August, 20 2005
Has Orissa Govt granted POSCO lenient MOU terms?
Orissa being rich in Iron Ore has become a favored destination of all steel companies over last 12 months and the Government has received numerous proposals to set up steel plants ranging from small to mega ones. MOU with POSCO for investment of over 50,000 crores for setting up Mega Steel plant has become the point of discussion among all specially when the terms of this MOU are compared with others. This leads one to think about the rational of Orissa Government for offering preferential treatment to POSCO.
Although more than 37 MOUs have been signed for setting up steel plants, TATA Steels MOU signed in 2004 end can be taken as the benchmark as the basic policy can not undergo major change in a span of seven months.
TATA has announced investment of 15,000 crores for setting up 6 million tonnes plant as against POSCOs announcement of 51,000 crores for 12 million tonnes. The prorated difference of 21,000 crores remains unexplained even if we consider development of infrastructure by POSCO in a big way.
The other additional facility granted to POSCO is grant of the status of Special Economic Zone for tax purposes.
But, as any one would guess, the main sop to POSCO is given in the form of Iron Ore mining and rights for export by allocating a disproportionate quantum of iron ore. 600 million tons for 12 million ton for POSCO and 250 million tons for 6 million tones leaves a difference of 100 million tons. Orissa Government has also permitted the company flexibility in the choice as between domestic and imported ore. And is even willing to allot iron ore and coal blocks out of what is currently available with its own undertaking.
Steel majors fight for share in Chiria mine
The high quality iron ore 62-65% of Chiria mining belt in the West Singhbhum district has led to a fight among steel majors TATA Steel, SAIL, Mittal Steel and Essar Steel.
Chiria is endowed with a large number of mines, of which only eight are leased at present, all of them to Indian Iron & Steel Company, which is the only company working the mines there. IISCO used to have 10, but two of them were denotified early this year.
All the four companies have applied for captive mining leases on the mines of Chiria, whose treasure is estimated at 1.5 to 2 billion tonnes. That makes it the world's second largest deposit of high-grade iron ore after those in the Urals.
With every steel manufacturer worth its furnace having announced expansion plans, an assured supply of iron ore is increasingly emerging as the lifeline of their operations.
Indian Railways earns from Steel & Coal sector
Indian Railways have earned Rs. 11338.88 crores of revenue freight during the first four months of the current financial year ending July 2005 as compared to Rs 9618.34 crores during the corresponding period of last year.
Of the total earnings, Rs. 1135.81 crore came from transportation of 22.45 million tonnes of coal, followed by Rs. 143.72 crore from 4.19 million tonnes of raw material to steel plants, Rs. 132.72 crore came from 1.27 million tonne finished iron & steel, Rs. 191.34 crore from 3.50 million tonnes iron ore for exports.
Indian mineral production in June up by 5.8%
The mineral production in June 2005 recorded a growth of 5.86 per cent as compared to that of the corresponding month of previous year. The total value of mineral production (excluding atomic & minor minerals) in the country during the month was Rs.5,592 crore.
The contribution of coal was the highest at Rs. 2,025 crore (36 per cent). Next in the order of importance were: petroleum (crude) Rs.1,557 crore, natural gas (utilised) Rs.747 crore, iron ore Rs.607 crore, lignite Rs.187 crore and limestone Rs.143 crore. These six minerals together contributed about 94 per cent of the total value of mineral production in June 2005.
Production levels of important minerals in the month were : coal 288 lakh tonnes, lignite 26 lakh tonnes and iron ore 133 lakh tonnes.
Neelachal Ispat plans IPO to fund Rs 800cr expansion
Neelanchal Ispat Nigam Ltd NINL is planning an IPO to finance its Rs 800-crore expansion plan. While the size of the IPO is yet to be finalised, MMTC sources said that the company was planning to raise Rs 250 crore equity capital.
Currently, with a blast furnace capacity of 1.1 million tonne, NINL plans to add matching steel making capacity and a wire rod mill through the expansion project.
The company has recorded a profit of over Rs 200 crore in the first year of operations in 2004-05 and has also been awarded a captive iron ore mining lease by the Orissa Government. The company has also carried out corporate restructuring by merging its subsidiary Konark Met Coke Ltd with itself during the past year.
The proposal to invite 51 per cent strategic investment in NINL for expanding the blast furnace capacity from 1.1 million tonne to four million tonne was not accepted by the Orissa Government
The development also marks the end of a recent proposal by SAIL on picking up a "strategic stake" in NINL.
Iron ore policy on the anvil
Global steel majors such as Mittal Steel, Posco, Arcelor and Corus may soon have to list on domestic bourses if the recommendations of the Dang Committee on mining are any indication. If accepted, the recommendation may trigger acquisitions in the steel sector as one of the options for the proposed mandatory listing could be takeover of domestic companies. The other option for the foreign player is to set up an subsidiary and list it on the exchanges.In fact, sensing a possible spate of mergers and acquisitions, operators have started working overtime at small and medium steel counters.
Industry experts said the proposed mandatory listing of foreign steel companies was based on a quid pro quo principle: the government would give foreign companies mines of iron ore on a long-term lease so that they could get raw materials at a discounted rate. On their part, the global giants should also share their profits with domestic investors. An official with a steel company said the listing proposal would also help foreign companies to raise funds from the burgeoning domestic capital market.
