August, 02 2005
Indian Steel prices fall thrice in three months
State-owned Steel Authority of India on Monday lowered its prices by four to eight per cent and owed it to correction in global prices due to liquidation of inventory across the countries.
Domestic steel companies, led by the Steel Authority of India, have cut prices by Rs 500-1,500 a tonne from today. Most of the companies have slashed prices by Rs 500 a tonne for long products and Rs 1,000-1,500 for flat items.
However, a spokesperson of the country's largest steel producer said "the prices would start firming up in a lead time of one to one-and-a-half months."
This is the third straight month when the steel behemoth effected a cut in prices. The steel market, known to be cyclical in nature, is undergoing a decline in prices following inventory stockpiling and a lower demand from China.
High inventory coupled with cheap imports from CIS countries is the major reason for the price correction. After this revision, domestic prices are competitive with landed rates of imported steel, an industry executive said.
The average benchmark HR prices in the country are hovering around Rs 24,000 to Rs 25,000 per tonne, while average international HR prices are around Rs 21,000 per tonne requiring a price 'correction'.
Domestic steel prices are in line with international rates. Therefore, any decrease/increase in domestic rates follow the global trend. The current price revision is in accordance with the same, an Essar spokesperson said. However, companies feel steel prices was on the verge of bottoming out. Demand is picking up and the inventory is gradually depleting. It would still take a month or two, an executive of a steel firm pointed out. This could be the end of a series of price cuts as global rates have begun to firm up, he added.
Tata Steel, however, said that it would 'wait and watch' before reacting to present price cuts. A Tata Steel spokesperson said that no decision has been taken yet to drop prices. He added that the market situation in any case would not affect the steel prices on long-term contracts entered into by the company.
Industry is hopeful that a turnaround is round the corner following the three successive reductions. However, experts warn that the dizzy heights the industry touched last year is unlikely to be repeated in the near future.
Only solace is that prices are still above the previous peak of $475 tonnes in 2001 and 2002 and much above the low of $180 a tonne.
RINL expansion plan to get approved soon
A delegation of Members of Parliament from Andhra Pradesh called on the Union Minister of Steel and requested for early clearance for the expansion plan of Visakhapatnam Steel Plant (VSP) of RINL as well as approval for RINL taking a majority stake in Neelachal Ispat Nigam Limited (NINL).
They stated that the people of Andhara Pradesh were eagerly awaiting clearance for the proposed expansion plans of VSP which would enable the plant to raise its liquid steel capacity from 3.0 million tonnes to 6.3 million tonnes. The proposal had already been cleared by the Public Investment Board and was now awaiting Cabinet clearance. Since RINL did not have captive iron ore mines, they were also keen that NINL, a joint venture undertakings in Orissa be either merged with RINL or come under the majority control of the steel plant.
The Steel Minister clarified that the Cabinet note for expansion of VSP at an estimated cost of approximately Rs.8200 crores would be approved within a week and sent to the Ministry of Finance for approval.
In respect of NINL, the Minister clarified that the Orissa Government was not in favour of merger of NINL with RINL and on the contrary supported its merger with SAIL.
NMDC to set up value addition plant with Rashtriya Ispat
National Mineral Development Corporation Limited (NMDC) proposes to collaborate with Rashtriya Ispat Nigam Limited (RINL) for setting up a steel making unit or a sponge iron plant in the Bailadilla sector of Chattisgarh. Both the public sector undertakings are finalising a joint venture agreement for this purpose.
By collaborating with RINL to set up a unit, NMDC can obtain additional mining leases and increase its iron ore production while RINL can increase its steel making capacity. The increased production of iron ore can feed RINL plant and contribute to value addition in Chattisgarh.
The plans, involving an investment of Rs 1,500 crore, included development of new mines and augmentation of iron ore production in the Bailadilla and Bellary-Hospet sectors.
2 bidding stages for captive coal mines
Steel, cement and power companies may now have to go through two stages of bidding for captive coal mining on lease. This is because the government is planning to replace the screening committee route while allocating captive coal mines to these companies.
The coal ministry, under directions from the Prime Ministers Office, has circulated a draft bidding document that requires companies to pledge annual production-linked payments (PLP) to the government. It also plans to make the lease period for captive mines flexible to the extent of being even less than 30 years.
The two-stage bidding is likely to make coal more expensive for these companies. Several users, including the power ministry, have maintained that coal companies should also be allotted blocks through bidding and not through the nomination route.
Bidders will be required to submit techno-commercial bids, followed by price bids. They will also be required to quote a year-wise per cent of coal produced from a captive block to be shared with the government for the entire mine life.
