October, 04 2005
SAIL's mega plans to stay ahead of competition
Steel Authority of India Limited SAIL has announced that with increased investment of Rs. 35,000 crore in the next seven years, it would continue to be the market leader in India. SAIL has decided to invest Rs. 10,000 crore for various value added products and revamp of the Indian Iron and Steel Company IISCO in addition to already announced expansion plans involving an investment of Rs. 25,000 crore by the year 2012
SAIL Chairman Mr VS Jain said: "If we are not making any announcement, it does not mean we do not have plans and the wherewithal... we will continue to maintain our leadership position. We have precise plans with time-bound targets and attainable goals.''
Listing the distinct advantages that SAIL had over the competition by way of infrastructure, human capital, technical resources and marketing network, Mr. Jain said: "We can augment our capacity at half the price of what our competitors would have to invest" and gave the example of the Bokaro steel plant.
Mr Jain said that Bokaro Steel Plant was built with the provision of expanding its capacity to ten million tonnes, which could be stretched to 15 million tonnes using in knowledge base. "We can expand our capacity to 35-40 million tonnes easily by merely by de bottlenecking the existing plants. No private sector company is in a position to match our infrastructure," he said.
Jain said with a manpower strength of 1,20,000 and high-end technical expertise in the field and a cash reserve of Rs 6,000 crore besides being a virtually a debt-free entity, Sail in an enviable position to finance its expansion and other projects.
Skeptical about the recent declarations on mega project investments, Mr Jain said If we go by the announcements there would be production of about 100 million tonne of steel in the country. Where are the resources for this scale? Let's see how many of these projects actually fructify''. He sought imposition of a penalty clause on those who failed to fulfill their commitments, especially when these companies had been allotted iron ore reserves. He added that "We should not just give away ore reserves without any progress in the direction of steel making. Award of ore reserves should be linked with these promises turning into reality."
Tata Steel plans a billet plant in Iran
Tata Steel plans to build a 1.5 million c ton plant in Iran to supply billets to NatSteel Asia Pte, its Singapore based subsidiary, to replace scrap with billets as the main steel making raw material.
The Iran venture includes slab and billet making mills each with capacities of 1.5 million tons a year, with production due in stages starting 2008 as per a report
SAIL looks towards Russia for coal
It is reported in press that SAIL is in talks with SK Prom about the purchase of Gornyak Co licensed to produce coking coal from Podberezovskoe coal field in Alapaev District in Sverdlov Region
Mr Pavel Chernavin, GD of SK Prom said that the coal asset was first offered to Russian metal companies but SAIL has shown greater interest
SAIL denies commenting officially, but the source close to the deal said the Indians have been lured in, first, because SAIL has no coking coal deposit of its own and imports the coal from Australia, second, only the coking coal of Yakutias Denisovskoe deposit and of some deposits in Canada can match the grade of Podberezovskoe coal.
On the other hand, even SK-Prom estimates the proven reserves of the deposit at of no more than 10 million tons with the coking coal accounting for only one third of the overall coal. Buying such small deposit, investing in mine construction, suffering high transport costs may, in the end, turn out profitless to SAIL, one of the coal traders said. Some analysts are sure the deal will be profitable to the sellers exclusively, as they count on the Indian company to dispose of the non-core asset.
The deal budget is estimated at from $5 million to $10 million. SK-Prom doesnt need the deposit, Mr Chernavin said, as it was acquired to be resold after the geologic exploration.
Not all analysts are so skeptical. Some of them signal SAIL is buying the deposit, eyeing the nearby Aramashev area with the forecasted reserves of nearly 200 million tons of coal. Once the coking coal is spotted there, SAIL will get the deposit with reserves comparable to Denisovskoe, which value is estimated at nearly $200 million now. If the exploration results come to expectations, SAIL wont only have enough coking coal for itself, but will be able to export it to Japan and to the Asian and Pacific countries.
POSCO India files for prospecting license
POSCOs Indian subsidiary POSCO India Pvt Ltd has filed an application for a prospecting licence PL with the Orissa government. According to reports, POSCO India has put in its application for a PL in end September and expects a decision by year end.
