January, 05 2006
Dr Irani predicts steel prices to remain in $350-$400 range in 2006
The global steel prices currently hovering around $350 to $400 per tonne will remain firm this year and touch around $500 dollars, with the next round of peak prices to be witnessed only around 2008, Tata Sons Director Dr JJ Irani said
He said that the current stable prices were obtained after a peak price of $700 to $650 witnessed during late 2004 and early 2005. The increase was mainly due to hike in rates of inputs such as coal and iron ore. Steel prices see a fluctuation in prices during a five-year cycle, he added.
SAIL scouts for mines in Poland & Russia
It is reported that Steel Authority of India Ltd is considering joint ventures to take over greenfield coal mines in Poland and Russia. Teams from the steel company had visited Poland and Russia to look at the mines being offered, which were new blocks in existing coal belts, SAIL chairman Mr VS Jain is reported to have told a daily
Mr Jain said he would look at three-way JV with CIL and Russian and Polish companies to tap these offerings. We are open to talks on stakes, but will insist on long-term deals for coal supplies from these mines our supplies could be higher than the pro-rata norm fixed by the equity stake we pick up, he added.
SAIL has been looking around for foreign coal equity in Tahmoor and Maruwai mines in Australia and Indonesia, respectively but the company had decided not to buy as they did not have significant reserves. The Russian and Polish offers are, however, considered better blocks as they are virgin mines.
TATA Steel Q3 output increases
TATA Steel's production has increased during the third quarter of the financial year 2005-06, despite shutdowns for maintenance and other works.
A statement issued by the company said production of hot metal, crude steel and saleable steel registered an increase of 13% at 1.25 million tonne, 7% at 1.13 million tonne and 9% at 1.14 million tonne respectively.
The company said that the increase in production assumes significance in view of maximum number of shutdowns for planned maintenance and upgradation of capacity.
Protecting tribal interest in land acquisition for steel mills
The massacre in Orissa has cast a shadow on the way tribal are being compensated by the government while acquiring the land for the purpose of setting up steel mills in Orissa, Jharkhand and Chattisgarh. The writing on the wall indicates further bloodshed if the existing methods of compensation are continued
Under the current rehabilitation package of the state, besides cash compensation for land, the government assures job for each displaced family, facility for shifting and resettlement at agreed sites.
Several suggestions have come up in Jharkhand. Sign MoUs with the people first, advised Cardinal Telesphore Toppo, while former Ranchi University vice chancellor Dr Ram Dayal Munda suggested a formula by which land would revert to the tribals or land-owners once industries shut shop or mines closed down. Jharkhand Mukti Morcha chief Mr Shibu Soren demanded if land is acquired for industry, compensation should take the form of equity shares and the displaced should be assured of fixed returns.
CCEA to sell 15% in NMDC and 10% in Neyveli Lignite Corp
Despite the Lefts objections, the UPA government is moving ahead with its plans to disinvest its shares in two profit-making public sector undertakings National Mineral Development Corp and Neyveli Lignite Corp. It sent out proposals for the Cabinet Committee on Economic Affairs to offload minority shares in both PSUs.
The proposal is to sell 15% of government shares in the countrys largest iron-ore producer NMDC and 10% in lignite producer and power generator NLC. The government currently holds 98.38% in NMDC and 93.56% in NLC.
The intention in both share sales is to provide funding to the National Investment Fund. The proposals promise to retain the government majority of 51% in both PSUs.
BHEL bags order from JSPL for power plant at Angul
Bharat Heavy Electricals Ltd has bagged a "repeat order" for "2X250MW" captive Power Station to be installed at Angul in Orissa by the Jindal Steel and Power Limited after the visit of the Vice Chairman of JSPL to BHEL recently
The agreement for the Rs.1800-2000 crore orders had been signed on Dec26 on negotiated Basis. The execution of the order would commence in January second or third week that is from the date the advance money is paid.
The BHEL was already executing an order for a similar power station at Raigarh for the same company.