E- Coal puts CCL under cloud
Central Coalfields Limited (CCL)s decision to sell the mineral at varying rates for consumers under the same category has made Jharkhand-based small scale units pay almost double the usual to purchase the black gold.
The coal companys decision to sell coal at varying rates and without calling for tender or bidding is against the Central Vigilance Commissions guidelines.
The usual process of allocating coal to the Jharkhand Small Industries Association (JSIA) units is done through a process called linkage, which includes an inspection of the unit by government agencies such as Coal India Limited (CIL). After linkage the cost price of coal known as notified price or floor price, is fixed for the corresponding small-scale industry.
The complication now is that JSIA has been asked to purchase coal through the e-auction process, which was started in May. While purchasing through this new exchange, the units have to pay more than the notified price. And this despite, claims JSIA, them having purchasing coal through the linkage process for over 20 years now. The cost, if purchased through e-auction, would be almost 100 hundred per cent higher than the notified price, claims JSIA officials.
The problem surfaced a couple of weeks ago, when CCL received orders to supply coal to an agency called the National Consumers Co-operative Federation (NCCF) at rates 20 per cent higher than the notified price. NCCF has been described as an apex body under the ministry of consumer affairs and public distribution. Early this year, NCCF was allotted two lakh tonnes of coal to be distributed among smaller coal consumers in five states, excluding Jharkhand. Since e-auction was introduced, coal prices have shot up as they were now subject to market forces. NCCF had been lying low ever since. Thus, it did not take over the allotted coal and was liable to be penalised under Coal Indias Fuel Supply Agreement (FSA) policy.
Rio ready to hit $2.6b for first half
Analysts expect the profit figure for Q2 will be the third record earnings announcement in a row for the mining giant Rio. Rio is tipped to announce a record half-year profit of about $2.6 billion
As the world's second largest iron ore exporter, behind Brazil's CVRD, Rio has been a major beneficiary of a 71.5 per cent price increase obtained from Japanese steel mills in April.
Two of Rio's Australian subsidiaries reported their earnings last week and both announcements were positive. Coal & Allied, of which Rio owns 76 per cent, said it earned $126 million over the first half, compared to $3.3 million over the same period a year earlier. Rio also holds a 68 per cent stake in uranium miner Energy Resources of Australia, which posted a $17 million half-year profit, 21 per cent higher than last year's first-half results.
China's crude steel to increase by 59 million tons in 2006
Calculated on the basis of the output in the first half year China's crude steel output would reach 332 million, increasing 59 million year on year. An imbalance of production over need has begun to present itself. Steel output in China has already reached 272 million tons in 2004.
Crude steel production saw a year-on-year increase of 28 percent during the first six months, pig iron 33 percent, steel products about 26 percent. These together constituted a fast growth trend in iron and steel production.
Statistics also show that as overall production capacity grows too fast the imbalance of production over need has begun to show since April and was particularly prominent in May, giving rise to overall oversupply.
Officials with China Iron and Steel Association believe despite the overall oversupply in the iron and steel industry the problem of inadequate production capacity coexists with excessive capacity. Structural contradictions still persists and the key is to accelerate adjustment of variety structure.
Japan sets 15% tariffs on U.S. steel for Sept. 1
Japan will impose 15 percent tariffs on U.S. steel imports starting on Sept. 1 in retaliation for American steel industry protection measures, trade officials said on Monday, turning up the heat in a long-festering dispute between the world's two largest economies.
The tariffs, which could rise as high as 5.7 billion, or $51 million, will be placed on ball bearings, airplane parts and other steel products, the Ministry of Economy, Trade and Industry said
Japan has demanded the repeal of duties imposed by the United States on Japanese steel products under the so-called Byrd amendment, an antidumping law ruled illegal by the World Trade Organization in 2003.
The trade minister, Shoichi Nakagawa, said that Tokyo had no choice but to move after realizing there was little chance that the amendment would be repealed before the U.S. fiscal year ends on Sept. 30.
The tariffs will not be imposed if the Byrd amendment - named for Senator Robert Byrd of West Virginia - is repealed by Sept. 1, trade officials said.
The European Union and Canada placed penalty tariffs on millions of dollars of U.S. imports in retaliation for the Byrd amendment on May 1.
Washington placed tariffs on hot rolled steel from Japan, Brazil and other countries starting in 1999, alleging that those countries were selling their products at unfairly low prices.
Severstal reports financial results for the first half of 2005
JSC Severstal reported net earnings of 74.01 billion rubles ($2.59 Billions)for the first half of 2005, an increase of 31 percent from the same period a year ago.
