraz also owns and operates the Nakhodka commercial sea port, in the Far East of Russia, which facilitates access to Asian export markets.
Brazilian Usiminas plans one off dividend payment
Brazilian steelmaker Usiminas is planning a one-off dividend payment for mid-September announced Mr Paulo Penido, Usiminas's finance and investor relations directoras the company's debt is at a very "comfortable level" with debt-to-Ebitda ratio of 0.4 times and cash flow of $693mn in the second quarter, 27% more than in the same period last year.
Brazil's 2nd-largest steelmaker, with plant in Ipatinga, Minas Gerais State and together with flat steelmaking subsidary Cosipa, Usiminas has installed capacity of 9.5 million tons per year.
Japan's Kanematsu to sell US unit to Sumitomo group
Trading company Kanematsu Corp said it has agreed to sell its US-based affiliate to the Sumitomo group as part of its restructuring measures. Under the agreement, KG Speciality Steel Inc, a wholly-owned subsidiary of Kanematsu USA, which is 100 pct owned by Kanematsu Corp, will be sold on Sept 1, Kanematsu Corp said in a statement.
Stalexport's Q2 revenues and net profit dip
Stalexport's consolidated revenues amounted to zł.151.7 million, while a year ago they were double this figure. The company's H1 sales results dropped from zł.605.5 million in 2004 to zł.336.1 million this year.
The company put this down to the falling prices of steel products and the lack of turnover due to the deteriorating situation on the market, where the price steel products fell by as much as 50% due to low demand. The firm's results were also influenced by the fact that it sold its shares in two companies, Ferrostal Łabędy and Złomhuta, and lost control over Stalexport Wielkopolska.
Twin Towers steel used in construction of USS New York
The U.S. Navy is using steel from the World Trade Center in a new San Antonio-class amphibious transport dock, slated to be commissioned in 2008, according to the Navy.
USS New York will ensure that all New Yorkers and the world will never forget the evil attacks of September 11, and the courage and compassion New Yorkers showed in response to terror, said New York Gov. George Pataki at the ships 2002 naming.
US should fall into line with WTO steel ruling
The World Trade Organisation yesterday called on the United States to fall into line with an earlier ruling that criticized the way Washington applied penalties against privatized European steel companies.
A WTO compliance panel found that the US had failed in part to act on the global trade referee's December 2002 ruling, which said Washington imposed so-called countervailing measures without proving adequately that American firms were suffering from unfair European competition.
Under an accord among the 148 governments in the WTO, members can use tariffs to punish trade partners if they believe they are breaching the rules of global commerce-but must stay within the rules when they use such penalties.
Washington respected the 2002 ruling with regard to French firm Usinor, but failed to play fair with British Steel, now the Anglo-Dutch group Corus, and Spain's Aceralia, the WTO said in its report yesterday.
In November 2000, the European Union filed a complaint against the US, which had decided to hit a handful of previously state-owned European steel firms with tariffs.
Washington maintained that the companies had an unfair advantage because they had received state aid before being privatized between 1987 and 1998.
The dispute centered on whether "arm's length, fair-market value" privatization always prevented the benefit from state aid from accruing to the new private firm.
Steel prices in Pakistan fall by 20% as rains hit sales
Steel prices have witnessed a decline by about 20 percent during the last couple of weeks as the suspension of construction work in the upcountry due to heavy rains has cut sales of the local market and made importers stop activity. Traders said the market had been witnessing lacklustre buying interest for a month or two but trading remained almost quiet during the last couple of weeks and thin activity ultimately pushed down the prices.
Traders at Karachi iron market say the price of steel bars have come down to Rs 36,000 per tonne from the previous price of Rs 39,500 during last two weeks.The market has also been witnessing a declining trend in hot rolled and cold rolled products for the last few weeks. The prices of two products came down at Rs 37,000 per tonne and Rs 40,000 per tonne from Rs 42,000 per tonne and Rs 45,000 per tonne, respectively. The bearish sentiments spilled over to other products as the prices of steel sheets declined to Rs 41,000 per tonne from Rs 43,500.