It is expected that the proposal for mandatory listing, if converted into a law, would give time to foreign giants to list their shares after commercial operations. The Dang committee recommendations assume significance as it is one of the three panels to determine the national iron ore policy to be announced by the steel ministry shortly.
Thermal imaging system to detect slag in steel while tapping
The software system in a thermal imaging system provides steel plant engineers with the tools to develop and improve the transfer of steel from one process to another. The new SDS slag detection system from Land Instruments International combines the latest thermal imaging technology and almost 60 years' experience of the steel industry to control slag carry-over from furnace to ladle.
Once the system hardware is installed in a suitable position to view the tapping area, the pre-installed and configured image processing software works 'straight out of the box' with minimum set-up - a feature not available with any other system. The operator has access to all the data for quality control purposes, and can view critical information such as the live thermal image, steel and slag percentages, time versus percentages graph, alarm level and alarm status.
Secondary information such as tap number and sensor temperature is also available, but is less prominent so as not to distract the operator during the tap. SDS records each tap and simultaneously generates a log and graph of the steel/slag data. When a pre-set percentage of slag or steel is detected within the defined window, an alarm is generated to stop the tap and the video, text and graph files are saved and identified by tap number for later analysis.
AIM Resources Perkoa Zinc project in Burkina Faso
AIM Resources has garnered little attention but the market seems to be missing an opportunity. AIMs primary focus is its Perkoa zinc project in Burkina Faso, a project doubted by some due to the very limited infrastructure and landlocked location of the country in which it is located, but where the company plausibly believes will prove to be highly viable.
The project has the advantage of coming in at a reasonable initial capital expenditure requirement of $40 million, in return for an output of around 65,000 tonnes/year of zinc metal, beginning in 2007. The Perkoa deposit amounts to approximately 7 million tonnes at a relatively high grade of 17.7%. At current zinc prices, the projects projected output would yield revenues in excess of $80 million per year.
The viability of the Perkoa project will naturally be affected by the price of zinc, which after ascending to a high of $1400/t in March dipped back beneath $1200/t in July, but has since begun what may be a recovery towards its earlier peaks. Demand for zinc is closely tied to the usage of steel, the galvanic coating of which is its primary application, and demand for which is consistently forecast to continue rising.
Perkoa also has the advantage of strong support from the government of Burkina Faso, which is desperate for a share of the burgeoning mining investment that has been precipitated by the recent commodities boom
A number of other avenues are also available to AIM, the most interesting of which is its joint venture with BHP Billiton on the Mumbwa copper project in Zambia, which may prove to host significant amounts of highly desirable iron oxide copper gold type mineralisation. Uranium signatures also raise the rather tantalising possibility of an Olympic Dam style deposit.
Onesteel to target small consumers vide a retail network
Australian steel major Onesteel is planning to fatten profit margins and to displace imported steels by beefing up its distribution business with a new emphasis on the overlooked area of small builders and fabricators. OneSteel would open its first five retail steel outlets aimed at the occasional user
The new distribution centres would be based on the business model devised by Midalia Steel, which OneSteel acquired last year. Midalia had an annual turnover of $45 million through its 11 outlets in Western Australia. Midalia had more sales people on the ground and had built a business based on selling smaller lots and offering a higher level of service at a slightly higher cost because the new outlets would not be like the existing OneSteel distribution network, which is geared more towards selling steel in 1000-tonne lots.
OneSteel's distribution division, which generated about $1.79 billion of the group's $3.94 billion revenue last financial year, had been aimed at large users of steel who usually had their own in-house expertise
In addition, OneSteel has opened up new markets, with the $15 million steel rope plant just completed in Newcastle. The plant makes eight-strand steel rope up to 143-millimetres thick for use on the giant drag lines that strip overburden in the Queensland coalmines. The new plant could make the steel wire for use in heavy-duty conveyor belts used in many mine sites
Hebei Province counts on ports for growth
Hebei, despite its coastal location and proximity to Beijing and Tianjin, has lagged behind other coastal provinces over last two decades in economic and social development. But three seaports in North China's Hebei Province are expected to become new economic engines, not only for the province but also for Beijing and Tianjin municipalities. The provincial government has decided to invest heavily to expand the capacity of the Qinhuangdao, Caofeidian and Huanghua ports along the Bohai Bay coast, in the coming years
Guo Gengmao, vice-governor of Hebei, said that about 100 billion yuan (US$12.3 billion) would be used in the redevelopment of Caofeidian port, which is near Tangshan, a major city in the province, to meet the rising demand for shipping coal from North China to South China, and to expand capacity for iron ore and crude oil imports. Located about 225 kilometres from Beijing, the port is the new site for the Beijing Shougang Group, which is moving all of its environmentally unfriendly operations out of Beijing. Shougang, China's fourth largest steel maker, imports large quantities of iron ore from abroad to meet its production needs.
The three ports are expected to ease the bottleneck in coal transportation from inland areas of North China to the economically booming areas of East and South China. The Caofeidian port, famous for its rail links and natural deep-water sea-lanes, is to handle 200 million tons of coal per year once it reaches full operational capacity in five years time.
