August, 05 2005
Idea of setting up PSU steel behemoth may be scrapped
The governments intent to create a public sector steel behemoth through mergers and acquisitions of smaller entities is likely to be reworked. Instead of creating a single large public sector steel entity engaged in the entire vertical chain of the sector, the Centre is now thinking whether it will be better to develop two or more large PSU entities
According to sources, the change of thinking has also been forced as the idea to merge RINL with SAIL does not find any taker either with formers workers union or with the Andhra Pradesh government.
Earlier, the steel ministry had indicated that it was in favour creating a single strong PSU steel entity through mergers of acquisitions revolving around countrys largest steel maker SAIL and had even indicated to a possible merger of RINL with it.
It has also been suggested that since SAIL is already a large PSU with concrete plan to expand capacity to 20mt by 2011-12, adding additional large capacity through mergers would not be feasible. Moreover, with clear geographical advantages of both RINL and SAIL would permit them to scale up operations further and to compete in the market with other players without directly interfering in each others territories.
Tata Steel to buy equipment for expansion
Tata Steel, the country's largest private sector steel maker, said Thursday that the company has placed order for a new blast furnace as part of the next phase of expansion at its Jamshedpur facility.
The 2.5 MTPA blast furnace order has been placed to a consortium of Paul Wurth-Italia and Larsen and Toubro, said a company statement issued to the Bombay Stock Exchange.
This is the second major order in this phase of expansion as it had placed order for the 2 MTPA sinter plant with L&T and Outokumpu, the release added.This is the second major order in this phase of expansion.
The company said the spurt in production was expected to continue as the major facilities planned for the one million tonne expansion programme have been commissioned.
Zenith net up in Q1
Zenith Ltd, a part of the Yash Birla group has posted a net profit of Rs 165 lakh, as compared to Rs 159 lakh in the corresponding period last year, registering an increase of 3 per cent during the first quarter ended 30 June, 2005.
The sales for the quarter stood at Rs 7191 lakh, as compared to Rs 9631 lakh in the same quarter last year, an decrease of 25 per cent.
Zenith is producing steel pipes are used in constructions, agriculture and industrial sectors in India and overseas. It is also known for its excellence in quality in structural industries, scaffolding, electric pole, telecommunication, bore well, and conveyors. The company also manufacturers bigger square and rectangular hollow sections and the galvanised steel pipes products command a sizeable market share amongst the most popular brands worldwide. The company exports approximately 40 per cent of its total production.
CIL adopts latest technology for coal exploration
Coal India Limited (CIL), the public sector coal major is upgrading the equipments from time to time depending upon the need and the efficiency. The techniques and strategies adopted in India compare favourable with international practices and best suited for geological nature of India coalfields.
CIL recently imported two high-tech geophysical instruments for borehole logging. Two deep capacity drills are expected by September 2005 for taking up exploration of deep-seated coal seams. Better softwares / equipments for geological modeling, web enabling and coal bed methane assessment in coal are also under process of procurement within the Xth Plan period.
Fieo estimates losses to exporters at Rs 4,500 cr
The week-long unprecedented deluge from July 26 has caused heavy losses to exporters using the Jawaharlal Nehru Port (JNP) and the Nhava Sheva International Container Terminal (NSICT) in the region of Rs 4,500 crore, according to the Federation of Indian Export Organisations (Fieo) estimates.
"With the roads damaged and the rail traffic in the Ports held up, no cargo moved out and exporters as a result are facing huge losses of up to Rs 4,500 crore", estimated Mr Shyam Kumar Saraf, President of Fieo-Western Region.
"Most of the damages are to the exporters of perishable goodssuch as fruits and vegetables and marine food productsas no rakes went into the Port due to heavy rains", he added.
The garment export industry expects a loss of around Rs 300 crore and another Rs 100 crore in refurbishing costs for machinery and raw material.
At least 200 units were flooded in the Jogeshwari, Saki Naka areas, pointed out Mr Amit Goyal, President of the Apparel Export Promotion Council (AEPC).
Expansion projects of CIL
Fifteen major expansion /extension coal projects have been taken up for implementation during Xth Plan period with a capacity of 72.25 million tonnes (MT) per year and an investment of Rs.7,094.59 crore. These projects are envisaged to contribute about 52.76 MT of coal during 2006-07.
Out of these projects, 9 projects have already been sanctioned for capital investment of Rs.2,670.59 crore with a capacity of 44.25 MT per year. These 9 projects are planned to contribute about 43.35 MT during the year 2006-07.