It is expected that the market would make comeback with the arrival of buyers of rural and interior areas as the harvesting is almost over and by the end of this month or early September the prices will be going up with buying activity.
Pakistan Steel produces one million tonnes of steel out of the total three million tonnes the country consumes, and the remaining two million tonnes of steel are imported from Europe, South Africa and South America.
Dofasco buys Copperweld tubing and auto parts businesses
Dofasco Inc. is paying $177.8 million US for seven factories of Copperweld Holding Co.'s steel tube and auto parts businesses. Five of the plants are in southern Ontario, at Woodstock - near where Japanese auto giant Toyota plans to build a new factory - Brantford, London, Brampton and Mississauga. The other two are in Kentucky and Ohio. Atlas Tube of Harrow Ontario also announced that it was paying $350 million for Copperweld and then selling the automotive division and some of its mechanical division to Dofasco.
Dofasco's current tubular business - which caters mostly to large automakers - includes two mills in its hometown of Hamilton, as well as one in Ohio and one in Mexico. The acquisitions will almost double Dofasco's shipments of tubular steel and triple its sales revenue in that high-margin division.
Pittsburgh-based Copperweld was scooped up by American steelmaker LTV Corp. at the end of 1999 and dragged into that company's bankruptcy one year later. But Copperweld gave itself a makeover, slimming down from 23 plants to 13. It separated from its parent company and emerged from bankruptcy at the end of 2003 as a stand-alone operation with four divisions.
AK Steel takes union dispute to courts
AK Steel has asked U.S. District Court in Cincinnati to step into a contract dispute with the union representing 2,700 hourly employees at the Middletown Works. The company asked the court to declare that the Armco Employees Independent Federation was out of bounds in seeking arbitration of the companys decision earlier this year not to pay profit sharing to hourly employees for 2004.
AK spokesman said the profit-sharing plan spelled out in the contract with the AEIF isnt based simply on the reported profits. For example, the companys profits last year included a $201 million one-time gain on the sale of assets. The profit-sharing plan in the agreement includes some things and excludes some things
The carbon, stainless and electrical steel maker shipped 6.2 million tons of steel and reported a $238 million profit in 2004 after a string of annual losses.
Volkswagen Brazil to import steel from Europe
Volkswagen AG, Europe's biggest carmaker, said its Brazilian unit will almost quadruple steel imports this month in an effort to force Brazilian steelmakers to reduce prices. The unit will buy 30,000 metric tons of hot-rolled-galvanized and other flat steel from Europe after Brazilian mills rejected price concessions. The imports, including the cost of shipping, will cost 5 percent less than Brazilian steel and meet the unit's needs for six weeks.
In the past 24 months the price of hot-rolled galvanized steel, a key component of car bodies, jumped more than 70 percent and subsequently Brazil removed tariffs on most steel imports on March 4 after complaints from manufacturers.
Brazilian steelmakers usually make higher profit on steel sold in Brazil than on steel sold abroad. The three main suppliers in Brazil of flat-steel products are Cia. Siderurgica Nacional, Usinas Siderurgicas de Minas Gerais SA and the Brazilian units of Arcelor SA.
IPSCO appoints Mr Thomas Filstrup as Director of Investor Relations
IPSCO Inc. announced today that Thomas Filstrup has joined the Company as Director of Investor Relations. Mr. Filstrup will be based at IPSCO's operational headquarters in Lisle, Illinois and will report to Ms. Avril.
Mr. Filstrup brings nearly 20 years of investor relations management experience to the Company. He comes to IPSCO from Whirlpool Corporation where he has been Director, Investor Relations since 1988 and helped develop and implement Whirlpool's first Investor Relations program.