Worthington pays dividend for 151th consecutive quarter
The board of directors of Worthington Industries, Inc. today declared a regular quarterly dividend of $0.17 per share, payable on September 29, 2005, to shareholders of record September 15, 2005. This marks the 151st consecutive quarter that Worthington has paid a dividend since it became a public company in 1968.
Worthington Industries is a leading diversified metal processing company with annual sales of approximately $3 billion. The Columbus, Ohio, based company is North America's premier value-added steel processor and a leader in manufactured metal products such as metal framing, pressure cylinders, automotive past model service stampings, metal ceiling grid systems and laser welded blanks. Worthington employs more than 7,500 people and operates 65 facilities in 10 countries.
Founded in 1955, the company operates under a long-standing corporate philosophy rooted in the golden rule, with earning money for its shareholders as the first corporate goal. This philosophy, an unwavering commitment to the customer, and one of the strongest employee/employer partnerships in American industry serve as the company's foundation.
Mr Rinat Akmetov in footsteps of Mikhail Khodorkovsky
Ukrainian richest man Mr Rinat Akhmetov seems to be following the footsteps of Russian billionaire Mikhail Khodorkovsky, as a month after Akhmetov's July 18 no-show for a Q&A with law enforcement officials, authorities in Donetsk raided offices of Luks, a company allegedly controlled by Akhmetov. Ukrainian papers reported prosecutors are building a tax evasion case against the oligarch. In a statement, Luks denied it had violated tax laws, adding that the investigation was an act of pressure directed at the biggest Ukrainian businessmen.
An Akhmetov spokesperson says the tycoon is on holiday out of the country. Back in April, Akhmetov was suspected of leaving Ukraine to avoid a potential arrest like that of close associate Boris Kolesnikov, who faces charges of extortion. Akhmetov stated he had traveled on routine business. His uncertain whereabouts put a damper on a proposed consolidation and possible IPO announced by the general manager of Akhmetov's holding company System Capital Management in July.
Investigations into how Akmetov built his business empire have intensified since the new administration, one which Akhmetov did not favor in last year's heavily contested elections, led by President Victor Yushchenko and Prime Minister Yulia Tymoshenko came to power.
Son of a coal miner, Akhmetov built his Ukrainian coal and steel empire in the mid-1990s by forging ties with Viktor Yanukovych, then the governor of eastern Ukraine's coal and steel rich region of Donbas, later prime minister and losing 2004 presidential candidate. With fellow billionaire Viktor Pinchuk won a controversial $800 million bid in 2004 for Ukraine's largest steel company, Kryvorizhstal. A Kiev court has ruled the sale illegal, but the two are appealing.
Dongkuk extends SBQ slab supply agreement with JFE
Dongkuk Steel Mill Co, South Korea's third-largest steelmaker, extended an agreement to buy raw materials from Japan's JFE Steel Corp. The current three-year accord for JFE Steel to supply 2 million tonnes of steel slabs expires in February.
Dongkuk Steel buys steel ship building quality slabs and turns them into plates for sale to Hyundai Heavy Industries Co., Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries Co., the world's threeFriday largest shipbuilders. Dongkuk Steel and Posco, the nation's largest steelmaker, are the only local producers of steel plates for ships.
Corus to invest $18mil in medium section mill at Scunthorpe
Corus has announced a $18 million investment in its medium section mill at its Scunthorpe steelworks in the UK. The investment involves the installation of an automated distribution center for sections produced at the mill.
This new facility will improve the quality of delivered sections and the speed of dispatch. The new sections distribution centre is expected to be operational by autumn 2006, and takes the total investment at the Scunthorpe steelworks to over GBP 200-mil in the past two years.
The Corus Group is one of the world's largest metal producers with facilities in the UK, the Netherlands, Germany, France, Norway, Belgium and Canada.
Japan's July steel output drops for 1st month in five
Crude steel production in Japan, the world's second-biggest steelmaking nation, fell in July for the first month in five as demand for lower-grade products declined because of competition from China. Steel output fell 1.2 percent to 9.43 million metric tons from a year earlier
Electric-furnace steelmakers are more affected by Chinese imports because impurities in the scrap limit the quality of products they make. Tokyo Steel Manufacturing Co. and other electric-furnace steelmakers cut production as imports of H-beams and lower-grade hot-rolled coil from China forced down prices. Electric-furnace steelmakers, which produce steel by melting scrap, produced 7.1 percent less last month, or 2.24 millions tons.
Production from blast-furnace steelmakers was little changed, rising 0.7 percent from a year ago to 7.19 million tons. Nippon Steel Corp. and other blast-furnace steelmakers make the alloy from raw materials such as iron ore and coking coal.
GSII Changes Name to Global Steel Philippines
Global Steel Philippines (GSP) is the Philippines largest steel manufacturer, with a capacity of two million tons per year. It exports 70 percent of its production primarily to other Asian nations. Over 1,000 skilled Filipino workers are employed by the company in Iligan where its manufacturing plant is located. GSP is a subsidiary of Global Steel Holdings (GSH), which has operations in Bosnia, Bulgaria, Libya, Nigeria, India, and the Philippines. Worldwide, GSH produces in excess of 14 million tons of steel every year.
