May, 13 2006
Government to merge BRL with SAIL
It is reported that government is considering a merger of Bharat Refractories Ltd with Steel Authority of India Ltd. Steel Minister Mr Ram Vilas Paswan told reporters "We are agreeable to BRL merger with SAIL in principle. The expert committee set up by the Ministry to examine the issue has already made a recommendation to this effect," here. Mr Paswan said ministry would also hold discussions with SAIL management shortly to take this ahead.
BRL Board has already passed a resolution accepting the company's merger with SAIL. BRL reported a net loss of Rs 5 crore in the last fiscal and is currently implementing a restructuring package sanctioned by Board for Industrial and Financial Reconstruction.
BRL was set up in 1974 and has four units two in Ramgargh, Jharkhand and one each in Bhandaridah in Bihar and Bhilai with a total production capacity of 81,000 tonnes. It has fixed assets worth Rs 1.22 billion and manpower strength of 1,693.
RINL to raise foreign debt for expansion
Rashtriya Ispat Nigam Limited is planning to raise foreign debt for its proposed expansion plan. Mr Y Siva Sagar Rao CMD of RINL, while speaking at the sidelines of a CII Conference on Natural Gas, said that We propose to have a combination of foreign and domestic debt for the expansion program.
RINL is yet to appoint lead managers for the debt raising activity.
RINL has recently obtained approval from the Union government to expand the capacity to 6.3 million tonnes with an investment of Rs 8,600 crore. The project cost will have a debt equity ratio of 1:1.The expansion is expected to be launched by Prime Minister Dr Manmohan Singh on May 18, 2006.
Railway to set up SPVs to construct dedicated corridors
Indian railways have decided to set up a special purpose vehicle to plan, construct and maintain the dedicated freight corridors connecting the four metropolises. Minister of State for Railways Naranbhai J Rathwa said that the SPV would also be responsible for movement of trains within its jurisdiction.
He said that Rail Vikas Nigam Limited has signed five MoUs for creating SPV for port connectivity projects. They are Bharuch-Dahej gauge conversion, Surat-Hazira new line, Bhindi-Samdari gauge conversion, Obulavaripalle- Krishnapatnam new line and Haridaspur-Paradip new line.
Haridaspur- Paradip new line is the only port connectivity project in Orissa with public-private partnership, he said adding that it expected to handle iron ore traffic between Banspani and Paradip Port and cocking coal from Paradip Port to various steel plants.
DLF makes mega public offering
DLF Universal Ltd aims to raise Rs 13,600 crore by issuing 202 million equity shares, each having a face value of Rs 2. The shares will be offered at a premium to be decided through a 100 per cent book building process. This will be the biggest IPO ever in India, comfortably overtaking the TCS float of Rs 5,000 crore in August 2004.
The issue, if the green shoe option is exercised, will constitute 12.77 per cent of the fully diluted post issue capital of the company. That will leave about 87% equity under the control of DLF chairman Mr KP Singh and his son DLF vice chairman Mr Rajiv Singh.
If the company is able to raise the money from the market, its total value will be pegged at Rs 106,499 crore. The notional value of the holding in the hands of the father and the son will be Rs 92,899 crore, or about $20 billion, placing them second in the list of the richest Indians, just behind Mittal Steel chairman Mr LN Mittal.
Government allots 5 million tonnes of coal for small consumers
Minister of State for Coal Dr Dasari Narayana Rao informed that government has allocated 5 million tonnes of coal at a special floor price to State nominated agencies and National Cooperative Consumers' Federation for meeting the requirements of small and tiny consumers.
TopIndian railway lags behind in freight movement
Minister of State for Railways Naranbhai J Rathwa admitted in Rajya Sabha that the lack of effective freight transport by rail network and delivery logistics was affecting economic growth of the country.
Comparing Indian railways freight movement with China, he said between 1992-2002, the two railways carried almost the same volume of passenger traffic, but the Chinese railways carried four and half times the freight traffic than carried by Indian railways.
Adhunik Metaliks resumes operations of DRI division
Adhunik Metaliks Ltd has informed that its DRI plant has started operation from May 11, 2006 and the entire capacity of the Company is running in full swing.
CILs output per man increasing
Indias Minister of State for Coal Dr. Dasari Narayana Rao informed that the work force in coal industry is decreasing mainly due to superannuation and voluntary retirement scheme. Fresh recruitment is being done only under the provision of rehabilitation policy, National Coal Wage Agreement, and filling up of backlog vacancies of SC/ST.
Production per employee i.e. output per man shift in Coal India Ltd during 2005-06 has been 3.28 in place of 2.45 in 2001-02. It has been going up since last 5 years.
Electrosteel Castings announces issue of FCCBs
Electrosteel Castings Ltd has informed that the Company has entered into a Subscription Agreement with CitiGroup Global Markets Ltd, sole Book Runner and Lead Manager for issue of Foreign Currency Convertible Bonds of $60 Million on May 11, 2006, with a green shoe option which has been exercised on May 12, 2006. The deal is expected to be closed in this month.