IPSCO, traded operates steel mills at three locations and pipe mills at six locations in the United States and Canada. As a low cost North American steel producer, IPSCO has a combined annual steel making capacity of 3,500,000 tons. The Company's tubular facilities produce a wide range of tubular products including line pipe, oil and gas well casing and tubing, standard pipe and hollow structurals. Steel can also be further processed at IPSCO's five temper leveling and coil processing facilities.
Pakistan Govt to invite EOI for Pakistan Steel Mills Corporation
The Privatisation Commission will soon invite formal Expressions of Interest (EOI) from interested parties to privatise strategic equity stake in Pakistan Steel Mills Corporation PSM together with management control on fast track basis. A consortium led by Citigroup Global Markets Limited is advising the PC on this transaction.
A Request for Statement of Qualification will be dispatched to the investors expressing formal interest in the privatization process of PSMC. The RSOQ package will contain pre-qualification requirements and other relevant information. PC would pre qualify investors based on the criteria spelled out in the RSOQ. Following this, pre-qualified investors would be allowed to conduct due diligence and participate in a transparent and competitive bidding process.
Pakistan Steel is the first integrated iron and steel works of Pakistan, which was set up with techno - economic collaboration of the former USSR. It has a production capacity of 1.1 million tones per annum with built-in potential for a total 3.0 million tones per annum capacity. Located 40km south east of the coastal city of Karachi, PSMC makes a range of long and flat steel products. In the fiscal year 2004-05 PSMC has recorded annual sales of over Rs. 30 billion and net profit of Rs 6 billion.
Samancor closes furnace after accident
South Africa's Samancor Chrome, one of the world's biggest producers of ferrochrome, said on Wednesday it had closed one if its furnaces at its Middleburg plant after workers were injured in an accident. Thirteen workers were hospitalised after the incident, which involved a sudden release of hot gases. An investigation had been launched into the incident.
The closed furnace produces about 200 tonnes of ferrochrome per day. The shut furnace was one of 15 furnaces in the group.
Samancor, owned by the privately-held Kermas Group, produces around 1 million tonnes each year of ferrochrome, an alloy made from chrome used in stainless steel to deter corrosion. Samancor Chrome is one of the two biggest global producers along with mining group Xstrata. Earlier this year, Kermas paid $469 million to buy Samancor Chrome from BHP Billiton and Anglo American Plc.
S.African workers end strike at Xstrata ferrochrome
The world's biggest ferrochrome producer Xstrata said on Wednesday its South African workers had ended a strike over wages begun in late July, and that it experienced minimal loss of output. Workers at Xstrata's Rustenburg ferrochrome plant returned to work after the firm and the National Union of Metalworkers union agreed a new wage package, the firm said in a statement.
South Africa is the biggest producer of ferrochrome, an alloy used as an anti-corrosive agent in stainless steel. A spokesman said that the firm had not lost much output because half of its furnaces had been shut down for scheduled maintenance. Six of the 12 furnaces were out for maintenance and were not running, so the impact on production was almost negligible. Rustenburg plant, one of several Xstrata ferrochrome plants in South Africa, had continued to operate with reduced personnel despite the strike.
Russian steel industry to remain export-oriented
The Russian steel industry will stay export-oriented in the years to come, the Russian Economic Development and Trade Ministry said in its 2006-2008 socioeconomic forecast.
Finished roll accounts for more than 60% of the industry's exports in value. The ministry forecasts that Russia will export 29.4 million- 30.4 million tonnes of roll annually in 2005-2008 and that value-added products will make up an increasing share of steel exports.
The ministry said it thought finished roll production would increase 2%-3% in 2006-2008 and that production in 2008 would be 10.8%- 13.6% higher than in 2004. The growth will be driven by production of sections and bars, output of which should be 15.3%-18.8% higher than in 2004.