Global Steelworks International Inc GSII, today announced it has changed its corporate name to Global Steel Philippines Inc (GSP). GSP is a subsidiary of Global Steel Holdings Limited (Global Steel), a global corporation which operates and manages businesses in the iron & steel, coke, mining and minerals, metals, energy and infrastructure sectors. The change of name not only reflects the company's commitment to the Philippines but also presents a clear, strong, and unified brand presence for Global Steels operations in Asia, Africa, and Europe. The new name will be used in all the companys subsidiaries and as in GSP's case, will incorporate the name of the country in which it is located.
A new logo reflecting reflect the vision and purpose of Global Steel has been filed with the Department of Trade and Industrys intellectual property office, according to company executives. It will replace the existing logo which has been used since the company was incorporated last year and will be used uniformly all over
Worldwide Global Steel manufactures approximately 14 million tons of steel annually. The companys plants are located in Bosnia, Bulgaria, Libya, Nigeria, India, and The Philippines.
Russia ups steel output 0.5%
Russia edged crude steel production up 0.5% year-on-year to 38 million tonnes in January-July, the Federal State Statistics Service said. Converter steel output fell 0.3% to 22.64 million tonnes but electric steel output grew 15.5% to 7.58 million tonnes.
Steel production rose 1.2% at Severstal, 2.5% at West Siberian Metallurgical Combine (ZSMK), 5.8% at Nizhny Tagil Metallurgical Combine (NTMK), 6.2% at Urals Steel, 15.7% at Novokuznetsk Metallurgical Combine (NKMK) and 3.1% at Oskol Electrometallurgical Combine (OEMK). It fell 2.4% at Magnitogorsk Iron & Steel Works (MMK), 11.7% at Novolipetsk Metallurgical Combine (NLMK) and 0.8% at Chelyabinsk Metallurgical Combine (ChMK).
Finished roll production in Russia grew 0.9% year-on-year to 31.1 million tonnes in the seven months and Crude steel output rose 3.4% to 58.854 million tonnes in 2004.
US Steel industry slogging through soft period
US steel mills have trimmed production but continue to slog through a quarter that many companies say will be the low point of the year and a dramatic drop from the third quarter of 2004, when the market hit what many now see as an artificial high. Six weeks into the third quarter, steel makers are struggling to balance lower prices and still-sluggish demand for their products with the soaring costs of scrap and natural gas.
Key industry players, including Netherlands-based Mittal Steel Co., Pittsburgh-based U.S. Steel and North Carolina's Nucor Corp., have all warned to expect a drop in third-quarter results, and analyst Charles Bradford says some companies could report profits 30 percent to 100 percent below the same period last year.
Last year's third quarter was the best the industry ever had. There were companies who made as much in a year in their prior histories as they made that quarter
Steel prices skyrocketed last summer, driving up the cost of everything from cars and tractors to home appliances. But those record prices and the rampant buying turned out to be a bubble, with steel users building up inventory in hopes of waiting out further price increases, then holding back on new orders.
Though China had purchased massive amounts of U.S.-made steel in 2003, that buying didn't continue in 2004. Instead, the Chinese looked to Europe and other producers with lower costs as they supplemented their own rapidly growing industry.
While analysts say that consumption continued in the early part of 2005, several steel executives have said they believe the inventory is now being used up, and orders are likely to quicken in the fourth quarter.
US considers trade barriers against Chinese steel pipe
Chinese steel pipes have become the latest target of US safeguard investigations, the China Daily reported, citing sources from the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters. The US last week launched a probe to see if safeguard measures were warranted against two kinds of China-made circular welded non-alloy steel pipes, or standard pipes, the report said.
Last year, China exported standard pipes valued at some 110 mln usd to the US, up 657.5 pct from a year earlier, and the figure hit 87.5 mln usd in the first half of this year, reflecting a 234.6 pct year-on-year increase.
The investigation began after seven US steel-pipe producers and two industrial associations filed a petition claiming that a surge in imports of the Chinese products had disrupted the US market and harmed the industry. They asked the US government to set a nine million ton quota on imports of standard pipes and restrict annual growth to less than five pct over the next five years. More than 50 enterprises in China are involved in the investigation.
The US International Trade Commission is scheduled to decide in October whether market order has been disrupted and will publish the final ruling early next year.
Coal mine in northwest Colorado to boost output by 40% in 3 years
Coal production from the Twentymile Mine in Routt County, one of the most productive underground coal mines in the US, will increase by almost 40 percent in the next three years, mine owner Peabody Energy has announced. The Twentymile Mine produces high-quality, low-sulfur coal that is in demand from power-generating utilities throughout the country.
Last year, the Twentymile Mine produced 8.7 million tons of coal. During the next three years, annual production is expected to reach 12 million tons, Sutton said.
Peabody Energy also plans to replace the current longwall mining system at Twentymile with a new, state-of-the-art longwall system that the company says will boost efficiency and productivity. Sutton said the new system will cost about $60 million.
Coal from the Twentymile Mine is shipped to customers in the Midwest, Southwest, Canada, and Mexico.