Company's gross profit rose 24 percent to reach 29.27 billion rubles ($1.02 Billions) , the sales profit climbed 24 percent t come to 27.84 billion rubles ($ 974 million).
Nowadays Severstal is among the three leaders of Russian ferrous metallurgy and among twenty world major steel companies. Severstal as an integrated Iron & Steel works which manufactures a wide range of products: hot and cold rolled steel, roll-formed shapes and pipes, rolled sections, a large group of coke products and by-products and is the largest exporter in Russia.
Ukraine to sell out 1.74 % in Kryvorizhstal
The Ukrainian state property fund is putting a stake in Kryvorizhstal mining and iron and steel works worth over 67m shares (or around 1.74 percent of its authorized capital) up for sale at the initial price of USD13.3m.
According to the fund's press service, the tender is set to take place on September 6. The stake of 1.74 percent was left over after the preferential subscription rights had been exercised.
A second bid for privatization of 93.02 percent of Kryvorizhstal has been scheduled for October 24, 2005. The results of the bid are expected to be announced that very day, and the money raised through the sale of shares are expected to be included in the budget before November 10.
International Coking coal prices will ease back in 2006
International prices for coking coal will fall in 2006 off the "unprecedented" level of $125/metric ton, according to AME Mineral Economics. In its latest report, the Australian commodity analyst says. The coal shortage of last year has now eased with an increase in exports from Australia, Canada and the U.S., as well as a jump in Chinese coke exports.
The average price rose by 119% this year for coking coal, the bituminous coal that is baked for use in smelting iron ore and scrap in blast furnaces into molten pig iron.
Supply is better although AME believes the market still isnt in balance. AME forecasts world demand for imported coking coal rising by 3.1% annually between 2004 and 2010.By next year, though, supply of premium quality hard coal should come closer to matching demand.
Thats because this years increase in price has attracted new capacity investments in Australia and Canada. This may even result in the coking coal deficit evaporating sometime in 2007, even with the strong growth in global demand especially in China and Brazil is predicted for the next few years.
Mr Guy Dolle predicts flat steel market to rebound within 9mths
The international steel market will undergo a pickup in demand and prices in the next 2-3 quarters, the president of Luxembourg-based steel giant Arcelor told reporters.
"We are in a period of pause," Guy Dollsaid during a press conference on Arcelor's stakes in Brazil. "The steel world had an exceptional year in 2004."
But 2004 Chinese demand and the threat of significant price increases of raw materials such as iron ore and coking coal have forced manufacturers and suppliers to raise stocks to higher-than-normal levels, he said.
The steel markets in Europe and the US became depressed with the lack of demand, which resulted in fewer orders and lower prices during the first half of the year.
Dollsaid he expected the "cyclic phenomenon" to improve for flat steel products in the next 2-3 quarters. Arcelor is already seeing signs of improvement for long steel products, he added. But the European market will take a little longer to recover, Dollsaid. Arcelor expects prices and demand in the European Union to recover within 12 months.
China's GDP grows 9.5 percent in first half year
China's gross domestic product (GDP) for the first half of this year reached 6,742.2 billion yuan (812.3 billion US dollars), a year-on-year increase of 9.5 percent.
"It was 0.2 percentage points lower than the growth rate for the same period of last year," said Zheng Jingping, spokesman of the National Bureau of Statistics, at a press conference on Wednesday.
In the first half of this year, regions and departments at all levels made all efforts in implementing the scientific approach to development and various policies set by the central authorities on economic work, with the aim to consolidate the achievements brought by macro-control, he said.
"As a result, fairly good overall economic performance was recorded in the first half of this year."
China's fixed assets investment reached 3289.5 billion yuan in the first six months of this year, a year-on-year increase of 25.4 percent.
China's industrial production grew by 16.4 percent in the first six months of this year on a year-on-year basis, says a report released by the National Bureau of Statistics.
The disposable income per capita of China's urban residents reached 5,374 yuan in the first half of this year, a year-on-year increase of 9.5 percent, says the report released.
The per capital cash income of farmers had a real increase of 12.5 percent to 1,586 percent for the first half year, up 1.6 and 0.8 percentage points, respectively, from a year earlier.
Stainless sheet prices dropped 4%
Stainless sheet buyers reported a 4% decline in stainless steel sheet market prices in July, according to Purchasingdata.com, partly because alloying metal price slipped and partly because end-user demand dropped. The online news service Steel Business Briefing reported a similar price slippagebecause imports increased slightly and mill and service center inventories
remained high.