Atlas Tube acquires Copperweld structural tube business
Atlas Tube Inc., the North American leader in the production of hollow structural steel tubing announced that it has entered into a binding agreement to purchase all of the shares of Copperweld Holding Company of Pittsburgh, Pennsylvania for a total purchase price of US$350 million. Copperweld is one of the largest and most diversified manufacturers of steel tubular products in North America.
With Atlas Tube and Copperweld both being leaders in the production of HSS in North America, the acquisition of the Structural division of Copperweld will allow Atlas Tube to combine production facilities and product range to become the world leader in size and efficiency. It is expected that following the closing of the proposed transactions, the combined Atlas Tube and Copperweld entities will have production capabilities in excess of 1.5 million tons per year.
Atlas Tube is a privately held corporation, owned and operated by the Zekelman brothers since 1984. Atlas Tube is the North American leader in the production of HSS products. Supported by the increased use of HSS as the material of choice in construction, Atlas has invested in the most state-of- the art mill technology and has become the largest and most advanced manufacturer of HSS in North America with existing operations in Canada and the United States. Atlas Tube will continue to look for growth opportunities which are consistent with its strategic plans and core business.
Iran's giant steel project revived after 30 years
A giant steel project will be implemented in the southern province of Hormuzgan some 30 years after Italy signed an agreement with Iran to construct the steel complex.
According to ISNA, the huge project had been left incomplete by the Italian side, which had undertaken to build the complex under a 1974 agreement, following the 1979 Islamic Revolution that toppled the pro-western Pahlavi regime. The complex was planned to have a production capacity of up to three million tons of steel slabs per annum. It now aims at producing 1.5 million tons of the product each year.
A Japanese firm conducted talks with Iranian authorities on the construction of the Hormuzgan steel complex in 1999 and expressed its readiness to invest $1.1 billion in the project. The company then withdrew from talks as international steel prices declined.
The project is now scheduled to be implemented in 40 months by Iranian companies.
There are plans to increase steel production capacity to 40 million tons by 2010. Nine million tons of steel were produced last year, when six million tons were imported. Steel mills are under mounting pressures due to excessive imports. Steel import duties stand at 15 percent.
S Korean Steelmakers drop sales targets
Domestic steel producers are lowering sales goals they set earlier this year as they adjust to the glut in the world market and the sluggishness of the local construction industry, which has been heavily affected by the government's efforts to keep real estate prices down.
Dongkuk Steel Mill Co. last week announced that it will cut back its sales goal by 8 percent, to 3.3. trillion won ($3.2 billion) from 3.6 trillion won.
INI Steel Co. said it lowered its sales target by 7.5 percent, to 5.3 trillion won from 5.7 trillion won.
Posco, said it would reduce its sales target 1.3 percent, to 23.6 trillion won from 23.9 trillion won.
The steel industry, however, is optimistic about the domestic market, which is expected to turn around in the fourth quarter.
Ship-owners on collision course with Asian shipyards
Asia's major shipyards and international shipowners are heading for a clash, as the latter appear reluctant to place new orders unless prices go down. Shipyards, on the other hand, have no intention of backing down, having secured numerous orders until 2009. With shipyards able to wait, any ships ordered now would not be ready before the second half of 2008, making shipowners more hesitant.
Recent reports suggest that ship deliveries will reach 28 million tons in size during 2005 against just 18 million tons in 2000. As for 2007 and 2008, this figure will rise as high as 31 million tons per year. In the last few years the shipbuilding community has reached its limits, as since 2000 orders for container ships have risen by 125 percent, with about 9 million tons to be delivered from 2006 to 2008, while in 2007 alone 12.5 million tons of tanker capacity is expected to enter the market. About 6 million tons of carrier ships will be delivered by 2008.
Shipping companies expectations are not as optimistic as they were even a few months ago sue to recent decline in freight rates across most markets. They therefore appear unwilling to submit new orders unless costs drop.