Siemens to supply electrical for mine winder in Shandong
A consortium consisting of the Siemens Industrial Solutions and Services Group (I&S) and Siemag GmbH, Netphen, has received orders from Yankuang Group Corp. Ltd. in China to install new mine winder installations in its Zhaolou mine located in Shandong province. The project includes supply and commissioning of three high-performance winders. Synchronous drives with DC link converters will be used, thus increasing availability and reducing system perturbations. The value of the contract for Siemens is around seven million euros and the winding machines are scheduled to start operating at the end of 2007.
Yankuang Group Corp. Ltd has an annual hoisting capacity of over 40 million tonnes. This makes it one of the leading coal producers in China. Due to the increasing demand in the country, Yankuang is currently developing the Zhaolou and Wanfu mines in the Juye mining area. The coal reserves there are estimated at more than 200 million tonnes. In Zhaolou, three million tonnes of coking coal is to be extracted per year in the first expansion phase from the end of 2007 onwards. The coal will be processed locally as well.
Council offers conditional support to coal exploration
Liverpool Plains Shire Council has given provisional backing to coal exploration in the Caroona district. The NSW Government has called for expressions of interest from mining companies interested in developing 500 million tonnes of coal which is believed to be in the district.
It has raised concerns from members of the local community who are worried mining may have an impact on the local black soil plains and underground water reserves. The council's environment and community services director, Bob Stewart, says an environmental impact statement will be taken into account before the proposal goes ahead.
Thai steel industry to benefit from Thaskin to visit Japan
Thai Prime Minister Thaskin Shinawatra plans to visit Japan on Aug. 31 for signing a free trade agreement between the two countries forged earlier this month, Kyodo News Agency said.
The free-trade agreement was reached Aug aims to reduce tariffs on US$35 billion (euro29 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 eight-10 years, in order to give time to Thai steel manufacturers to prepare for the competition.
Stelco finalizes sale of Stelpipe to Romspen Investment Corp
Stelco Inc. has finalized its sale of Stelpipe Ltd.'s assets to Toronto-based financier Romspen Investment Corp., part of the steelmaker's effort to slim down before emerging from bankruptcy protection. The Hamilton-based company did not disclose the sale price of its Welland, Ont.based subsidiary.
Romspen will carry on Stelpipe's operations, which will be renamed Lakeside Steel Corp. Ltd. This is the Toronto company's first foray into the steel business.
Mr Bill McKenzie steps down from Mittal Steel Weirton
The head of Mittal Weirton, Bill McKenzie has reportedly stepped down as Plant Manager. Bill McKenzie began overseeing the plant shortly after ISG bought the plant. He continued working after the former Weirton Steel company was purchased by Switzerland based Mittal Steel.
Its not clear why McKenzie is resigning. Union stewards were told late this afternoon about the resignation. McKenzie, unlike company heads before him was well known for working inside the mill along with union workers although he was management.
Fording Canadian Coal to reorganize
Fording Canadian Coal Trust said it's proceeding with a reorganization that includes a three-for-one split of its units after receiving the green light from an Alberta court. The big metallurgical coal producer also said Friday it has received a favourable ruling from a federal court which dismissed applications for judicial review of development approvals of the Cheviot open pit mine at Fording's Cardinal River operations in Alberta.
Elk Valley Coal Partnership, which is 60 per cent owned by the trust's operating subsidiary Fording Inc., received the rulings, which concluded that the federal Department of Fisheries and Oceans appropriately exercised its duties in reviewing the coal project, which was approved for development in 2000.
The Elk Valley Coal partnership is the world's largest exporter of metallugical coal and expects to supply about 27 million tonnes of high-quality coal to the international steel industry this year.
Japan requested to assist in privatization of Pakistan Steel
Pakistan sought technical and financial assistance in seven important areas from Japan during the recent Pak-Japan Economic Dialogue held at Tokyo. Japan was requested to participate in the upcoming privatisation of Pakistan Steel Mills and Pakistan State Oil (PSO).
The Japanese authorities were also requested to re-locate their industries to Pakistan on the pattern of their earlier venture in Thailand. It was also urged that Japan assign priority for initiation of discussion on the Avoidance of Double Taxation Agreement between Pakistan and Japan.
Maverick Tube announces Jack B. Moore as Director
Maverick Tube Corporation announced today that its Board of Directors has elected Jack B. Moore as a Director. Mr. Moore, 52, is Senior Vice President of Cooper Cameron Corporation and President of its Cameron Division.
Prior to joining Cooper Cameron in 1999, Mr. Moore spent twenty-three years with Baker-Hughes Incorporated in a variety of executive positions. He has a B.B.A. from the University of Houston and serves on the board of directors of the Petroleum Equipment Suppliers Association (PESA) as well as the boards of several charitable and educational institutions.
Maverick Tube Corporation is a St. Louis, Missouri, based manufacturer of tubular products in the energy industry for exploration, production, and transmission, as well as industrial tubing products (steel electrical conduit, HSS, standard pipe, pipe piling, and mechanical tubing) used in various applications.
Thermodynetics announces receipt of a $3 million order
Thermodynetics Inc. reported that its wholly owned subsidiary, Turbotec Products, Inc., received an order for approximately $3 million to provide enhanced surface stainless steel tubing for commercial boiler applications. The enhanced tubing increases the boiler's heat transfer capabilities, thereby increasing the boiler's performance.