Broad Terms for FCCBs include issue size of $75 Million including $15 million greenshoe option, bonds are unsubordinated and unsecured, issue price is 100% and the listing of FCCBs will be on Singapore Stock Exchange.
Mr Haribhakti resigns from JSW board
Jindal South West Holdings Ltd has informed BSE that Mr Shailesh Haribhakti has resigned from his office of the directorship of the Company wef May 03, 2006.
TopArcelor to exercise share buy back option
Arcelor has called an extraordinary general meeting of shareholders in Luxemburg, for Friday 19 May, 2006. The agenda contains a draft resolution providing for a public offer to buy back shares of the company for the purpose of their cancellation. This offer will be open to all shareholders and will concern a maximum of 150 million shares, at a price to be set by the Board of Directors, but not exceeding 50 euros per share.
Given the quality of Arcelors balance sheet, its payout capacity and economic prospects, the Board of Directors had announced its intention to distribute a total amount of 5 billion euro to the shareholders, coming from the groups available cash flow. A public share buy-back offer figured among the possible options announced on April 4.
Under Luxemburg company law quorum requirements, 50% of the share capital must be present or represented in order to vote on the agenda. If the quorum is not reached, a second meeting will be called for the end of June 2006, in accordance with the legally prescribed time limit; there is no quorum requirement for this second meeting.
Mittal Steel questions Arcelor\'s proposed buyback move
Mittal Steel has said that Arcelor's proposed share buyback program could break certain regulations if it is implemented during Mittal's formal takeover period, but stressed that it would not alter the financial terms or valuation of its current cash and shares offer for the Luxembourg-based steel producer.
Mr Aditya Mittal President & CFO of Mittal Steel told journalists on a conference call It raises a lot of questions which we hope the regulators will take a close look at. In some jurisdictions, a tender buy back at above the prevailing market price of the shares during an offer period would be illegal. However, even if the buyback goes ahead, Mr Aditya Mittal said it would not affect the timing or financial structure its current cash and shares offer. He said We have a mechanism in place in our proposal that will adjust for any share buybacks or increased dividend payments by Arcelor. It will not affect the timing or structure of our offer.
Arcelor yesterday announced that it would seek approval of share holders to buy back up to 150 million shares at up to 50 euro per share, indicating a buyback worth up to 7.5 billion euro. Arcelor's shares currently trade at around 35 euro per share.
Arcelors net down by 19.8% in Q1 of 2006
The Arcelor board of directors reviewed the consolidated accounts for the first quarter of 2006. The consolidated net result was Euro 761 million versus Euro 949 million for the first quarter of 2005. The consolidated revenues increased by 17.3%, 10.8% on a comparable basis, to Euro 9.565 billion as compared to Euro 8.157 billion for the same period last year.
For flat carbon steel operations consolidated revenues amounted to Euro 5.381 billion as compared to 4.756 billion for the first quarter 2005 with European operation contributing Euro 4.450 billion, Brazilian 558 million and Canada 373 million, an increase of 13.2% with 5.1% on a comparable basis. This increase is essentially explained by the consolidation of Dofasco as of March 1st 2006 and growing shipped volumes, particularly in Brazil. Total shipments were 8.504 million tonnes, including 433,000 tons from Dofasco, as against 7.396 million tonnes for the same period last year. The sale volume in Europe increased by 6.5% to 6.720 million tons as compared to 6.311 thousand tons in Q1 of 2005 and by 24.5% in Brazil to 1.351 million tonnes as compared to 1.085 million tons in Q1 of 2005.
For long carbon steel operations consolidated revenues amounted to Euro 1.875 billion for the first quarter 2006, an increase of 19.6% with 30.7% on a comparable basis. This includes 1.074 billion for Europe, 717 million for Americas and 93 million for wire drawing activities and compares with Euro 1.562 billion total revenues for the first quarter 2005. Variations take into account the full integration of Huta Warszawa on September 1st 2005, the divestment of rods and bars activities in Spain on July 31st 2005) and divestment of small tubes by Acindar in Argentina at the end of January 2006. Total shipments were 3.458 million tons, including 2.187 million tons in Europe, 1.201 million tons in Americas and 70,000 tons of drawn wire as compared to 2.989 million tons in Q1 of 2005.
For stainless steel and alloys operations total revenues for the first quarter 2006 were Euro 1.406 billion as compared to 981 million in 2005 which do not include Acesita. The first quarter of 2006 was characterized by a positive impact of volume and mix while base prices even if one notes an improvement in Europe going forward, remain low compared to the same period last year. Shipments were of 603,000 tons including Acesita for 169,000 tons as compared to 578,000 tons for the same period last year on a comparable basis.
For specialty plates business at Industeel revenue was Euro 274 million for the first quarter 2006 as compared to Euro 243 million for the equivalent period last year. A3S, Arcelor Steel Solutions & Services revenues for the first quarter of 2006 amounted to Euro 2.225 billion as compared to 2.056 billion for Q1 of 2005.