S&P predicts that US Steel industry woes near end
Decreased US demand for steel and higher imports will lower overall spot steel prices in 2005 compared to 2004, Standard & Poor's predicted.
S&P also forecasted that steel prices should stabilize in the next three to four months, said its predictions were based on an estimated U.S. gross domestic product this year of 3.5 percent.
Following a booming 2004, market conditions in the U.S. steel industry deteriorated in early 2005. Declines in shipments, consumption and production were due largely to accumulation of excess inventories in late 2004 at both distributors and original equipment manufacturers, as well as less robust economic growth and weakness in the automotive sector.
With domestic distributor inventory levels much lower and steel imports beginning to ease a bit along with producer discipline like we've never seen before and recovering demand from the Big Three automakers, spot steel prices should at least stabilize through the rest of the year, said Leo Larkin, diversified metals & mining analyst with S&P's Equity Research Services.
Chinas steel industry ready for change
Unprecedented consolidations within China's fragmented steel sector, the biggest in the world, are in the pipeline following China's new steel industry policy launched last month. These consolidations will be led by the nation's top steel makers - Shanghai Baoshan Iron and Steel Corp (Baosteel), Anshan Iron and Steel Corp, Wuhan Iron and Steel Corp and Shougang Group, according to Luo Bingsheng, vice-chairman of China Iron and Steel Association.
The Anshan steel firm and Benxi Iron and Steel Corp, both located in Northeast China's Liaoning Province, will soon be combined into a larger single entity, Luo said. "The two steel producers have joined forces in sourcing and sales as the first step towards an equity merger," he said.
Baosteel, China's No 1 steel maker, is considering building a steel plant in Zhanjiang, a port city in southern Guangdong Province, in a joint project with Guangzhou Iron and Steel Corp and Shaoguan Iron and Steel Corp - two local steel companies in Guangdong, according to Luo.
Wuhan Iron and Steel in Central China's Hubei Province is considering collaborating with Liuzhou Iron and Steel Corp in Guangxi Zhuang Autonomous Region to build a plant in Fangchenggang, a port city in Guangxi, he said.
Shougang in Beijing is constructing a steel plant in Caofeidian, a port on the shore of Bohan Bay, with Tangshan Iron and Steel Corp in northern Hebei Province.
Currently, there are some 830 steel makers in China with the majority too small to achieve international competitiveness. Baosteel is China's only steel maker capable of producing over 20 million tons a year, and it only ranks No 6 in the world. China's steel policy aims to cut the number of steel makers in China and enable big players to control more production through M&As. It expects that China's top 10 steel makers will control more than 50 per cent of the nation's total steel output by 2010 and over 70 per cent by 2020. By 2010 there will be two Chinese steel giants with an annual output of more than 30 million tons, and several others with an annual output of over 10 million tons, according to the policy.
Anglo profits surge on strong coal, metal prices
South African mining giant Anglo American posted on Thursday record earnings for the first half of the year, driven by strong coal and base metals prices.
Headline earnings, the group's favoured measure of calculating net profit, rocketed by 42,9% to $1,784-billion compared with the same period a year earlier. Operating profits meanwhile rose by 28% to $2,98-billion.
Anglo attributed the record performance to strong prices for platinum, gold, diamonds, coal, and base and ferrous metals, owing to robust growth in China and the United States, coupled with limited growth in capacity.
The period saw strong contributions from the base and ferrous metals divisions, as well as coal and platinum. But the contribution from the diamonds activities was lower than last year, and results from paper and packaging also fell in a tough market.
The group also said its efficiency drive generated cost savings of $303-million in the first half, 22% higher than last year and ahead of the company's target.
Shanxi province accounts for 48 pct of global coke trade
North China's Shanxi Province, a leading coal production base, now exports 48 percent of the coke traded in the international market, said Vice Governor Song Beishan of Shanxi Province here Wednesday.
Shanxi holds 30 percent of the nation's proved reserves and output of coal, handling over 70 percent of the total inter-provincial coal shipments.
Due to the price hike of energy and raw materials in the international market, Shanxi, blessed with rich mineral resources including coal, iron, aluminum and magnesium, has become more attractive to foreign business people, he said.
In the first half of this year, the contracted volume of foreign direct investment in Shanxi reached 420 million US dollars, with 120 million US dollars actually used.