There is a difference of opinion whether stainless sheet pricing will drop even further, or whether it will weaken in the third quarter, and then rebound in the last quarter. "I think theres a better potential for prices to go down than go up," says Gregg Mollins, president of Reliance Steel & Aluminum in Los Angeles. "Theres been offshore material that has materialized on the East Coast and that is making domestic producers nervous," he says in last weeks second quarter conference call with analysts. Thats why Grade 304 cold-rolled sheet dropped to $2,587/ton in July from $2,695 in June. A stainless steel market source tells Steel Business Briefing that U.S. mills have been disciplined in their pricing approach during the inventory overhang in the first half. But that they could no longer hold the price when nickel tags slipped, imports increased and distribution inventories expanded. Mollins says mills order books are soft and leadtimes are down, yet producers are producing at capacity.
New Chinese mills spell trouble for steel sector
China's pledge to strip out excess capacity is not enough to restore long-term confidence in the world's fastest-growing steel industry
Even as Beijing moves to shut down capacity equal to last year's entire steel output of the United States, new mills are starting up in a country that has more than 800 mills
Large investments have led to a spate of new mills in China, which has only managed to close its smallest, least efficient plants - capacity easily replaced by huge new factories.
Supply is increasing more rapidly at the moment. Everybody has an incentive to produce more, to some extent, because they get more revenues, even at lower prices,'' John Johnson, China chief representative for CRU International, said.
JP Morgan estimates China's annual capacity for flat products alone is likely to increase by 27 million tonnes, or about 60 percent, this year.
Thailand, Japan Agree to Trade Agreement
Thailand and Japan have agreed to forge a free trade agreement and expect to sign the deal next April unless disagreements arise over details. The agreement aims to reduce tariffs on $35 billion worth of trade between the two countries. Japan is Thailand's single biggest trading partner.
Under the proposed agreement, Thailand will reduce tariffs on steel products imported from Japan over the next 8-10 years, in order to give time to Thai steel manufacturers to prepare for the competition.
Thailand also has agreed to reduce import tariffs on cars with engines of 3,000 cubic centimeters or more to 60 percent from the current 80 percent by 2009. Tariffs on imports of automobile parts deemed sensitive by the Thai authorities will be eliminated by 2013, while tariffs on imports of other parts will be eliminated by 2011, he said.
While Thailand does not have its own car companies, it is a major parts production and assembly base for the world's big auto companies, including Toyota Motor Corp., Honda Motor Co. and General Motors Corp.
Non-Japanese automakers and steel producers voiced disappointment after Thai negotiators announced that the country would cut tariffs for Japanese imports under the Thailand-Japan free trade area. Japanese carmakers, who mostly produce light trucks and small passenger cars in Thailand, will now enjoy a competitive edge in the luxury segment when compared with European and US imports. The new tariffs apply to cars with engines larger than 3,000 cc.
Total trade between Japan and Thailand reached $35.79 billion last year. Of the total, $13.50 billion were Thai exports, and $22.29 billion were imports, according to the Web site of the Thai Ministry of Commerce.During the first six months of 2005, the trading value between the two countries reached $20.56 billion.
Economists predict China's economy may fall into deflation
At the second China economic observation forum, some economists predict that China's economy may fall into a deflation characterized by persistent consumer price decrease.
Lin Yifu, Director of China Center for Economic Research (CCER)of Beijing University, said at the forum held quarterly by CCER that owing to the overproduction in most manufacturing sectors since 1998 and the to-be-overcapacity from over-investment in some sectors in 2003 and 2004, China is expected to see deflation caused by overcapacity in the latter half of 2005.
Wang Jian, Deputy Secretary General for the Economic Research Institute under State Development and Reform Commission, said that decreasing growth of Consumer Price Index (CPI), dropping enterprise profits, as well as losses in downstream industries are all signals that China's economy has taken a cooling trend.
According to Wang, China's economy has reached the middle phase of the highly-growth cycle driven by heavy industry investment since 2003. So the investment is expected to fall in 2006 despite a continuing rapid growth, he said.
As for the consuming sector, because this year's good harvest may result in somewhat decrease of farm produce prices, Chinese farmers, accounting for China's largest population, is expected to see their net income growth of this year lower than that in last year, which will limit the expansion of the domestic demand to a large extent, said Wang.
According to Yuan Gangming, research fellow of the Center for China in the World Economy of Qinghua University, still keeping a rapid growth, China's investment will fall with dropped prices of consumer goods, industrial goods and expected dropping of that of raw materials. China's economy has been in the alert zone of deflation, said Yuan.
Professor Song Guoqing of CCER has the same worries. Through data analysis, Song demonstrated that the 9.5 percent growth of China's GDP in the first half of this year was driven by the growth of favorable trade balance to a large extent as the real growth of domestic demand is only 3.5 percent.