While the BHEL,Tiruchi would manufacture the Boiler, The auxiliaries would be supplied by the Ranipet BHEL Auxliary unit. The control equipment would be supplied by BHEL's electronic wing, the official said.
Vizag Port blazes new trail in monthly throughput
The monthly throughput of Visakhapatnam Port for December 2005 has touched a record 5.5 million tonnes, the highest-ever achieved by an Indian port, a press release issued by the Visakhapatnam Port Trust (VPT) authorities. Thus, the Port broke its own earlier record of 5.1 million tonnes handled in March 2005.
Vizag Port has, in the 9 months of the current fiscal, handled 41.1 million tonnes of cargo, as against 36.2 million tonnes during the same period of 2004-05an increase of 14%
The target for the current financial year is 55 million tonnes. This means the Port has exactly 3 months to handle the remaining 13.9 million tonnes so as to reach the fiscal target. Considering the trend so far, Vizag Port may well exceed this target.
TATA Steel not responsible for Orissa massacre
Dr Irani said the TATA had nothing to do with tribal protest over land acquisition at Kalinga Nagar in Orissa. ''We are not involved in any construction in the disputed site as the Government has to acquire land and provide to the company. It is up to the Government to deal with it.''
TATA Steel could take up the project only after the Government cleared the lease for iron ore mining.
He also mentioned that the company had acquired land at a cost of Rs 140 crore and rehabilitated around 9,000 people in Gopal Nagar, where TATA Steel had planned this project. However, it was given up later as the necessary infrastructure was not provided by the Government.
M&M acquires UK's auto forging Stroke Group
Leading manufacturer of general purpose vehicles and light commercial vehicles Mahindra & Mahindra Ltd M&M announced that it has acquired 98.6% stake in UK based automotive forging company, Stokes Group Ltd, from its existing shareholders. The acquisition strengthens the Mahindra Systems and Automotive Technologies MSAT, which aims at offering a full range of services from design to delivery covering engineering services, strategic sourcing of components and supplying of auto component as Tier 1 manufacturers
"We believe the Stokes acquisition demonstrates our commitment to build a world class business that serves its global customers and enhances value for M&M's stakeholders" M&M vice chairman and MD Mr Anand Mahindra, said.
Stokes Group includes three companies with two manufacturing firms situated at Walsall and Dudley, near Birmingham in UK and its major customers are Koyo Bearings, GWK Group, Land Rover, Bosch, Visteon, Ford and Jaguar among others, it said.
Mumbai Port registers 27% growth in April-Dec. 2005
Mumbai Port handled 33.16 million tonnes of cargo during the first 3 quarters of the current fiscal as against 26.07 million tonnes for the first 3 quarters of 2004-05, thereby registering an increase of 27%. A significant contribution towards increase in tonnage was from the handling of larger quantities of iron and steel
During April to December 2005, there has been an increase in tonnage of iron and steel by 24.17%
Given the present trend of cargo handling at Mumbai Port Chairperson of the Mumbai Port Trust expressed confidence that the Port would be able to handle 40 million tonnes of cargo in the current fiscal, thereby surpassing that handled in 2004-05.
GMB asks Hutchison to take early decision on Mithivirdi port
It is reported that HK based port developer and operator, Hutchison Port Holdings HPH, has reportedly completed its feasibility study for a mini-port for Mithivirdi port in the Bhavnagar district of Saurashtra on the coastline of Gujarat. HPH has collected technical data and evaluated it at the highest level.
GMB has urged HPH to convey its decision to GMB as soon as possible because we would like to offer the project to Austin Holdings in case HPH decided against it.
Australian Austin Holdings has also shown interest in setting up a small port in the state at one of the three locations provided by GMB and the state government at Mithivirdi, Simar and Bedi. GMB is understood to have completed a preliminary study on possible ports at Mithivirdi, Bedi and Simar.