A PL would basically allow the company to carry out some detailed exploration work such as drilling. Determining the iron ore quality, the behavior of the ore body and the level at which ore is available are all revealed during prospecting.
Industry sources said most of Orissa had already been explored for mineral resources especially iron ore in great detail by the government. The government has already done the reconnaissance, Posco sources confirmed, while claiming ignorance about the exact mining area earmarked.
With the Centres nod required for the PL, government circles expect another round of debate to be sparked off about the plusses and minuses of the $12bn FDI project in Orissa.
BSL achieves record production
SAIL's Bokaro Steel Plant BSL has made a record in production of hot metal, crude and saleable steel during the first half of the current fiscal by producing 2,333,389 tonnes of hot metal, 2,078,412 tonnes crude steel and 1,812,662 tonnes of saleable steel
A plant spokesman said the steel plant also met all the demands for special steel. The DMR-249 steel of the plant was found satisfactory after inspection conducted by the Indian Navy. Its cold rolling mill rolled 1000 mm wide electrical steel for the first time ever. The plant also made a record production of API grade special steel by 72 per cent in the first half of the year, he said.
Canadian MIC to invest in roll forming plant in Aurangabad
Minaean International Corporation MIC, a Canadian company engaged in the development and promotion of innovative quick build light gauge steel technologies for the construction sector, has announced plans to invest approximately Rs 21 crores in setting up a new roll forming plant in Aurangabad. The new plant in Aurangabad will have a capacity of 50,000 tonnes per annum and is expected to be completed soon," said Mr Mervyn Pinto, president and CEO of MIC.
"We have invested approximately Rs 8.7 crores in a roll-forming plant in Ranchi. This plant is almost complete and ready to deliver 30,000 tonnes of steel components per annum. Since we have tied up with Tata Steel in Jamshedpur, this plant will be ideal in helping us provide quick build construction technology.
Our primary markets are petrol stations, strip malls and low rise residential apartments," said Mr Terry Rule, CEO of MIC India.
Police raid fraud bar unit on SRMB complaint
West Bengal Police have raided a rolling mill manufacturing fake "X" ribs steel bars on Saturday and seized duplicate X-ribbed bars.
The unit, called Tribeni Industries Pvt. Ltd., is located at Dankuni, west of Kolkata. It was illegally manufacturing X-ribbed steel bars, the intellectual property right (IPR) of which is vested in SRMB Udyog Ltd.
SRMB Udyog, as manufacturer of X-ribbed TMT bars in India, had sought police intervention to protect its IPR is respect of X-ribbed TMT bars. SRMB would take further recourse of law to book all manufacturers and traders involved in illegal manufacturing and trading of X-ribbed TMT bars, the company said in a release.
Congress power center asks Posco: in whose benefit?
The controversy ridden POSCO steel plant project, already under fire from Opposition parties and several organizations, faced another hurdle with the Sonia Gandhi-led National Advisory Council NAC raking up virtually the same questions.
Orissa chief secretary Mr Subas Pani has received a letter from the Union ministry of Steel enclosing a note on questions raised by the NAC and seeking the Orissa governments response to the same.
Posco: in whose benefit ?, the note posed before the government. The state government appears to be overwhelmed by the quantum of foreign investment promised and has not placed certain facts properly before the government of India which has blessed this project, the note said.
It is not the quantum of investment that matters, it is the interest of the state and the country which comes first, it said.
Jai Balaji Sponge to invest Rs 2500 crore
Steel maker, Jai Balaji Sponge, is planning to invest Rs 2,500 crore to expand capacity. In a communication to the stock exchanges, the company has informed that it has decided to increase existing steel making facility to two million tonne, enhance its power generation capacity and take up iron ore and coal mining activities.
The company planned to implement its expansion program in a phased manner over a period of three to five years. Total investment was likely to be around Rs 2,500 crore. The group's vision was to take its total turnover to Rs 4,000 crore from the current level of Rs 650 crore.