With cooling investment in real estate industry, and pessimism on favorable trade balance growth caused by decreased demand of overseas market, acuter trade frictions and RMB appreciation, China's economy tends to be cooler in a short term, said Song. So there is possibility of weak demand and so deflation in certain period of time, said Song. But he predict the deflation will not last long.
Lin also said that caused by overproduction capacity, the possible deflation will not drive the economy down much in one or two years, despite it will do bring some bad effects on the country's economic operation. He suggests that China should make more efforts in expanding domestic demand, especially the purchasing power of farmers by supporting infrastructure construction in rural areas and giving more opportunities for farmers to work in urban areas to increase their income.
Mittal Steel Temirtau increases wages
From 1 July the wages of Mittal Steel Temirtau workers has been raised by 10%. In January, 2006 the tariff rates of the workers will be lifted by 10% more.
Due to the mutual agreement signed between the board and trade union committees of Mittal Steel Temirtau, workers wages will make KZT 6 bln ($44.1 millions).
The company has been successfully operating in Kazakhstan for 10 years. Annual output amounts to 5,5 million tonnes of steel. The company possesses own coal pits and iron fields. More than 50 000 people are employed in the company.
Sumitomo, Aramco project''s cost double to USD 8 billion
Sumitomo Chemical Company, a leading Japanese chemical manufacturer, said the total cost of the major petrochemical project in Saudi Arabia is expected to double from the original plan to about USD 8 billion due largely to higher steel prices, according to media reports Monday.
Initially, total investment in the oil refinery and petrochemical plant being constructed in a joint venture with Saudi Aramco was projected at USD 4.3 billion, but with rising prices of steel and other materials, the costs indicated by engineering firms exceeded initial estimates, said the Nikkei business daily.
New facilities not included in the initial plans, such as power generation and desalination plants, will also be built.
Venezuela's CVG to stop export of iron and aluminum ore
The Minister of Basic Industries and Mining announced that Corporaci Venezolana de Guayana (CVG) would not be renewing its contracts for the international supply of iron and aluminum when they expire this year and in 2006. In other words, beginning in January 2007, the iron and aluminum that is currently being exported under supply agreements will stay here in Venezuela, to be used by domestic companies in manufacturing higher value-added products.
This will be an uphill endeavor, given that production in 2004 totaled 623,500 metric tons of aluminum, of which 423,600 MT were exported and only one third 207,810 MT was processed in the country. In the case of iron ore, production totaled 21.5 million MT in 2004, with exports accounting for 9.3 million TM. The remaining 11.4 million MT were processed locally for DRI and steel products.
CVG seems to be out of touch with reality when it speaks of having domestic consumption take the place of exports in a mere 18 months. The country doesnt have the installed capacity. And, even assuming that the investment projects did exist, it would take years to get them started up. Besides, there is no hint or indication whatsoever of any coherent industrial development strategy. On the contrary, the governments endogenous development plans seems to be nothing but gaping holes and bottomless black chasms. And, to top it off, most of the industries in the country existing or planned- are unable to compete efficiently on the international market because of the overvalued bolivar and the many anti business restrictions put in place by the government.
With this strategy that is both hard to understand and impossible to achieve, the question is whether there isnt something else behind the announced suspension of export contracts.
S African strikers hurt in scuffle at Xstrata plant
Several striking workers at a South African ferrochrome plant owned by mining group Xstrata Plc were injured on Monday after company security guards fired teargas, and the two sides disputed the details.
Workers at the Rustenburg plant of Xstrata, the world's biggest producer of ferrochrome, went on strike on Friday in a dispute over wages. The company said unruly protesters threatened a worker who reported for his job, while the union said peaceful strikers were fired upon without warning.
The National Union of Metalworkers of South Africa (NUMSA), however, said peaceful strikers were attacked with rubber bullets and teargas as a security vehicle rammed the crowd.
Xstrata said last week the strike would have only a modest impact since output was recently trimmed back temporarily. Last month, the company said ferrochrome output would probably be flat this year as it closes some furnaces for maintenance and keeps other shut due to low market demand.
Xstrata reported attributable, saleable ferrochrome production of 1.225 million tonnes in 2004.
Oregon Steel Mills Q2 Rises
Oregon Steel Mills Inc. reported its second quarter net income, including items, of $28.4 million compared to $14 million in the same quarter last year.
Quarterly sales increased 19% to $335 million from $281.8 million in the year ago quarter.
The company expects fiscal 2005 sales to be $1.25 billion.