S Korean POSRI sees 50 million tonnes surplus from China in 2006
South Korean steelmakers are expected to further reduce steel prices during 2006 due to increased imports from China, a research institute associated with the nation's largest steelmaker POSCO said. The POS Research Institute said in an annual forecast of the Chinese steel industry that China's reduced demand for imports, sagging prices and the expected appreciation of the Chinese currency will lead to a slump in both volume and prices of Korean exports to China.
"Although the Chinese steel demand is expected to show steady growth of 10%, an upsurge in its production capacity will result in an oversupply," the report said. "The estimated Chinese steel demand and production this year are 403 million metric tons and 434 million tons. Considering imports of 20 million tons, there will be an oversupply of 50 million tons." However, production could slow down as inventories pile up and the operation rate of facilities drops, POSRI said.
The institute predicts that trade tensions and difficulties in securing new export lines will limit China's steel exports to 50% growth YOY to 30 million tons. "Oversupply of Chinese steel will have a great impact on its closest neighbor Korea, deteriorating its market conditions with further price falls and mounting competition with Chinese products over volume," POSRI said.
"The Korean steel industry is therefore required to take collective action in cutting costs and monitoring market conditions to defend the domestic market."
EU steel prices outlook from MEPS
MEPS reports that in the flat products category that, as anticipated, the European mills will not achieve their target increases for first quarter deliveries of all flat products. With lower Asian prices and much more availability from that region the, hard worked, production curbs in recent months are likely to become less effective. Our price projections for the next twelve months have been down rated accordingly.
MEPS now forecast slightly declining prices over the next six months in the EU strip mill segment. There are signs that imports are, once again, becoming attractive to buyers. The mills are likely to be required to abandon their aspirations of price increases and offer modest reductions in an effort to stave off an influx of third country material into the market. Price falls are also expected during the first half of 2006 in the plate segment.
Regulation of output in Asia should occur next year. Prices in the EU are forecast to recover somewhat during the second half of 2006.
MEPS said that recently reported price reductions in Asia have not been fully incorporated in forecasts and the balance of probabilities lie at 70:30 that their predictions will be on the high side. The rate of decline could be faster and deeper - given the widening disparity between Asian and North American/EU values.
Market demand for long products remains variable across the EU. This month's lower prices brought about mainly by a large reduction in wire rod values have prompted us to downgrade our EU average forecast into 2006. MEPS still anticipate weaker demand through the winter months and, therefore, slightly lower prices. The threat from imports could increase marginally. However, MEPS maintain our belief that prices will recover during the spring and summer next year before falling once again as winter approaches. These predictions assume no major fluctuations in scrap costs over the period.
Russia & Ukraine settle gas dispute
Ukraine agreed to almost double the price it pays Russia for gas, settling a dispute that cut shipments to Europe and damaged Russias reputation as a reliable energy supplier.
Ukraine will pay an average $95 per 1,000 cubic meters for the fuel for five years, up from $50 under a previous arrangement, OAO Gazprom, Russia's state-owned natural-gas monopoly, said in Moscow today.
Gazprom backed down from an earlier plan to quadruple gas charges to Ukraine in line with prices of about $250 per 1,000 cubic meters charged to Western European customers. Today's agreement will cost Ukraine about $1.5 billion extra a year
Baosteel expects lukewarm profit growth
Baosteel the world's sixth biggest steelmaker, China's biggest and most profitable steelmaker, expects stagnant profit growth in 2005 because of sliding domestic steel prices which mirrors dropping steel-industry profits.
Baosteel expects to chalk in revenue of 167 billion yuan ($20.69 billion) for last year with a profit of 22 billion yuan, Ms Xie Qihua, Baosteel's chairwoman said. "Baosteel experienced huge prices fluctuation and fierce market competition in 2005 and managed to fulfill that year's target," Ms Xie said.
"The year 2006 is a key year for Baosteel," Ms Xie said. "The company will meet the challenge brought by an overall market oversupply, improve its products mix and build up its own research and development capacity."