Group company Ramrupai Balaji Steels is also setting up an integrated steel plant at Durgapur at total cost of around Rs 1,200 crore to be spent over five years. The first phase of the project had been completed and the company had commissioned facilities to manufacture sponge iron and pig iron and also its rolling mill.
Adhunik Metaliks to set up an integrated steel plant
Adhunik Metaliks Limited has announced that announced that it is also setting up an integrated steel plant with 260,000 MT per annum steel billet manufacturing capacity in Phase-I with a project outlay of Rs2.5bn consisting of 5x100 TPD DRI plant, 262 cum blast furnace, electric arc furnace, ladle refining furnace, continuous casting facility, 0.70 MTPA coal washery and 30mw captive power plant.
The Company said that, it has planned its expansion plans in three phases and the total investment in all three phases would be over Rs20bn.
It is now launching second phase Unit II a Rs4.5bn expansion plan for steel making with one 262 cum capacity mini blast furnace along with the auxiliary and balancing facilities, the Company said
The Company said that, the further expansion activity has been christened as Unit III and apart from increasing the steel production capacity, the company has decided to produce high value added products.
IISI predicts 4-5% growth in steel demand
China's needs will cause world demand for steel to rise by 4% to 5% by next year as per International Iron and Steel Institute IISI. The group says that is despite the efforts of the Chinese government to try to cool the country's high levels of consumption. China consumes nearly one third of the world's steel output and the IISI said demand there will grow by about 10% each year.
However the Institute also warns that there are still uncertainties about continued global demand which could well be affected by high oil prices.
IISI Secretary Mr General Ian Christmas expressed concern about risks to their business from high raw material prices for which he blamed the mining giants companies, pointing out iron ore prices were up 256% since the start of January 1999, while steel prices had risen only 156% in the same period
Arcelor lays out big spending plans to reach 80-100 mln tonnes
Arcelor, the world's second-biggest steelmaker, is prepared to spend at least $3.5 billion in the next two years buying steel companies. CEO Mr Guy Dolle said that he was keen to see the company's annual steel output of just more than 50 million metric tons last year grow to anywhere from 80 million metric tons to 100 million metric tons in the next decade, primarily through acquisitions, although building new plants could also be an option
We are looking at possibilities including in Eastern Europe, China, north America, Mexico and India, said Mr Guy Dolle. He said he was able to put a reasonably concise figure on the potential for spending on deals in the next couple of years because spending even $4 billion would be unlikely to push Arcelor's gearing, the proportion of debt to equity, above a target figure of 30 percent to 50 percent.
China looking to shift to higher quality steel products
As China hopes to begin producing value added products in the coming years, it may further turn up the heat on the global steel makers.
Mr Yang Zunqing, a senior executive at China Iron & Steel Association during IISI conference said "We expect China to begin making more refined steel products in the near future,"
He told that although he was uncertain of how high China could rise in the global steel industry ladder, value added products would most likely mark out the next step for the communist country.
Addressing fears about China's ballooning supply, the Chinese executive tried to downplay them, saying that the government is strongly committed to forming "friendly and healthy" relations with other countries to resolve the issue. He also viewed the government-led reforms for its steel market to be a due process. "The new policy is about changing the steel industry to become more environmentally friendly and more energy-conservative," said Mr Yang.
Isfahan steel mill complex exports to cross 100 million dollars
MD of Isfahan Steel Mill Complex has announced that steel products worth more than 100 million dollars would be exported by the end of current Iranian year as per a report from companies PR department as against export of 77 million dollars last year
Mr Massoud Ebka said that steel exports has been on the rise in recent years and that one factor in attaining higher steel exports is structural reform of the company in the past eight years. Iran has a meager one percent share in the world steel production, making it inevitable to push up the exports, he added. Iran produces only eight million tons of the steel per year and has to import five to six million tons annually.
So far the complex has produced 19.6 million tons of finished steel and would touch 4.7 million tons per year in next four years.