Kremikovtsi takes ownership of LLamkos Steel
The UNMIK (United Nations Mission in Kosovo) officially transferred to Kremikovtsi the ownership of zinc coating plant NewCo LLamkos Steel LLC in Vustri, Kosovo on July 22
Kremikovtsi paid almost 4.2 million euro for a 100 per cent stake in the Kosovo plant, after winning the second tender on April 13 for the privatisation of LLamkos Steel.
The board of directors of the Kosovo Trust Agency approved the deal and a privatisation contract was signed. Kremikovtsi intends to invest 15 million euro to modernise the plant over the next two years and will maintain 500 positions.
Bekaert H1 profit rises, sees challenging H2
Belgian steel wire and cord maker Bekaert said on Monday its first-half operating profit rose to 85 million euros on a 13 percent increase in consolidated sales to 971 million euros.
Net profit jumped to 130 million euros from 79 million euros, underpinned by a 54 million euros capital gain.
But Bekaert said in a statement before the market opening it saw a "challenging second half year ahead, due to clear weakening of the economic environment.
Socotherm's Brazilian Subsidiary Wins Major Coating Contract
Socotherm's Brazilian subsidiary, Socoril do Brasil, has been awarded a $50 million contract to provide anticorrosion coatings for the Petrobras $ 1 billion 1,200-km Gasene (Gasoducto Sudeste Nordeste) pipeline that will ultimately link the Malha Sueste and Nordeste lines. Once completed, the Gasene pipeline will have a transport capacity of 20 MM cubic meter/d.
The contract calls for a three-layer application of polyethylene external anti-corrosion coating of PLASTYKOTE and an internal flow coating of INNERKOTE on 1,300 km of 28-inch diameter pipe.Work is scheduled to start by year-end and be completed by mid-2006.
Zeno Soave, CEO of Socotherm said, "The award of this project strengthens our market position in the South American area and our strategic alliance with Tenaris. It is also among the largest contract awards as part of the Argentinean Brazilian gas integration plan that includes other projects that will be executed in the short to medium term."
Colombian steelmaker APR revenue grows 9.7% to US$96mn in H1
Colombian steelmaker APR reported operating revenue of 221bn pesos (US$95.8mn) in the first half of 2005, up 9.7% from same period 2004.
Ebitda came in at 66.8bn pesos, equivalent to 30.2% of net revenue earned through June 2005. APR reported net profit of 41.6bn pesos 1H05
By the end of the six-month 2005 period, APR sales volume was 160,483t, up 7.3% from same period last year, according to the information.
APR, which is advancing a US$35mn modernization program, is headquartered in Belencito in the central department of Boyac The company has a 14% domestic steel market share.
Mexican Autl Q2 profit jumps five-fold to US$20.3mn
Mexican manganese-ferroalloy producer Minera Autl's second quarter 2005 net profit rose five-fold to 215mn pesos (US$20.3mn) compared to same period 2004, the company announced.
Ebitda for the quarter rose 171% to 171mn pesos during the same period, while operating profit rose 245% to 346mn pesos. On June 30, 2005 company debt stood at 195mn pesos.
Autl, which supplies the steel market, is working on a "daily basis" to reduce the company's vulnerability to changes in the market. The company relies heavily on ferroalloy prices and has suffered in years past when imports flooded the market. Since then Mexico's government has imposed duties to protect the company.
Autl is due to begin production at a new US$5mn sinter plant in August. The plant will be in Tam in eastern Mexico's Veracruz state and have a capacity of 300,000t of sinter, a product used to make manganese-ferroalloy. The plant will be able to use coal or charcoal instead of natural gas.
Argentinean Acindar H1 profit grows 19% to US$102mn
Argentine long steelmaker Acindar reported 292mn pesos (US$102mn) in net earnings for the first half of 2005, up 19% from 1H04 as sales and costs of sales increased, the company told the Buenos Aires bourse.
Net sales grew 31% to 1.21bn pesos during the period. Domestic sales totaled 963mn pesos, up 22% year-on-year, while exports increased 80% to 271mn pesos thanks to a 37% growth in volume to 133,000t.
Cost of sales grew 35.9% compared to same period 2004 largely due to a 90% cost increase for iron ore, the company said.
Acindar, Argentina's largest long steel maker, reported net profits of 153mn pesos in 1Q05.
Ryerson Tull Mexican Q2 profit up by 25%
Chicago-based steel products distributor Ryerson Tull which has a strategic relationship with Mexican steel services and distribution company Grupo Collado, reported US$26.6mn in second quarter 2005 earnings, up 25% from same period 2004, the company said in a statement.
Ryerson Tull, recorded a 91% increase in Q2 sales to US$1.5bn. Compared to Q1, second quarter sales dropped 1.3%.