Thermodynetics, Inc., has been engaged in the manufacture of high performance, high quality metal tubing and tubing assemblies to the heat transfer and other industries since 1972. Its Turbotec Products subsidiary is a world leader in enhanced heat transfer technology. These products are marketed in the United States, Canada and abroad in the space conditioning, refrigeration, automotive, biomedical, plumbing, appliance, water heating and aerospace industries.
Mauser-Werke acquire Russell-Stanley Holdings and subsidiaries
Russell-Stanley Holdings, Inc. today announced that it has entered into a definitive asset purchase agreement with an affiliate of Mauser-Werke GmbH & Co. KG and One Equity Partners, pursuant to which Russell-Stanley and certain of its subsidiaries including Hunter Drums Limited would sell substantially all of its assets to Mauser.
In a separate announcement issued by Russell-Stanley, the Company stated that to effectuate the asset sale under the Purchase Agreement, Russell-Stanley and certain of their U.S. domestic subsidiaries filed prepackaged reorganization cases under Chapter 11 of the Bankruptcy Code and a prepackaged Plan of Reorganization
This combination with Mauser will provide the Russell-Stanley business with the additional resources necessary to continue to meet and exceed the expectations of our customers by partnering with a truly global leader in industrial packaging
Russell-Stanley Holdings, Inc. is North America's largest plastic drum manufacturer, second largest steel drum manufacturer, and a leading industrial container supply chain management company. Information on the company can be found at
Mauser-Werke GmbH Co. KG is a global leader in industrial packaging, with its headquarters in Bruehl, Germany.
China Remains Steel Hot Spot
World crude steel production for the 61 countries reporting to the International Iron and Steel Institute, Brussels, was estimated to be 90.3 million metric tons in July, with China accounting for nearly one-third of that total.
The global figure for July is 4.5 percent higher than for the same month of 2004. Chinese production was 29.2 million metric tons in July, a rise of 28.6 percent compared to July 2004. Total crude steel production in China is 193.8 million metric tons for the first seven months of 2005. This is a rise of 28.1 percent compared to the same period of 2004.
Crude steel production in the United States was 7.6 million metric tons in July, representing a decrease of 9.1 percent compared to July 2004. Year-to-date production in the United States is 54.5 million metric tons, 4.7 percent lower than for the first seven months of 2004. Production in Canada was 1.1 million metric tons, 13.8 percent lower than in July 2004. Total Canadian production for the first seven months of the year is 9.2 million metric tons, 2.7 percent lower than for the same period last year.
European production shows a number of estimates because of the summer holidays. However, crude steel production in Germany was 3.5 million metric tons in July, a fall of 10.4 percent compared to the same month last year. The United Kingdom produced 1.0 million metric tons of crude steel in July, 9.4 percent lower than for July 2004. Turkey produced 1.7 million metric tons of crude steel in July, just 0.5 percent lower than in July of 2004.
Liberian Government rushes to sign Mittal Steel deal
The National Transitional Government of Liberia is reportedly rushing to sign and ratify the One Billion United States Dollars Mittal Steel deal before the elections.The action comes quickly after the withdrawal of the Writ of Prohibition from the Supreme Court by Global Infrastructure Holdings Limited (GIHL).
Followers of the case suspect collusion among the two Mittal brothers, Pramod and Laskhmi, saying that the rush to sign and ratify the deal before the elections can only benefit one presidential candidate, Varney Sherman of the Liberian Action Party, whom they suspect has been enjoying a massive support from Chairman Bryant. Many believe that a transaction of this nature commands legal fees approaching millions of dollars, and they say such an amount would certainly go to Sherman Law Firm which offers legal counsel for Mittal Steel. Thus the signing of this agreement under current circumstances and the dispatch being utilized are indications of a feverish attempt to fill the presidential coffers of lawyer-turned-politician.
In other developments, GIHL has absconded Liberia, owing hundreds of thousands of dollars in consultancy fees and other obligations. A confidential source told the Analyst that a lawyer representing GIHL at the conclusion of the proceedings at the Supreme Court is threatening legal actions against the company for non-payment of fees.
Negotiations between the Minerals Technical Committee (MTC) and Mittal Steel have reportedly reached an impasse as most of the arguments advanced by Mittal Steel, including its preparedness to fund the LIMINCO project out of its multibillion dollar investment fund have not been met instead the company is asking the Government of Liberia to guarantee hundreds of millions of dollars in loan to fund the project.
The sources say Mittal is now proposing a complex arrangement of equity participation that will eventually see the company owning ninety percent of the project while the Government of Liberia will get a measly ten percent.
A mineral economist said the use of debt financing will adversely affect profitability of the project as interest income should be significant. This will reduce net profits and impact negatively upon future dividends flow. The expert says the MTC should employ the services of experts, probably investment bankers to advice them on the complex financial nature of the one billion dollar investment.
More significantly, many politicians say the rush to sign this agreement only week before general elections in Liberia under mounting allegations of massive corruption within the NTGL should be resisted. They would prefer that the Government of Liberia defer negotiations and signing of this agreement to the incoming administration in January 2006.
IVES forecasts decline in H2 steel sales in Venezuela
Venezuelan steel institute IVES estimates domestic steel sales will suffer a slight decline during the second half of 2005.