Ms Xie said Baosteel was projected to make 22.72 million tons of crude steel last year, a year-on-year increase of 6.3%. In Ms Xie's blueprint, Baosteel's production capacity will top at least 30 million tons by 2010. Ms Xie aims to build Baosteel into one of the world's top three steelmakers by 2010, leapfrogging its arch rivals Posco, JFE Holdings Inc and Nippon Steel Corp.
Analysts said last year's dropping steel prices were the main brake on Baosteel's further profit growth. Chinese steel prices have kept dropping since April 2005. Slumping prices are caused by oversupply and market panic amid government curbs. China has tried to cool the industry by scrapping the tax rebate on pig iron and semi-finished products exports and cutting the tax rebate on certain steel products.
S Korean Hyundai shipbuilder to buy Chinese plate company shares
Hyundai Heavy Industries Co the world's largest shipbuilder said that it reached a preliminary agreement to buy a stake in China's Qinhuangdao Shouqin Metal Materials Co. Hyundai Heavy inked a letter of intent to buy shares in Qinhuangdao Shouqin to secure cheaper steel plates, the South Korean company said in a regulatory filing. Hyundai Heavy, however, said details, including how much it plans to invest in the Chinese steel firm or how much of stake it will buy, haven't been determined yet.
"We decided to invest in the Chinese steel company to buy cheaper steel plate for shipbuilding. Detailed investment plans will be released later after further negotiations," Hyundai Heavy spokesman Mr Kim Kwang-Kook said.
Hyundai Heavy has secured record new shipbuilding orders for the past three years, but the company and its two smaller shipbuilding units Hyundai Mipo Dockyard Co and Hyundai Samho Heavy Industries Co have been having difficulties in securing enough steel plates to meet their orders, Mr Kim said. Hyundai Heavy, along with its units, consumed 2.7 million tons of shipbuilding steel plates last year. Out of the total, Hyundai Heavy purchased 55% of its steel from South Korean steel makers, including Posco and imported 35% of its requirement from Japanese steel makers. It purchased the remaining 15% of steel from other countries, mainly from China, according to the spokesman.
Qinhuangdao Shouqin is a steel making unit jointly owned by China's Shougang Concord International Enterprises Co and Shougang Corp.
Mittal Steel may cut natural gas use at Kryvorizhstal
Mittal Steel is reported to have said that it may cut gas use at its Kryvorizhstal mill in Ukraine after an accord by the country with OAO Gazprom means the cost for the fuel it gets from Russia will almost double. The company may use coke from its plants in Poland and the Czech Republic to fire its furnaces, reducing the amount of natural gas it uses in the Ukraine, Mr Paul Weigh a spokesperson said
Mittal Steel may be able to reduce its natural gas consumption to 50 million cubic meters of gas a month, half of what it uses now and the rise in gas prices from Gazprom will have minimal impact on production costs, Mr Weigh said.
Mittal will not cut steel production at Kryvorizhstal, which is based in the southern part of the country, he added. Ukraine will pay Russia $95 per 1,000 cubic meters for the fuel for five years, up from $50 under a previous arrangement, OAO Gazprom, Russias state-owned natural-gas monopoly, said at a press conference in Moscow on Wednesday.
Samarco wants tax exemption to import steel tubes
It is reported that Brazilian iron ore miner Samarco wants to import 7,000 MT of steel tubes for its 400 kilometer Germano-Ubu pipeline expansion. The iron ore pipeline project is part of a US$1.18bn expansion plan to boost pellet output. Samarco's board approved the project in October 2005.
As per a report in a local daily, Samarco is looking for exemption of 14% import duty on these pipes. "Our decision to import part of the tubes is based on the product's specification," Samarco project director Paulo Rebello said.
The imported steel tubes would account for 50 kilometer of the 400 kilometer project and Brazilian steel tube maker Tenaris - Confab will supply around 32,000 MT of tubes for 346 kilometers to Samarco under a $51 million contract.
But Brazil's steel tube industry does not want Samarco to receive the tax exemption for tube imports.