Q2 tonnes shipped increased 31% year-on-year while the selling price per ton grew 46% but dropped 2.6% from 1Q05.
"While metal prices softened as expected, particularly for carbon flat-rolled, our volume remained strong," chairman and CEO Neil Novich said in the statement. "We anticipate continued pressure on metals pricing," Novich said of the third quarter.
Ryerson Tull invested US$3.4mn in equity to form Collado Ryerson in September 2003 with Mexico's Grupo Collado. The new entity is Mexico's largest steel plate processing and fabrication plant.
Mexican Villacero faces strike
Union workers are threatening to strike at Sicarta, a unit of Mexican steelmaker Villacero, newspaper Reforma reported.
The union is demanding 150 spots at a soon-to-be-opened steel distribution center in Nuevo Le state. If the strike goes ahead, the company will close metal production but keep its furnace operating to process steel.
3 Palawan mines of Toledo Mining affected by 25-yr ban
Three Palawan mine prospects of British firm Toledo Mining Corp, found within an "ultramafic rock Earea" that can have world-class potential for nickel and chromite is threatened to be buried forever as Puerto Princesa's mining moratorium could skip metals' present rallying prices.
TMC is a technical and financial management firm owned 40 percent by TMCP and 60 percent by locally-listed Atlas Consolidated Mining and Development Corp. (ACMDC).
The mining suspension was issued without considering that exploratory mining techniques barely touch the environment and that the mine holds huge job creation opportunity.
They are locking away a potential God-given mineral wealth which may well help the immediate development of job opportunities and economic and social development of a remote part of central western Palawan without considering all facts.
Oregon Steel Q2 sales up by 19%
Oregon Steel announced that Q2 sales were up 19% on-year to $335-mil, while net income was $28.4-mill from $14-mil in the second quarter of 2004
For 2005, the company expects to ship approximately 1.5-mil st of product, but due to "the flow through of higher cost slab inventory purchased in prior quarters," Declusin said that third-quarter earnings for the company would fall below second-quarter earnings.
Unsettled conditions in the steel plate and rod markets are likely to continue, Oregon Steel Mills president and CEO Jim Declusin said Monday.
However, restarting equipment at the Rocky Mountain Steel Mills Division and Camrose mills, with renewed large diameter pipe shipments and resulting pull through of plate at the company's Portland mill plus lower slab costs, meant that Declusin was upbeat that profitability would improve in the fourth quarter.
Hiveld earnings shine
South African steel maker Highveld Steel and Vanadium on Monday reported interim headline earnings per share of 1,049.5 cents for the half-year to June 2005, up from 364.9 cents in the 2004 interim period. The group declared a six-month dividend per share of 1,050 cents, up from 120 cents before.
The group attributed the strong increase in earnings to significantly improved market conditions in the group's range of vanadium products. Overall group steel sales volumes have decreased by 8% and domestic despatches by 7%, compared to the same period last year.
Turning to the outlook, Hiveld said that domestic demand for the group's steel products had slowed. Hiveld added: "This should, however, improve during the fourth quarter as merchant de-stocking terminates. Relatively low interest rates and the current weaker rand will impact positively on the industry in general and specifically the value added manufacturing sector."
Mexican Villacero strike starts
Roughly 2,000 workers with Mexico's national mining and metalworkers union STMMRM started striking Monday morning against steelmaker Grupo Villacero's Laro Cdenas plant.
The union says Villacero among other things has not complied with worker transport standards, unjustly fired seven workers and failed to agree to open union jobs at its new plant in Nuevo Le state.
The spokesperson could not say what the strike's impact would be on production, but added that Villacero closed one furnace last week in anticipation of labor problems.
Also over the weekend multinational steel giant Mittal's Laro Cdenas unit reached a salary agreement with the same union, giving the green light to a 20% raise.
Saha Thai steps up marketing
Saha Thai Steel Pipe Plc expects to double its domestic sales volume over each of the next three years through more aggressive marketing, according to deputy managing director Thaweesak Karuchit.
The company has set a target to double its sales volume to 48,000 tonnes of steel pipes this year and to double it again to 96,000 tonnes next year.
Currently, almost all of the company's revenue comes from exports, chiefly to the United States. It wants to build domestic sales in order to diversify risk, and to increase the proportion of its domestic sales to 50% of its total by 2007.
The company says it is facing tougher competition abroad, especially from the increasing number of products dumped by rival producers in China and India. Domestic demand has risen significantly over the past few years along with growth by industries that use steel pipes.
The company's main products are black steel pipes, galvanised steel pipes and furniture pipes, used in the construction, furniture and automotive businesses.