Deputy Head for Marketing and Sales Mr Mehdi Taj said that given the drop in world steel prices, EU's provisions on restricting imports and also to inject vibrancy in its production processes, the units has decided to lower prices as announced in last month
Nucor CEO says China holds key to world steel prices
Global steel prices will depend largely on China's success in tackling overcapacity that threatens to flood markets in other parts of the world, CEO of Nucor Corp Mr Daniel DiMicco said. He urged China to curb excessive growth and said steel makers worldwide should focus on improving efficiency rather than adding capacity. "The current steel price is reasonable and stable but there are uncertainties about China," added Mr DiMicco
"Over-investment is a problem in the sector. The world steel industry should be careful about investment," said Mr DiMicco. Mr DiMicco added that "We're negative about adding capacity. We're more focusing on efficiency by developing new technologies."
Mr DiMicco also expressed concern about the high price of raw materials. "Scrap prices are extremely high and it is a tremendous concern in the industry," he said. "This could squeeze the profit margins of U.S. steel companies, which still have excess capacity even though they're working off excess inventories successfully."
Charlotte, North Carolina-based Nucor, the world's tenth-largest steel producer, makes steel from scrap metal. The company said in July the average scrap and scrap substitute cost per ton used increased 8 percent to $246 in the second quarter from a year ago.
Nucor posted net income of $322.7 million in the second quarter compared with $251.4 million in the same period a year earlier
Korean shipbuilders to increase Chinese steel imports
Korean shipbuilding companies including the three largest domestic players Hyundai Heavy Industries Co., Samsung Heavy Industries Co and Daewoo Shipbuilding & Marine Engineering Coare are planning to increase steel imports from China to tackle a worsening shortage of steel sheets. Korean shipbuilders have until now depended on local steel and imports from Japan.
Korean shipbuilding companies are expected to need a total of five million tons of steel sheets, two million of which will come from leading local steel producer POSCO. Another 1.2 million tons will come from Dongkuk Steel Mill Co.
Hyundai Heavy Industries is planning to increase Chinese imports next year to supply 15 percent of its total needs, up from between 7 to 8 percent this year. "We have an absolute lack of steel because supply from Korean and Japanese industries is limited while shipbuilding orders are on the rise. We will actively seek more imports from China," said an official of Hyundai Heavy. Moreover, Hyundai Heavy is reportedly considering a way to invest in Chinese steel companies to secure a stable supply of steel.
Samsung Heavy will also expand its Chinese steel imports as it projects its demand for steel sheets to increase to 1.1 million tons next year from 1 million this year. "In the past, Chinese steel materials were branded as low quality products, so local shipbuilders were reluctant to import them. But recently, the quality of products from major Chinese steel companies are evaluated as not so far behind Korean or Japanese," an industry source said.
34 killed in Henan coal pit explosion in China
Thirty four miners were killed in a gas explosion in the early hours of yesterday at a State-owned coal mine in Hebi, a city in Central China's Henan Province. The accident occurred at 4:45 am when 53 miners were working underground at the No 38 pit of Mine 2 of the Hebi Coal Industry (Group) Corporation Ltd
The 34 miners were found dead after the gas was ignited, while another 19 scrambled to safety.
The cause of the accident remains under investigation.
As the largest State-owned coal mine in Hebi, the company consists of eight production mines and generates an output of more than 7 million tons a year.
Arcelor Brazil operational but Acesita not included
Arcelor said its Brazilian arm Arcelor Brazil is now operational, following agreement from its Brazilian shareholders, but that the Acesita affiliate will not be included in the new division.
Arcelor Brasil, whose formation was announced in July, will have annual capacity of 11 mln tonnes of steel and groups local affiliates Belgo Mineira, Companha Siderurgica de Tubarao CST and Vega do Sul.
Acesita, in which Arcelor holds 28 pct, will however not be included after failure to reach an agreement with the other shareholders, Fundacao Petrobras de Seguridade Social (Petros) and Caixa de Previdencia dos Funcionarios do Banco do Brasil (Previ). Arcelor still hopes to reach an agreement and include Acesita at a later date.