"At the beginning of the year we were bullish we would improve on 2004 results, but now we are not so certain that is going to happen," IVES president Carlos Vargas said. The sector's performance in 1H05 was similar or even a little better than same period last year, Vargas said. But domestic and global demand is expected to slow down for the rest of 2005.
Domestic sales in 1H05 came to 1.03Mt compared to 1.05Mt in the same period last year. These results were offset by exports that rose to 1.08Mt from 909,000t.
Regarding lawmaker Andr Velquez's complaints about sending all basic industry scrap metal to Cuba, Vargas said the mining and basic industries ministry (Mibam) is responsible for the issue. Vargas added that Venezuela's government is conducting feasibility studies to install a smelter, such as an electric arc furnace, on the Caribbean island to produce some types of steel using scrap. Scrap is a scarce product in Venezuela upon which the steel industry depends. "So we have always tried to make sure the availability of scrap in the country is guaranteed," Vargas said.
Canacero reduces 2005 growth forecast to 3% for Mexico
The Mexican steel industry has cut its growth expectation for the year due to lower global demand and a slowdown in the country's economy, financial newspaper El Financiero reported.
The director of the country's iron and steel chamber Canacero, Octavio Rangel, said the chamber had reduced its growth prediction to 3% in 2005 from 7% as stated earlier in the year. "As the results have been going up to June, we're not going to reach annual production of 17.8Mt of steel. Now we're hoping to reach 17.2Mt," Rangel said.
On Thursday, Brussels-based International Iron and Steel Institute (IISI) reported that Mexican crude steel output fell 3.8% in July to 1.4Mt when compared with same month 2004. Production during the first seven months was 0.4% higher than same period 2004 at 9.8Mt
Paraguays President Duarte asks Acepar to pay debts
Paraguay President Nicanor Duarte has asked the board of steelmaker Acepar to pay US$24mn in debt due to the government. Duarte said a legal team has been established to resolve the issue and did not rule out returning the company to state ownership if it fails to meet commitments with the government, according to newspaper reports.
But an Acepar executive told press that under the privatization process, which required payments of US$40mn, the company has not missed any deadlines, and has already paid US$14mn. Acepar had until 2009 to pay off the total outstanding debt of US$26mn, the executive said. "In November 2004 we paid US$2.3mn for the first installment of the outstanding amount," he explained.
Acepar was privatized in 1997 and is now controlled by an Argentine and Paraguayan business consortium, while workers hold a 33.33% stake. Acepar, 37km from capital Asunci in Villa Hayes department, has a rolled steelmaking capacity of 60,000t/y and exports to Argentina, Brazil, Uruguay and the US.
Judge supports Sicartsa strike & company could face closure
Mexico City's third district A labor judge Silvia Ortega has validated the union strike at Grupo Villacero steel unit Sicartsa, which started August 1. The decision supports the mining-metalworkers union STMMRM that is leading the strike action, which the federal government had declared illegal earlier this month.
But the company has turned on the pressure, saying the judge's decision does not matter because "a lot" of the strikers want to cross the picket line and return to work
Protesters are blocking deliveries of primary materials to Sicartsa's coking plant which helps heat the furnace. If the company cannot heat the furnace, the plant would shut down and take at last two years and US$400mn to put back into operation.
The strike is taking its toll on Sicartsa, which is losing 5,000t/d at a cost of US$3mn, Villarreal said.
Sicartsa has 2.35Mt/y liquid steel and 2.0Mt/y finished product capacity.
Venezuelan Mibam & C Holdings to go for seamless pipe plant
Venezuela's mining and basic industries ministry (Mibam) and Swiss company C. Holding Group have inked a letter of intent to reactivate a Venezuelan seamless pipe plant to serve the oil industry
President Hugo Chez has asked the two to execute the US$536mn project as soon as possible, ABN said without specifying a plant name or location. Company shareholders must now approve the plan before the project can advance.
Chilean CAP to issue US$132mn bond to fund investments
Chilean iron and steel company CAP will place by end-2005 a bond worth US$132mn on the local market to finance part of its investment needs over the next four years. Specifically, CAP will place bonds worth 4 million inflation-indexed units known as the UF in early-October to finance the expansion at its industrial complex Huachipato, in southern Chile's Region VIII, among other projects. Fitch Ratings assigned its A+ rating to the 15-year issue.
CAP announced last week it would invest US$83.5mn to expand production of liquid steel to 1.45Mt/y from 1.20Mt/y at its main Huachipato plant.
Chile's largest steelmaker, CAP posted a first half 2005 profit of US$122mn, up 123% year-on-year. The company also operates iron ore mines in northern Chile through its mining unit Minera del Pacico.
Brazilian Gerdau expects Colombian Diaco takeover in 2wks
Brazilian long steel producer Gerdau expects to secure a majority stake in Colombian iron and steel group Diaco in two weeks. Gerdau will keep the purchase offer open to minority shareholders through Banistmo Capital Market Group, Osvaldo Schirmer, Gerdau executive finance VP and investor relations director was quoted as saying.
Shareholders unable to take part in Diaco's tender offer on August 17 will now be able to sell their shares through the BVC shareholder round to be held from August 23-September 3, according to Colombia's stock exchange BVC.