Saha Thai posted revenue of 1.04 billion baht in the first quarter, up 51.6% from the same period last year, with a net profit of 174.5 million baht. Last year it earned 463 million baht on revenue of 3.6 billion.
In 2004, Saha Thai booked total revenue and net profit at THB3.65 billion and THB463.1 million respectively. Domestic sales currently account for 31.9% of revenue. The company's major export markets include the U.S., Europe, Australia and Asia.
Saha Thai Steel Pipe PCL plans to float 150 million shares, or a 25% stake, via an initial public offering this year.
Turkish Elbasan Steel Mills Gets New Filters
Turkish concern Kurum, which operates the Elbasan Still Mills under a lease, has started the works on the installation of a new environmental protection system. The system should decrease the amount of pollutants released in the air in the area of Elbasan. The total operation is expected to be completed by August 14.
The total investment is estimated at 3.5 million Euros, and is the largest investment directed at curbing the air pollution in Albania to date. The air pollution was the main problem related to the Elbasan steel processing industry, which was open in 1970s with outdated Chinese technology.
The system should be operational in September of this year and will help protect the environment in Elbasan area.
Fluor to assist Stelco with Maintenance Excellence Program
Fluor Corporation today announced that its Canadian subsidiary has been awarded a contract from Stelco Inc., Canada's largest steel producer, to provide asset productivity and maintenance improvement consulting services as part of Stelco's strategy to strengthen its competitive position.
Consulting and training services will be performed at two sites located in Hamilton and Nanticoke, Ontario, Canada, supported by Fluor's offices in Calgary and Greenville, S.C.
Working in conjunction with Stelco's executive management and operations teams, Fluor guided the development of the Stelco Maintenance Excellence Project (SMEP) in 2004 by utilizing its Best PLANT(SM) assessment and benchmarking process to quantify the value of maintenance, work process, and non-capital capacity improvements for Stelco. Stelco is now in the early phases of implementing the improvements identified in 2004.
"Stelco has worked intensively with Fluor for almost one year," said Colin Osborne, Stelco executive vice president and chief operating officer.
Fluor Corporation provides services on a global basis in the fields of engineering, procurement, construction, operations, maintenance and project management. Headquartered in Aliso Viejo, California, Fluor is a FORTUNE 500 company with revenues of $9.4 billion in 2004.
China to cap methane gas from coal mines
Troubled by frequent coal mine accidents, China is learning from foreign experience to harness the fatal methane gas and turn the "No. 1 underground killer" into a new energy source.
In order to ensure work safety for coal mines, China used to pump the gas out and discharge it. As a result, hundreds of million cubic meters of coal mine gas is discharged to pollute the air. Some leading mining groups in China have well realized the problem and are seeking ways to handle it . They learn from the foreign experience to collect the gas and use it as a fuel. The calorific value of the coal mine gas is two to five times as much as that of the coal gas for home use and produces little pollution.
The Pansan Coal Mine, located on the Huaihe River, has built dozens of bunker-shape structures under the high ventilating shaft. They are connected, through several bulky pipes, with two large gas tanks, which are linked to a small power plant. Though the power plant's installed capacity is only 2,400 kilowatts in the first phase, it is one of the few plants using coal mine gas as energy source in China. Using gas has brought about safety and profits to the coal mine.
Arcelor Acesita buyout talks to finish in 2005
Luxembourg-based steelmaker Arcelor's negotiations with several Brazilian pension funds to buy their stakes in specialty steelmaker Acesita will wrap up this year, an Arcelor executive told news agency AE Setorial.
The talks have dragged on longer than expected as pension fund managers, led by Previ, Petros and Sistel, debate with Arcelor the value of the shares, according to Jean Yves Gilet, Arcelor's director of stainless steel.
But it is no longer an option to trade a piece of Arcelor's new holding company, Arcelor Brasil, for the pension funds' stakes in Acesita, in which Arcelor holds 27.7%. "This alternative is no longer available, now that the new company Arcelor Brasil is already formed," he said.
Neither have the difficult negotiations soured Arcelor's fervor for Acesita. "We are happy with the results at Acesita and are optimistic about its future," Gilet said.
Arcelor, the world's second largest steel company, said July 28 that it would combine its stakes in long steelmaker Belgo-Mineira, steel slab and hot rolled coil producer CST and cold rolled and galvanized steel manufacturer Vega do Sul into one company, called Arcelor Brasil.
The deal is due to wrap up October 24. Because Arcelor is not the majority shareholder of Acesita, its stake in the company will not be included in Arcelor Brasil at this time, even though Arcelor controls Acesita's day-to-day operations.