Tenaris Announces 2005 Second Quarter Results
Tenaris, the largest company in steel pipes has announced net income of $ 341.6 million in Q2 which is a 165% increase over Q1-2004. The net sales reported are $1744.3 millions an increase of 75% over Q1-2004. EBITDA for Q2 is reported at $542.4 million, 169% increase over Q1-2004
Sales volume of seamless pipes increased by 9% to 747,000 tons in the second quarter of 2005 from 683,000 tons in the same period of 2004. This includes 28,000 tons produced by Silcotub. Sales volumes showed notable increases in North America, Mexico, Venezuela and Argentina. Sales in Europe declined reflecting industrial weakness in Italy and lower sales to process and power plant customers and North Sea pipeline projects.
Sales volumes of welded pipes increased by 86% to 158,000 tons in the second quarter of 2005 from 85,000 tons in the same period of 2004. The increase in sales was due to a strong recovery in demand for welded pipes for gas pipeline projects in Brazil and Argentina.
These second quarter results reflect the strong positioning established by Tenaris as the leading supplier of seamless pipe products to the global energy industry and the current positive fundamentals for investment in oil and gas exploration and production. Strong demand for pipes, particularly the high-end pipes in which Tenaris increasingly specialize, helped them average selling price for seamless pipe products to record a further increase over the level recorded in the first quarter of 2005.
Global demand for seamless pipes continues to increase led by higher drilling activity in the oil and gas industry. Tenaris expects overall market conditions to remain favorable for the rest of the year.
Brazilian Gerdau to boost domestic output to 11.7MT by 2007
Brazilian long steelmaker Gerdau plans to increase crude steelmaking capacity in Brazil to 11.7MTPY by 2007 from today's 7.5MTPY, according to company investor relations director Osvaldo Schirmer. The expansion plans will also increase the company's flat steelmaking capacity in Brazil to 6.6MTPY from the current 4.7MTPY
Gerdau, the largest long steel producer in the Americas, plans investments of US$3.2bn from 2005-2007.
The projects include the expansion of the company's Acominas steelworks in Ouro Branco. In addition the company's new mill in Aracariguama will have installed capacity of 900,000 TPY and will manufacture 600,000 TPY of flat steel products. The company also has budgeted US$200mn for the Cosigua plant expansion project which would increase crude steel output to 1.8MTPY from 1.2MTPY and boost flat steel production to 1.6MTPY from 1.3MTPY. Also part of the planned investments is a new specialty steel plant to serve the automotive industry which is expected to produce 800,000T of steel and 500,000T of hot rolled coils annually.
Erdemir sale an uneasy passage for Turkish economy
A fierce-looking banner strung between two swaying trees in this hillside town on the Black Sea sums up how the locals here feel about the steel factory that is their principal employer: "Erdemir is our sweat," it proclaims. "Each of us would die for it."
Turkey recently put this state-controlled company, its biggest steel maker, on the auction block. With 13 suitors lining up to bid, including companies from Russia, Britain and South Korea, Erdemir could become one of Turkey's most successful privatizations - a potent symbol of economic progress as Turkey begins arduous negotiations this autumn to join the European Union.
The auction process has run into an unexpected surge of opposition from political leaders and business executives who argue that privatizing the company is not necessary, given its profit. Moreover, they add, Turkey cannot afford to surrender a strategic asset, especially when Europeans seem increasingly reluctant to admit the Turks into their club of nations.
Protests have erupted here and in other cities, as Erdemir has become a fraught symbol of Turkey's uneasy passage from its sheltered past into a free-market future.
Erdemir, which was founded in 1960 and began production in 1965, has had its share of bad years. It lost a total of $169 million in 2001 and 2002, which were difficult years for the industry, before rebounding with a profit of $261 million in 2003 and $473 million last year.
The company currently supplies about a third of Turkey's demand for flat steel, which is used to make ships, cars, machinery and household appliances. If a foreign buyer takes over Erdemir, people here say it would export the high-quality steel to Western Europe, forcing Turkish companies to switch to lower-quality steel imported from Ukraine or Kazakhstan.
Twenty-three Turkish manufacturers that buy steel from Erdemir have banded together to submit their own bid. But they face well-financed rivals, like Mittal Steel of London and Arcelor, based in Luxembourg, which are the world's two largest steel makers. Owning a steel plant in Turkey is attractive, analysts say, because the country has become a hub for auto manufacturing: Ford, Toyota, Renault and Fiat all assemble cars here.
Although the Turkish state owns only 46 percent of Erdemir's shares, it controls the board and appoints senior management. Even those managers sounded dubious when asked why Turkey needs to sell it. On Monday, Erdemir announced that Dervisoglu had stepped down as chief executive because of poor health. Analysts in Istanbul said his exit more likely reflects his feelings about the sale.