Although the shipbuilding community has tried to put on a united front to keep prices at current levels and not succumb to the shipowners' pressure, many observers believe that the front is already cracking due to pressure from shipyards in China and Vietnam. Interestingly, the price of steel, the main raw material for ships, has dropped in Korea; this is expected to be the first sign for the decline of raw material supply costs for shipyards.
The above developments show that even the threat of stopping operations is hanging over the most expensive of shipyards, which had been quick to increase their boat cradles due to the high demand until recently. If they are forced to lower their prices closer to their costs, they will have to render their vacant cradles inactive.
MACSTEELs US manufacturing facilities ISO Certified
MACSTEEL reports its three engineered bar mills Jackson and Monroe, MI, and Ft. Smith, AR have been certified to the environmental standard ISO 14001 by Lloyds Register Quality Assurance and to new automotive standards ISO/TS 16949:2002 by Intertek ETL Entela Automotive Certifications Board.
MACSTEEL supplies automotive and automotive component industries engineered steel bar materials and components for vehicular products and building products manufacturers.
Appalachian states working to reforest mine-scarred lands
Seven states have now signed onto an initiative with the federal Office of Surface Mining to return hardwood forests to mine-scarred lands in the Appalachians. Brent Wahlquist, director of OSM's Appalachian Regional Reforestation Initiative, said researchers working on mined lands in eastern Kentucky found a way for native hardwoods not only to grow on the reclaimed mountaintops but to actually grow faster than they could elsewhere.
That finding could be the key to returning the once heavily forested mountaintop land to its natural appearance, erasing the manmade prairies left behind after the miners and their machines move on. "It's our hope that through this initiative, perhaps 50 to 100 years from now, it can be forest again and be virtually indistinguishable from the rest of the landscape," Wahlquist said. The reforestation initiative is important because it will improve air and water quality, increase wildlife habitat, and create jobs in the timber industry.
The initiative would change the standard reclamation process in the Appalachians, which calls for soil and rock dislodged in the mining process to be put back in place and compacted to the point that trees have difficulty taking root.
Hylsamex shareholders clear Techint public offer
The response to Argentine-Italian group Techint's public tender offer for the outstanding shares of Mexican steelmaker Hylsamex reached over 99%, Hylsamex told the Mexico City stock exchange (BMV).
On May 18 Hylsamex parent company Grupo Alfa accepted an offer from Techint for its 42.5% share of Hylsamex in a deal which valued the entire subsidiary at roughly US$2.25bn.
Techint launched its public offer in late-July for outstanding Hylsamex shares for US$3.4732 per share. The offer expired on August 16 at 3pm, with shareholders holding 99.29% of the outstanding shares accepting the offer. The company will pay for the shares on August 22.
Hylsamex reported a net profit of US$89mn for the second quarter of 2005, a 28% reduction on same-period 2004.
Fitch assigns A+ rating to Chilian CAP bonds
Credit ratings agency Fitch Ratings has assigned its A+ rating to two new bond issues by Chilean iron and steel company CAP and upgraded to A+ from A ratings on the company's existing bonds with stable outlook.
Fitch's ratings reflect CAP's continued improvement to its financial structure plus the company's lower consolidated debt, which allows it to withstand the steel industry's cyclical nature. Despite the company's solid commercial relationship with primary customers in Chile, CAP remains vulnerable to imports and price fluctuations in the international market.
Colombian Steel maker Diaco sell share to Banistmo Capital
Banistmo Capital Market Group bought 2.6 million shares for 4.5bn pesos (US$1.98mn) at iron and steel group Diaco's public tender offer. The number of shares bought during the offer represents 1.51% of Diaco's outstanding shares and 14.11% of the ceiling of shares allowed to be bought in the deal.
BVC had previously said that if Banistmo Capital Market Group bought 10.72% of Diaco shares, the deal would exceed US$13mn.
An independent study conducted by Agora Consultants in mid-May estimated the steelmaker's equity ranges from US$119mn-136mn. Diaco sells 50% of the 500,000t of steel consumed in Colombia every year.