Samarco is 50:50 JV between CVRD and BHP
South Korean shipbuilders see profits surge on revenue growth
Notwithstanding a recent dip in shipbuilding demand and prices, local shipbuilders are expected to enjoy growing profits this year as they are set to launch new high-priced vessels that were ordered during the boom days. Market experts expect shipbuilders to turn large profits in years to come, as the low-priced shipbuilding orders were mostly completed last year.
"We forecast shipbuilders' profitability will substantially improve from 2006," said Mr Park Joon-hyung, a research fellow with Hyundai Securities Co. "The vessels that have been ordered since the fourth quarter of 2003, when ship prices rose sharply, are to be launched this year," he added, emphasizing the average shipbuilding price doubled over the past two years.
Hyundai Securities' Park said the price drop in steel will make shipbuilding more cost-effective, because the thick steel plate accounts for some 15 percent of the total manufacturing cost on average.
Despite a remarkable surge in their revenues over the last three years, major shipbuilders, including Hyundai Heavy Industries Co. and Samsung Heavy Industries Co., have been suffering shrinking profits and even losses. Since the shipbuilders have been delivering the vessels ordered at a discount in 2002 and 2003, they could barely make ends meet under the austere budgets.
Finlands Morenia to sell Outokumpu's steel slag products
Finnish Outokumpu is transferring the sale of its steel slag products from Ruukki to Metsallitus' soil supplier Morenia as of the beginning of 2006. In future, Outokumpu will focus on developing cement filler and cement replacements.
In 2005, Outokumpu sold about 70,000 tons of steel slag to be used in construction, and about 15,000 tons for other use. The target is to sell about 300,000 tons of steel slag a year. The theoretical capacity of production at the moment is only 150,000 tons. In future, slag products could be imported to all the countries in the Baltic Sea area.
Mittal Steel US plans galvanneal facility in New Cleveland
The new hot dip galvanizing line at Mittal Steel's Cleveland plant, to be completed during the first quarter of 2006, will produce coated steel for both exposed and unexposed automotive parts and as the new galvanizing line nears completion, the company is making plans to add galvannealing capability to meet anticipated future automotive customer requirements.
To keep up with the increasing demand for galvannealed sheet, the company has now formed a team to perform the engineering, evaluate technologies and seek bids to enhance the line to produce galvannealed. The additional galvannealed capacity will enable Mittal Steel to serve a wider spectrum of automotive applications.
The coating line will be rated at 500,000 tons a year, any portion of which could be produced as galvanized or galvannealed. The company could start offering galvannealed steel from the line as early as the first quarter of 2007.
BASF makes a hostile $4.9 billion takeover bid for Engelhard
The BASF Group of Germany, the world's largest chemical maker, made a hostile takeover bid of $4.9 billion yesterday for Engelhard, an American company that invented the catalytic converter for cars. BASF first approached Engelhard, which is based in Iselin NJ with an offer in December but was rebuffed. By taking its offer directly to shareholders and trying to circumvent Engelhard's board, BASF is acting unusually for a corporation in Germany, where hostile takeovers are rare.
The all-cash bid of $4.9 billion, which represents $37 a share, is the largest BASF has ever made for an acquisition. "We think this is a very attractive offer to all shareholders which they should very seriously consider," Mr Jrgen Hambrecht, the BASF chairman, said in a conference call. Mr. Hambrecht said the move was part of a wider plan for expanding the technologies the company sells. "This altogether certainly will enlarge our platform, will speed up innovation, will help our customers," he said in the interview. "At the end of the day, it's future growth opportunity."
Engelhard, which specializes in manufacturing clean-air technology, yesterday urged that shareholders "take no action at this time" on the offer, which would represent almost a 23% premium over Engelhard's year-end closing price. Engelhard issued a statement late yesterday saying its board would meet to discuss the offer and make a recommendation to shareholders "in due course."