Banistmo Capital Market Group already bought 2,606,642 Diaco shares on behalf of Gerdau for US$1.98mn, which accounts for 1.51% of the steelmaker's shares. Each share was sold for US$0.76. Banistmo hopes to buy up to 10.72% of shares in the Colombian company, which sells 50% of the 500,000t of steel consumed annually in Colombia. Not including the 1.51%, Gerdau already held 42.2% in Diaco through Banitsmo Capital.
Porto Alegre-based Gerdau delivered 12.6Mt of steel in 2004, up 3.4% from 2003. The company operates throughout the Americas, including Argentina, Brazil, Canada, Chile, Uruguay and the US.
S&P report examines Brazilian steel industry
First-quarter 2005 results reported by Brazilian steel makers continued showing strengthened financial profiles and very robust cash flows, said a Standard & Poor's Ratings Services report released today titled, "Ten Charts To Size Up The Brazilian Steel Industry."
Despite positive short-term trends, however, the scenario ahead is a little bit cloudier. Even though Brazilian steel makers are well positioned to face the effects of increased coal and iron ore prices in coming quarters, it is also fair to note that those costs make them more sensitive to cash-flow volatility.
"The current situation in the Brazilian steel industry highlights the importance of proactive and conservative financial measures. We believe financial policy will make the difference in the medium- to long-run, as the steel industry is far from relieving its cyclical and volatile characteristics, making it prudent for companies to prepare themselves for less favorable, or harsher, market and price conditions," said Standard & Poor's credit analyst Reginaldo Takara.
ThyssenKrupp board clears Brazilian Sepetiba steel mill plans
ThyssenKrupp AG's supervisory board has granted preliminary approval lans to build a 4.4Mt/y steel slab plant at Brazil's Sepetiba port in Rio de Janeiro state. The final decision on the project will be made 'after clarification of various external factors' at the next supervisory board meeting.
The US$1.88bn steel mill project also includes developing port infrastructure.
Brazilian iron ore miner CVRD will hold a 10% stake in the project. The mill is expected to involve a total investment of 1.5 billion euros with 90% share from ThyssenKrupp and will produce 4.4 million metric tonnes of slabs per year.
ThyssenKrupp recorded 154mn euros (US$187mn) in net income for its third quarter ending June 30, 2005, down from 323mn euros year-over-year, as costs of sales grew by 1.18bn euros to 9.42bn euros. Net sales rose 12% during the period to 11.3bn euros. Steel segment sales increased 12% to 4.0bn euros, while the division's income grew to 401mn euros from 347mn euros.
Timken makes senior management changes
The Timken Company announced that Michael J. Hill has been named Senior Vice President of Supply Chain Management. Mr. Hill, who was previously VP Manufacturing for the Industrial Group, will report to Glenn A. Eisenberg, Executive Vice President Finance and Administration. In his new position, Mr. Hill will be responsible for purchasing, order fulfillment, logistics and manufacturing strategy.
Mr. Hill began his career with Timken in 1974 in engineering. He has served in leadership positions in engineering and technology in Timken's U.S., Latin American and European operations. In 1993 he was named director of global purchasing and logistics and in 1995 general manager of the Faircrest Steel Plant. He has overseen manufacturing for the Industrial Group since 2000.
He succeeds Donna J. Demerling, who was previously senior vice president of supply chain transformation, has been named Senior Vice President Quality and Lean Six Sigma and will report to James W. Griffith, the president and CEO. Demerling will be responsible for quality assurance throughout all of Timken's business processes, including product design, manufacturing, supply chain and administrative areas. She will continue to lead the lean six sigma function.
Demerling began her career with the company in 1972. In 2003, she assumed the newly created role of senior vice president of supply chain, and built a new organization that integrated the efforts of purchasing, order fulfillment, logistics, and manufacturing strategy.
The Timken Company keeps the world turning, with innovative ways to make customers' products run smoother, faster and more efficiently. Timken's highly engineered bearings, alloy steels and related products and services turn up everywhere with operations in 27 countries, sales of $4.5 billion in 2004 and 26,000 employees.
Voestalpine Group continues record figures in the Q1
The first quarter of the 2005/06 business year continues the extremely successful 2004/05 year. Benefiting from the outstanding development in the Division Railway Systems, a largely stable and positive situation in the Divisions Steel and Profilform, as well as the clear upwards trend in the division motion, all the key figures showed significant increases as compared to the same period of the last business year.
Revenue went up by 23,8 % from EUR 1,347.4 million to EUR 1,668.5 million.
Profits from operations before depreciation (EBITD) increased by 83.2% from EUR 162.4 million to EUR 297.6 million. This means that the EBITD margin rose to 17.8% in contrast to 12.1% during the comparable quarter of the previous year.
Profits from operations (EBIT) went up from EUR 94.4 million to EUR 204.9 million. This corresponds to 117% growth. This means that the EBIT margin is at 12.3% as compared to 7% in the first quarter of 2004/05.
The profit before tax (EBT) came to EUR 198.4 million and went up as compared to the previous year's figure of EUR 81.6 million by 143.1%.
This results in a profit for the period of EUR 148.2 million as compared to EUR 50.4 million in the previous year corresponds to an increase of 193,9%.
All of the most important Group companies showed clearly positive operating results in the first quarter of the current business year.