Nippon Steel sees inventory depletion by year end
Japan's big steel makers should draw down bloated stocks by the year end as car, ship and industrial machinery makers drive demand for their high quality steel, Mr Akio Mimura, president of Japan's biggest steel maker Nippon Steel Corp said. He also expressed his concern about uncertainty over raw material prices and the level of stocks held in China.
"Demand from automobile, shipbuilding and industrial machinery makers is extremely strong, so I'm not worried about the state of the domestic economy," said Mr Mimura. "It will be good if inventory adjustment would be completed by the end of the year," added Mr Mimura
Japan's top four steel makers, including Nippon Steel, have benefited from booming demand for high-quality sheet steel, which is mainly supplied to the auto sector and accounts for up to 85 percent of their business. Higher steel prices earlier this year prompted them to raise production, which has increased inventories across Asia. To maintain price stability, global steel makers including Nippon Steel, are now scaling back their production. Analysts say Japan's steel makers may see profits dip next year if a possible supply glut in China pushes prices lower, but their focus on high-grade steel will likely shelter them from deeper damage.
Mr Mimura said Nippon Steel would keep to its plan to cut steel output by 1 million tonnes in the year to end-March 2006.
Nippon Steel, the world's third argest steel maker, produced 30.432 million tonnes of crude steel last year, of Japan's total output of 112 million tonnes.
Mimura declined to comment on the outlook for iron ore and coal prices, though he separately told a news conference he hoped raw materials producers would cooperate with steel makers as both rely on each other to survive.
Mississippi to get new steel plant SeverCorr
Russian steelmaker Severstal and some US investors including GE Capital plan to build an $880 million steel mill in Mississippi to be known as SeverCorr. The facility will produce 1.5 million tons of high quality auto grade steel per year, much of which will be bought by foreign carmakers in the area.
Russian steelmaker OAO Severstal Group is investing about $200 million in the project
The venture will be headed by Mr John Correnti, former CEO of Nucor Corp
IISI elects new office bearers
The Board of Directors of the International Iron and Steel Institute IISI has elected Mr Guy Doll CEO of Arcelor as Chairman, Mr Ku-Taek Lee, Chairman & CEO of POSCO, Mr Akio Mimura, Representative Director & President, Nippon Steel Corporation and Mr John Surma, President and CEO, United States Steel Corporation as Vice Chairmans for one year, until October 2006.
The Board of Directors met on the first day of IISIs 39th Annual Conference in Seoul, Korea. On behalf of the Board of Directors, the Secretary General of IISI, Mr Ian Christmas thanked Mr Akio Mimura, IISI Chairman for 2004/2005, for his support and direction over the past year. Mr Christmas welcomed Mr Guy Dollas the new Chairman and Mr Lee, Mr Mimura, and Mr Surma as Vice Chairman.
The Board of Directors also elected the 2005/2006 Executive Committee consisting of Mr Hajime Bada, President and CEO of JFE Steel, Mr Guy Doll CEO of Arcelor, Dr Jorge Gerdau Johannpeter, President of Gerdau SA, Dr. Ing. Jrgen R. Grossmann, CEO of Georgsmarienhtte Holding GmbH, Mr Ku-Taek Lee, Chairman & CEO of POSCO, Professor Dr Ulrich Middelmann, Chairman of the Executive Board of ThyssenKrupp Steel AG, Mr Akio Mimura, Representative Director and President of Nippon Steel Corporation, Mr LN Mittal, Chairman & CEO of Mittal Steel, Mr Alexei Mordashov, Chairman of Severstal, Mr B Muthuraman, MD of TATA Steel, Dr Paolo Rocca, President of Techint Group, Mr John P. Surma, President and CEO of United States Steel Corporation and Mr Ian Christmas, Secretary General of IISI
Severstal forecasts higher 2005 sales
Severstal forecasts 2005 revenues of $4.7 billion to $4.8 billion, compared with $4.6 billion last year, a company spokeswoman has announced. She quoted GD Mr Anatoly Kruchinin as saying that Severstal expected earnings before interest, tax, depreciation and amortization, or EBITDA, to be up to $1.75 billion this year.
The numbers were to Russian Accounting Standards, which can differ from International Financial Reporting Standards, or IFRS, that Severstal also uses.