Globally, Engelhard makes approximately one-third of all catalytic converters installed in vehicles. The catalytic converter revolutionized the auto industry in the 1970's by breaking down harmful gases, like carbon monoxide, that car engines produce. Today the converter is credited with significantly reducing smog and air pollution.
Natural gas prices to effect steel mills costing in Ukraine
The gas dispute has already dented Ukraine's energy-intensive economy. Chemical and metallurgical industries slowed production to reduce demand by 15% to 20%, according to a statement by the Ukrainian government.
Natural gas-guzzling steel mills and chemical plants earn much of Ukraine's export revenues. Outdated and inefficient, many have scraped by since the collapse of the Soviet Union only because of cheap energy from Russia. Market rate energy prices, which Ukrainian officials acknowledge they must pay eventually, could plunge Ukraine back into recession, officials here have said.
On average, metallurgical plants would become unprofitable at natural gas prices above $105 per 1,000 cubic meters, according to estimates
Under the 2005 contract, negotiated before the Orange Revolution, Ukraine pays $50 per 1,000 cubic meters. Gazprom is asking for $220 to $230 now, about double what most other former Soviet states pay.
Bronco Coal pays $35 million for Hazleton mine
Arizona based Bronco Coal Co a subsidiary of the Bronco Energy Fund said that it has acquired the land, permits and mineral rights for the Hazleton Coal Mine in northern Gibson County near the White River for $35 million. The mine was previously operated by White River Coal Inc. The mine supplies several area power plants. The purchase was financed with cash and through a debt facility, Bronco said in a statement. The move is the company's first foray into mining in the Illinois Basin.
"The Hazleton mine was an easy choice for Bronco due to its low sulfur compliance coal and the market demand for it," said Mr Dan Hodges, Bronco's co founder and executive chairman. Bronco is focusing its recent investments in smaller, niche mining operations, and the Hazleton mine fit the bill Mr Hodges said. "Bronco is not just after large coal reserves, but is making acquisition choices based on present and anticipated market demand, proximity to those markets and ultimate profitability," Mr Hodges added.
The mine is expected to produce 1.45 million tons annually at its peak. According to figures from the Indiana Coal Association, the underground mine produced 712,595 tons of coal in 2004. The majority of the reserves are contracted for the next two years to utility companies for blending and compliance with emission standards for power generation, Bronco said.
White River Coal began mining at the site in 2002. At that time, company officials said they expected the mine to produce about 1.5 million tons annually at its peak and estimated it had about 10 to 15 years of reserves available.
Bronco Energy, formed in 1997, invests in companies and projects focused on coal and oil exploration, "clean power" technologies and coal-to-liquid processes. Its affiliated companies include Bronco Coal Co., Bronco Power Co., Bronco Petroleum and Bronco Emerging Technologies. The company also operates a coal mine in Utah.
Alpha Steel takes on Macsteel Service Center name
Macsteel Service Centers USA Inc. announced today that its recent acquisition, Alpha Steel, a distributor of hot rolled and structural steel products in the Midwest, will now operate under the name Macsteel Service Centers USA.
The newly named Hammond, Indiana plant processes and distributes a broad inventory of structural steel beams, shapes, plate, sheet, tubing and pipe products. It is strategically located 19 miles outside of Chicago, supplying a large customer base of steel fabricators and OEMs. In addition, Alpha operates a complete in-house processing center for hot rolled steel products.
Mr Michael Hoffman, Macsteel Service Centers USA President and CEO, stated, "With the addition of Alpha Steel, we have greatly strengthened Macsteel Service Centers USA's already solid presence in the Midwest. As we had expected, the company and its capabilities have been a perfect complement to our existing structural business in the Midwest. We are very proud to have them under the Macsteel Service Centers USA name."
Macsteel Service Centers USA is one of the leading companies in the North American metals service center industry. The company has a network of 32 locations. Macsteel Service Centers USA is headquartered in Newport Beach, CA and is owned by the global steel company, Macsteel Holdings.