Perus Mepsa Q2 profit grows 177% to US$185k
Peruvian steel products maker Metalrgica Peruana (Mepsa) posted a net profit of 601,000 soles (US$185,000) second quarter 2005, up 177% on same quarter 2004
Revenue from operations brought in 25.3mn soles in Q2, 51.6% higher year-on-year
In the first half of 2005 Mepsa posted a net profit of 1.63mn soles compared to a deficit of 88,000 soles in same-period last year on revenue of 51.2mn against 30.5mn soles in the same period 2004.
The majority (52%) of second quarter sales were exports, an increase of 22% in same period last year. Increased exports came from new contracts with Chile's state copper company Codelco and the Collahuasi copper mine, controlled by Falconbridge and Anglo American.
Mepsa said it expects to maintain sales in the second half of 2005 to end the year with 100mn soles in sales and a net profit bordering 4mn soles.
Ethiopian KOSPI Wins 67 Million Birr Contract
Kombolcha Steel Products Industry PLC (KOSPI), a MIDROC Group Companies, has won a new contract to manufacture and deliver its products worth 67 million birr.
The contract agreement has been reached between KOSPI and the Ethiopian Electric Power Corporation, the first purchasing contract of its kind that ever entered into EEPCo with a local steel producing firm.According to this agreement, KOSPI will produce 30,000 steel electric poles with accessories, to be completed in a years time.
KOSPI, a private limited company owned by Sheikh Mohammed Hussein Ali Alamoudi, owner and Chairman of MIDROC Ethiopia, opened its first factory in Kombolcha, about 380 km from Addis Ababa in July 1999 , with an initial investment capital of 75 million birr.
The main objective of the company is to manufacture and sell different types of metal and engineering products, that are mainly applicable for construction.The company started producing three major initial products namely, corrugated sheets, special ribbed sheets and plain sheets for roofing, wall cladding and related construction activities .
Stelco Inc.'s second-quarter profit dips to $40 million
Steelmaker Stelco Inc. said Thursday its second-quarter profit slipped $2 million compared with last year to $40 million, even as one-time items boosted the bottom line.
The Hamilton-based company, still operating under bankruptcy-court protection, further warned that profits for the quarter ending in September will be "significantly lower" than the numbers released Thursday.
The company is facing uncertainty on the labour front, with one of its key union locals threatening to go on strike and Stelco management saying the union isn't in a legal position to strike.
TRFI eyeing Bellary to house 2nd basic steel plant
The Torsteel Research Foundation in India (TRFI), the flagship organisation of the TOR Group of companies, is in the process of setting up a 250,000 tonne capacity basic steel unit at Bellary in Karnataka.
TRFI was created in 1973 to promote quality high-strength reinforcing steel production as well as its rapid and scientific utilisation. TRFI took upon the task of ensuring that all TOR branded high-strength reinforcing steel was produced from tested quality billets, which were reheated in well-controlled furnaces and rolled in well-designed and controlled mills.
Since the quality of steel available was poor, it had increasingly become difficult over the years to ensure quality steel. Torsteel Ltd thus came into existence. Torsteel would make available micro-alloyed high quality steel bar to the small consumer directly from the Torshops. Small quantities of alloys like Titanium, Vanadium, Niobium and other elements were used either singly or in combination to promote grain refinement and increase strength, toughness and ductility of the steel.
Torsteel would own steel billets or have its stockyard only with approved steel billets and 11 of its mills in south India would account for an annual production of three lakh tonnes of Torsteel.
Alvarado to Head U. S. Steel Automotive
United States Steel Corporation has advanced Peter J. Alvarado to the position of general manager-automotive and vice president U. S. Steel International with responsibility for the company's technologically advanced Automotive Center in Troy, Mich and will report to J. James Kutka, vice president-commercial
In his new assignment, Alvarado will oversee the sale of steel to automotive manufacturers and the development of new steels that meet the demanding requirements of the next generation of automobiles.
Alvarado succeeds Sharon K. Kelley, who has been named plant manager of U. S. Steel's Midwest Plant, a finishing operation in Portage, Ind. The appointment was effective August 1.
Strong Coal Prices Lift Q2 Earnings For Alpha Natural Resources
Alpha Natural Resources, Inc. a leading Appalachian coal producer, today reported net income of $26.4 million for the quarter ended June 30, 2005.
Alpha per-ton price realization in second quarter up 23 percent from last year as the Coal margin climbs to $10.55 per ton, 16 percent higher than second quarter of 2004.
The $364.1 million revenues reported in Q2 are up by 24% over Q2-2004.
The company has reported Uncommitted tonnage as of July 25 totals 31% for 2006, 60% for 2007 and predicts that Metallurgical exports remain strong through first half of year.