According to IFRS, Severstals 2004 EBITDA was $2.4 billion, with a margin of 37 percent. The company did not provide comparative 2004 figures to Russian Accounting Standards.
The spokeswoman also quoted Mr Kruchinin as saying that the company planned to spend about 24 billion rubles ($842 million) next year on various investment projects linked to development of its key production unit in north western Russia. Last years investment was also around that level.
AK Steel builds recycling plant
AK Steel has built a recycling facility at its Ashland Works to process and recycle waste materials from the plant's blast furnace, coke making operation and continuous caster. The new facility is capable of recycling up to 250,000 tons of waste per year and recovering iron and carbon units that would otherwise be sent to a landfill. The new recycling facility started operations Sept. 26.
Waste materials processed in the recycling facility will be converted to cold-bonded briquettes, which will be used as feedstock at the plants blast furnace. The company expects the use of the briquettes to reduce the amount of purchased raw materials needed at the operations.
"Installation of this recycling facility at Ashland Works is another step in AK Steel's long term raw materials strategy," said Mr James L Wainscott president and CEO of AK Steel. "The new facility will provide AK Steel with an economical way to recycle valuable raw materials which will reduce operating costs and result in a significant benefit to the environment."
National Recovery Systems, East Chicago, Indiana, which also owns and operates it, constructed the waste recycling facility. AK Steel has awarded a multi year contract to NRS, which owns and operates four similar waste recycling facilities in the United States and licenses its technology in the United Kingdom.
Danger looms for SS as China ramps up production
According to MEPS, remarkable growth forecasts for China's stainless steel sector were made at a recent industry meeting in Shanghai. Chinese production capacity in 2006 will be double the figure in 2004. Moreover, if current expansion plans are fully realized, China could be melting more than 16 million tonnes per year in 2010 which is equivalent to more than 60 percent of current world output.
China is already having a determining influence on global stainless markets. In the first half of this year, its stainless crude steel production jumped by 54% YOY basis, while output in almost every other country was falling, according to figures from International Stainless Steel Forum.
The surging expansion of domestic production is making China less of an import market, and more of an exporter in its own right. The oversupply that has characterized the global stainless steel sector this year may become persistent.
Mills supplying the Asian market are already suffering. Leading producers - including Posco, Nisshin Steel and NSSC have cut back their operating rates in order to reduce the oversupply that has undermined prices. European mills have switched more of their exports to Russia, whose own stainless production has suffered as a consequence falling 40 percent in January August 2005.
One large nickel supplier expects Chinese stainless consumption to grow by 9 percent per year for the next decade. Even if this rapid growth rate is realized, it will still leave China with an exportable surplus of stainless steel from its newly expanded plants. Few people believed China would install so many new stainless production units. Indeed, even some in the Chinese industry accept that the country is building up excess capacity that could overhang the market for years to come. Several other producers are already too advanced in construction work to cancel their expansions; but they may have to delay start up or mothball some installations if they are to protect their profitability.
ThyssenKrupp steel unit forecasts 2005 results
ThyssenKrupp AG said that its full year pretax profit at its Steel unit will be considerably above the 1.0 billion euro level, up from 911 million euro reported a year earlier, but said that exact earnings figures are not yet available. It also said preliminary full year sales at the unit exceeded 14 billion euro, up from 13.7 billion euro reported last year. New orders during 2005 also exceeded the 14 billion euro level.
ThyssenKrupp's 2005 fiscal year ended on Sept 30. It will release its final full year figures on Dec 1.
Starting in the current 2006 fiscal year, ThyssenKrupp has split its Steel unit into the Steel and Stainless units and the two units will report earnings separately.
ThyssenKrupp did not provide revised year earlier figures in its statement but said that full year sales and earnings rose despite weak demand, particularly in its core European market which was in a weak state
German steel production will be down from 2004 at around 45 mln tonnes. After operating close to capacity in the first few months of the year, the German steel mills cut back production for the first time in May and then increasingly in the summer months.'
Taiwan rebar prices expected to rise
The Taiwan rebar price is expected to rise further after it increased by NT$200/ton last week.