Roanoke Electric Steel reports record 2005 results
Roanoke Electric Steel Corporation has reported net earnings of $17.4 million for the fourth quarter ended October 31, 2005, a 9.8% increase from net earnings of $15.9 million for the same period last year. Sales for the quarter were $141.0 million as compared to sales of $139.1 million for the same period last year.
For the year ended October 31, 2005, the Company reported record net earnings of $40.3 million up by 32.4% from the previous record net earnings of $30.4 million achieved last year. Sales for fiscal 2005 were a record $546.6 million up by17.4% from the previous record sales of $465.5 million for the same period last year.
Donald G. Smith Chairman and CEO and T Joe Crawford President and COO stated that "The sales increase was due to improved average selling prices for most of our products. The improvement in average selling prices was principally due to the volatile scrap market, which prompted industry-wide price increases due to the rising cost of scrap steel.
They added that During 2006, we look forward with excitement and anticipation to the completion of the previously announced combination with Steel Dynamics Inc The merger will place the Company in a better position to undertake necessary capital projects, meet competitive pressures, and serve customers more efficiently. The financial strength of Steel Dynamics Inc will permit the Company to obtain better economies of scale and greater opportunities for growth during the coming years."
Steelworkers move to block Algoma payout bid
The United Steelworkers applied for a court injunction on Wednesday to block a US hedge fund's bid to force Algoma Steel into a payout the union says would threaten the steel maker's economic viability. The move by the union comes one day before an Ontario court decides whether to grant Algoma's biggest shareholder, Paulson & Co its request to get a March shareholder meeting moved forward so it can vote on whether to replace Algoma's board.
Paulson, which controls about 19%ercent of Algoma, asked for the meeting after the company shot down its request to refinance debt and pay out C$420 million ($365 million) to shareholders as a way to boost the company's share price.
But the union says Algoma's shareholders have enjoyed a return of 673% in the four years since it emerged from bankruptcy protection. "Algoma has already produced extraordinary returns and taking more cash out of the company now would leave creditors, retirees and employees in an unfairly vulnerable position," the Steelworkers said in a release.
Steel Tech forecasts $210mn Q1 2006 sales
Kentucky-based Steel Technologies is expecting to report $3.1 million earnings for the three months ended December 31, the company said in a statement. Shipments for the quarter are expected to total some 270,000 MT for 1QFY06, the statement said.
During the previous quarter, sales reached $204 million, while net income came in at $1.54 million, a 90% drop YOY due to weak demand and lower prices.
Steel Technologies has steel slitting, cutting and re-rolling plants in Mexico's Nuevo Le and Tamaulipas states. The company provides value-added steel products, largely to the automobile industry and equipment manufacturers.
Reliance Steel buys rest of subsidiary Steel LLC
Reliance Steel & Aluminum Co., which sells stainless steel and other specialty metals, said Wednesday that it bought the rest of its subsidiary American Steel LLC that it did not already own for an undisclosed sum. Reliance said it bought the remaining 49.5% stake of the subsidiary from American Industries Inc. It had owned a 50% stake in the subsidiary from 1995 to 2002, when it raised its interest to 50.5%.
American Steel operates metals service centers in Oregon and Washington, and processes and distributes primarily carbon steel products. Last year it generated sales of about $107 million.
PM says Ukraine must modernize steel sector and use less gas
Prime Minister Mr Yuri Yekhanurov said Ukraine "consumes too much gas and will do everything it can to drastically reduce its gas consumption", including modernizing its steel sector, following the resolution of its gas crisis with Russia.
Mr Yekhanurov told a news conference: "This is the conclusion: Real Ukrainian independence will only be possible when we are self-sufficient in energy." "To do this, we will have to modernize our industry, especially steelmaking," he added.
Tender for Izmir Port privatization starts
The privatization process for the transfer of the operating rights of Izmir port has begun. Bids offered may be paid either in cash on the date of the signing of the contract for the transfer of operating rights.
If the amount is paid in installments, at least 50% of the total will be paid on the signing date, at least 25% a year later and another 25% two years after the signing. A simple interest rate of 9% will be applied to the amount to be paid in installments.