Venezuelan Sidor pays CVG $57mn in dividends
Venezuelan steelmaker Sidor has paid out US$57mn in dividends to state heavy industry holding company CVG, of which 9.61% will be distributed among Sidor workers owning shares in the company. This payment relates to second quarter 2005 dividends, and once the board gives approval dividends will be distributed among shareholders.
This payment follows worker claims for past dividends, which are now being resolved. CVG and Sidor shareholders reached agreements in May 2005 whereby CVG recognized the rights of series B shareholders to a US$94mn dividend payment.
BHP offers lower raise than rivals to South African coal miners
BHP Billiton, South Africa's biggest coal producer, is offering a smaller increase to its coal miners in the country than rivals Anglo American Plc and Xstrata Plc.
BHP has offered to raise pay by between 5.5 percent and 7 percent in comparison to offers of between 6.5 percent and 8 percent from companies including Anglo and Xstrata.
Eyesizwe Coal Ltd. and Kangra Coal Ltd. have matched the offer by Anglo and Xstrata. Kuyasa Mining Ltd. offered pay rises of between 6 percent and 7 percent while Springlake Colliery Ltd. offered a wage increase of between 6 percent and 7.5 percent.
Pike seeks consent to double coal quota
Pike River Coal Company is seeking a change to its resource consent so it can double the coal it is allowed to extract from its proposed mine in the Paparoa Range.
New Zealand Oil and Gas, which owns 72 per cent of Pike River Coal, has existing consent to extract 650,000 tonnes but has been talking for some time about exporting up to 1.2 million tonnes of coal from Pike River.
But it needs a change of resource consent. The variation to the resource consent is on the Grey District Council website as a public notice. The notice says Pike River Coal is seeking a change to permit the extraction of 1.3 million tonnes of coal a year.
Pike River is also seeking to add the option of trucking coal from the mine, in the Paparoa Range 42 kilometres north of Greymouth, to Greymouth's port.
The original consent limits the transport route from the mine by road to Ikamatua, where it would be loaded on to rail bound for the export port of Lyttelton.
Adobe Ventures in talks to acquire coal properties in South America
Adobe Ventures Inc. is in talks to acquire coal properties in South America including two mines, and a port-loading business in South America. Two of the properties are in the Caesar region of Colombia and one is a producing mine. The other property is in the Tachira region of Venezuela and is also a working mine.
TopSUEK reported revenue for the first half of 2005
JSC Siberian Coal Energy Company reported revenue of 22,919 billion rubles for the first half of 2005, up 8.3 percent from 21,152 billion rubles for the same period a year ago. Company's net income reduced to 540 million rubles from 3,364 billion rubles. The sales profit decreased to 2,785 billion rubles from 5,127 billion rubles. Pretax profit dropped to 773,98 million rubles versus 4,462 for the same period a year ago.
Siberian Coal Energy Company is the major coal group in Russia. The company supplies nearly 30% of coal to the domestic market and around 20% of export. SUEK is the only coal company in Russia which has entered the top ten global coal producers. Siberian Coal Energy Company (SUEK) has its affiliates and subsidiaries in Krasnoyarsk, Khabarovsk and Primorsky Territories, Irkutsk, Chita and Kemerovo regions, Buryatia and Khakassia, with the total number of employees exceeding 45 thousand. SUEK also holds large stakes of a number of regional power producers.
China succeeds in first undersea coal mining
China's first trial undersea mining turned out successful on August 16 at Longkou, east China's Shandong Province. A technique of top coal recovery in fully-mechanized sublevel caving face was used in the project, filling in a blank in world undersea mining.
Beizao Coalmine, who is in charge of the project, is China's first mining enterprise engaged in undersea extraction. Trial extraction started on June 18 at the first working face, 359.5 meters under the Bohai Sea, with a coal bed 4.4 meters thick and a reserve of 89,200 tons.