The price increase is due to the expected 30 percent increase in demand for scrap after October 1. With the increasing price of scrap, rebar prices are expected to follow
Stelco plans new talks on refinancing plan
Stelco Inc, an insolvent Canadian steelmaker, plans to start new talks with bondholders who oppose the company's refinancing plan, before a vote scheduled for Nov. 15, CEO Mr Courtney Pratt said.
Hamilton, Ontario-based Stelco, its unions and the provincial government have agreed on a refinancing proposal from Brascan Corp.'s Tricap Management Ltd. that would provide the company with C$450 million and a provincial loan of C$100 million to help the company exit from bankruptcy protection. The Ontario loan would be used toward a C$400 million payment into the company's pension plan to reduce a C$1.3 billion shortfall.
Bondholders, including the New York-based Wexford Credit Opportunities Fund, who represent more than 50 percent of Stelco's creditors, said they'll vote against the plan because the proposed pension payment is excessive and the C$100 million loan is not needed. They also object because they say Stelco didn't seek other competitive proposals.
This proposed plan is doomed,'' Richard Orzy, a lawyer representing the bondholders, told an Ontario judge overseeing the bankruptcy at a hearing today. They view the creditors as the path of least resistance. They need your help to beat up the creditors.'' He said the creditors have been shut out of all negotiations so far on the refinancing plan.
Stelco filed for protection from creditors in January 2004 because of losses from labor, energy and pension costs. Higher steel prices helped return Stelco to profitability last year. The company had net income of C$40 million in the second quarter as customers renewed contracts at higher prices.
Stelco asked Ontario Superior Court Judge Mr James Farley to authorize the company to take the plan to the creditors for a vote and to approve the costs associated with the plan, including C$10.8 million in break fees to Tricap. The bondholders urged the judge to reject Stelco's request because the plan has no chance of approval and only Tricap will benefit by collecting the break fees while the payouts will hurt existing creditors. Mr Farley reserved his decision until tomorrow.
St Petersburg sea port for sale
Russia will sell a 48.79 percent stake in Sea Port St. Petersburg, part of the countrys largest port complex on the Baltic Sea, for at least 802.5 million rubles ($28.2 million) in an auction on Nov. 10. Russia will accept applications to bid from Monday to Nov. 7, the Federal Property Fund has announced
The auction will offer the federal governments 20 percent stake and a 28.79 percent holding that is owned by the city of St. Petersburg.
The port, the biggest transport terminal in northwest Russia, increased shipping last year by 17 percent to 14.6 million tons of cargoes, the property fund said.
Work stoppage at stainless steel plant
Universal Stainless & Alloy Products Inc said workers at its Titusville plant have rejected a contract offer and walked off the job failing to reach collective bargaining agreement, despite "increased wages and other benefits as the contracts expired Sept. 30.
President and CEO Mr Mac McAninch said the company was "implementing our contingency plan in order to continue serving our customers, while working with the union to reach an acceptable agreement."
Universal Stainless, which is headquartered in Bridgeville, makes semi finished and finished specialty steels, including stainless steel, tool steel and other alloyed steels. The Titusville plant, which includes the company's precision rolled products department, accounts for about 6 percent of net sales
The work stoppage does not affect company facilities in Bridgeville and Dunkirk, N.Y., which are covered by separate CBAs.
Mechel to invest $350 million in Chelyabinsk and coal mines
Metals and mining company Mechel expects to invest a total of $350 million this year as the company seeks to revive its flagging steel business.
Mechels steel business is not very effective and the company is not fully up to speed in this part of its operations, CEO Mr Vladimir Iorich said during an investment conference in Moscow. Mechel expects to generate real returns from steel next year.
Mechel will invest a total of $200 million in the course of 2005 and 2006 in its Chelyabinsk Metal Factory, Iorich said. The company will invest $100 million to $120 million this year to improve coal production.