Prospective bidders in the tender process will have to have a turnover of at least $100 million or have available funds equal to at least $100 million, or else have at least $75 million in assets or at least $30 million in total equities in 2005. If a joint venture company wants to make a proposal, at least one of the partners of the joint venture should have the financial capability conforming to the above criteria.
It is obligatory to buy bid specifications and promotion documents prior to entering the tender process. A bid bond (provisional bond) costs $15 million while tender documents are sold for 15,000 YTL. Applications for the tender may be submitted to the Privatization Board from March 24 to April 7
Alstom & Aker Yards to set up shipbuilding JV
French engineering conglomerate Alstom plans to set up a shipbuilding joint venture with Norwegian company Aker Yards which will own a 75% stake, the two companies announced. The joint venture will include Alstom's subsidiary Chantiers de l'Atlantique shipyard in St. Nazaire and Lorient and Aker Yards will pay 50 million euros for the 75% stake in the new company, the two companies said in a joint statement.
Alstom will commit itself to keeping until 2010 the remaining 25% which Aker Yards has an option to buy for a price depending on financial performance.
The agreement was not final yet, but Aker Yards said it expected the deal to close by the end of March.
Mr Ross has history of putting safety first
ICG, based in Ashland, now mines and processes coal in six states at more than 30 locations, including the Sago Mine where a Monday morning explosion cut off the miners from the surface about 260 feet underground. Mr Wilbur Ross led the group of investors who formed International Coal Group Inc in May 2004 by buying most of the assets of a bankrupt coal operator Horizon Natural Resources. Mr Ross is known for turning around troubled companies without scrimping on safety.
While investigators have yet to pinpoint the explosion's cause, workers from Ross' previous venture give him high marks for safety.
The Sago Mine was among the holdings ICG inherited when it bought Anker West Virginia Mining Co which had been in bankruptcy. ICG announced the purchase in March and began running the Upshur County mine November. 21
By then the US Mine Safety and Health Administration had cited Sago for 194 alleged violations of federal regulations in 2005; it issued 14 more citations by year's end. The mine also reported 20 roof falls last year, most recently on Dec. 5. Citing the recent takeover Mr Gene Kitts Senior Vice President for Mining Services said ICG had greatly improved safety at the mine since. "We've been working closely with the regulatory agencies on various issues such as supervisor training. We're working to improve the safety program across the board," Mr Kitts said. "We're instilling the notion that this is a continuous improvement process."
ICG reported $4.2 million profits in 2004 on sales of $136 million. With 1,425 employees, it estimated its coal reserves at 572 million tons in January 2005.
Schnitzer Steel pays ex CEO's legal fees
Schnitzer Steel Industries Inc paid former CEO Mr Robert Philip a $2.6 million bonus last year and advanced him more than $410,000 for legal expenses related to an ongoing federal investigation, the company disclosed last week.
Schnitzer Steel said it advanced Mr Philip legal expenses related to the investigations at his request, according to the proxy. The company's bylaws require it to protect current and former directors from losing personal assets in work-related lawsuits, and to front expenses for pending or threatened legal proceedings, the proxy said.
The U.S. Department of Justice and the SEC are investigating the company's past practice of paying improper commissions to purchasing managers in Asia, which came to light during Philip's tenure. The company's board launched its own investigation into the practice in late 2004.
Mr Philip, who resigned in May, received the bonus on top of his $494,846 salary for nine months' work during the company's last fiscal year, which ended August 31
South Korea ships thermal coal to North Korea
SOUTH Korea has begun supplying North Korea with 60,000 tonnes of coal worth 6 billion won ($8.2 million) in early December and planned to complete it at the end of this month
The coal was being sent to an industrial complex in the city of Kaesong, close to the border with South Korea, to help fuel factories and households during a bitter winter
North Korea has been suffering chronic energy shortages after years of isolation, amid a feud with Washington over its nuclear weapons programs.