Elkhart Metals to install a large shredder
Elkhart Metals, a division of Sturgis Iron and Meta, is installing 500 foot long worlds largest shredder in Oakland Avenue, which would be able to shred scrap metal faster and into smaller pieces than any piece of equipment the company now owns. The new unit, dubbed the Mega Shredder, will allow Sturgis to expand its business, in particular into shredding junk cars.
After the chewing, magnets and air will separate the ferrous material from the nonferrous materials like copper, aluminum, stainless steel, plastic and foam
Construction began in July on the property of the former Elkhart Rubber Works, nestled behind the intersection of 14th Street and Wolf Avenue. The property, adjacent to Elkhart Metals, was attractive because of its proximity to the railroad, which the company uses to ship the processed materials.
A company official said that this capability will enable Sturgis to process more material at a lower price and thus keep the business competitive.
MMK profit to drop
Urals-based steelmaker Magnitogorsky Metallurgichesky Kombinat MMK expects profit to decline to $932 million this year, after posting a record profit of $1.2 billion in 2004 as prices for the metal peaked.
Sales for the year will probably reach $5.4 billion under International Financial Reporting Standards, said Mikhail Buryakov, head of integration policy at the company. Revenue rose 58 percent last year to $4.8 billion.
Mr Buryakov said that while demand in Russia is still strong the export prices have fallen considerably. MMK which currently sells about half its production on the domestic market would increase domestic sales
MBMI Resources enters strategic relationship with Chinese HGMG
MBMI Resources Inc MBMI has announced that it has reached an agreement with Zhejiang Huaguang Smelting Group Co Ltd to invest in its Bethlehem and Alpha nickel projects in the Philippines. Under the terms of the agreement, formal transaction documents are expected to be completed within 35 days. The Agreement is subject to approval of the boards of directors of MBMI and HGMG and any necessary regulatory approval.
HGMG will invest US$4 million for a 16% interest in the projects. HGMG has an option for 60 days after closing to increase its interest in the projects to 20% by investing an additional US$1 million. These funds will be used for the continued exploration and the development of the Company's projects on the Alpha and Bethlehem properties, which are located approximately 5 kilometers west of the town of Narra on Palawan Island in the Philippines.
Mr Michael Mason, President of MBMI said, "The investment by HGMG will allow for the development of the direct shipping ore projects on the Alpha and Bethlehem properties. MBMI is excited to have a large Chinese steel producer who will purchase some of the product from these mines as our partner. It is the intention of the partners to bring a small scale direct shipping ore mine into production as soon as possible. This mine will be expanded as soon as the mineral resource on these properties is fully delineated."
HGMG is a private Chinese steel producer which currently operates three blast furnaces in China and consumes 1.2 million tons of direct shipping nickel ore per year producing a ferro nickel product for use by stainless steel producers.
In addition to the Alpha and Bethlehem projects MBMI currently has two other nickel projects on Palawan Island in the Philipines and is in the process of acquiring four additional projects in Samar province in the Philippines. The Company's primary objective is to become a supplier of high grade nickel material to the primary nickel consumers in Asia.
Schnitzer Steel & Hugo Neu terminate joint ventures
Schnitzer Steel Industries Inc has completed its separation from Hugo Neu Corp., terminating their various joint ventures. Schnitzer Steels Pick N Pull Auto Dismantlers subsidiary also has acquired GreenLeaf Auto Recyclers LLC, adding 22 locations to its existing 30-store network. The deal is worth $22.5 million, which includes payment of about $1 million in debt.
Under the terms of the separation plan, Hugo Neu will assume total ownership of the former JV facilities in California, New Jersey and New York, which also include marine terminals.
Schnitzer Steel will take over several operations that the companies shared in Maine, Massachusetts, New Hampshire and Rhode Island, while acquiring 100 percent ownership of Hugo Neus scrap metal and green waste recycling business in Hawaii.
A Hugo Neu subsidiary also will pay Schnitzer Steel $52.3 million to round out the deal.
Portland, Ore.-based Schnitzer Steel hooked up with Hugo Neu on Nov. 19, 1996, when Schnitzer Steel bought Proler International Corp. Proler had operated joint ventures with Hugo Neu since the mid-1960s