Mr Joseph Kinsch, Chairman of the Board of directors, said This result achieved while the company is the target of a take over attempt is the best proof of the commitment of all of Arcelors 110000 employees to create value for our shareholders and to build the long term future of Arcelor.
Arcelor CEO Mr Guy Dollsaid This solid performance compared to last years exceptional quarter demonstrates the ability of Arcelor to perform well in a context of massive materials cost increases and lower spot prices. The acquisition of Canadian steelmaker Dofasco and the agreements to take significant stakes in Chinese steel producer Laiwu and in Moroccan construction steel specialist Sonasid, all in this quarter illustrate well our external growth strategy. These moves as well as organic growth initiatives such as the 50% increase of our slab production capacity in Brazil that will come on stream this year contribute to strengthen our global industry leadership position.
Mittal Steel's Q1 profit drops by 35%
Mittal Steel posted a 35% drop in first quarter profit. Net income fell to $743 million from $1.15 billion a year earlier. Sales rose to $8.43 billion from $6.42 billion a year earlier. Total steel shipments rose to 15.6 million tons from 13.6 million in the fourth quarter and 10.4 million a year ago after which several acquisitions have been done.
Mr LN Mittal said "We are pleased to report a good performance this quarter, despite bottom cycle market conditions in Africa and Asia. This performance has been underpinned by over 50% QOQ growth in operating income of our American and European businesses.
He added that "We expect the market recovery to continue in the second and third quarter of 2006, supported by improvements in the Asian market. Mittal Steel is well placed to capitalize on this trend, which should generate further earnings momentum. We anticipate that the improvements in market conditions will drive significant growth in operating income in the second quarter and this momentum can be expected to continue into the third quarter.
ThyssenKrupp increase pre tax income in first half
ThyssenKrupp remained on growth track in the 1st half 2005-2006. Sales improved by 10% to Euro 22.7 billion compared with the first half of the prior year. The Group's pre-tax income from continuing operations increased to Euro 1.2 billion from Euro 978 million in the prior year period.
Sales rose by 11% to Euro 11.8 billion and in the first half to Euro 22.7 billion as against prior years Euro 20.7 billion. EBITDA increased by Euro 315 million to Euro 1,278 million and from Euro 2 billion in the 1st half of 2004-2005 to Euro 2.2 billion in the 1st half of the current fiscal year.
Dr Ekkehard Schulz, Executive Board Chairman of ThyssenKrupp AG said "Based on the very good 1st-half performance, for the full year we are already aiming to exceed our new medium-term target for earnings before taxes excluding major nonrecurring effects of Euro 2 billion." He added "We expect the generally positive business performance to continue in the further course of the year. For fiscal year 2005-2006, we currently plan sales of over Euro 44 billion."
US authorities give conditional go ahead to Mittal Steel on offer for Arcelor
The Department of Justice today announced that it has reached an agreement with Mittal Steel regarding its offer to acquire Arcelor SA. The agreement would resolve possible antitrust concerns in the event that the Antitrust Division concludes the combination of Mittal and Arcelor raises anticompetitive concerns.
Under the agreement, the Department will continue to investigate the competitive implications of the combination of Mittal Steel and Arcelor. The agreement requires Mittal Steel to divest Dofasco Inc, currently owned by Arcelor, to ThyssenKrupp AG in the event the Department determines the combination of Mittal Steel and Arcelor is likely to result in a substantial lessening of competition. If Mittal acquires Arcelor but is unable to divest Dofasco, the agreement requires Mittal to divest certain alternative assets to a buyer acceptable to the Department.
The Department has determined that the divestiture of either Dofasco or the alternative assets would address the potential competitive problem identified by the Department. This agreement enables the Department to complete its investigation and, if necessary, to implement an adequate remedy while Mittal Steels tender offer proceeds.
The Hart Scott Rodino Act imposes notification and waiting period requirements on parties to transactions that exceed certain thresholds. The HSR waiting period enables the Department to investigate transactions before they are consummated so that the Department may seek to modify or block deals that it concludes are anticompetitive before they close and competition is harmed. In appropriate circumstances, the Department may allow the waiting period to expire before it has concluded its investigation, if it reaches an agreement with the parties that ensures an adequate remedy will be implemented if the Department ultimately determines that one is necessary.
SA finally adopts law abolishing steel import duty
South Africa has finally scrapped 5% duty on steel imports, nearly six weeks after announcing it. Mr Tshediso Matona acting director general of the trade and industry department, told reporters in Cape Town "The minister has signed into law the removal of the 5% duty on steel."
Trade and Industry Minister Mandisi Mpahlwa on March 29 said the import duty on some primary carbon and stainless steel products would be scrapped immediately as a move to reduce landed price of steel to overcome issues of import parity pricing.
Ukraine taking a tough stand with Mittal Steel Kryviy Rih
Prime Tass has reported an announcement from Ukrainian State Property Fund that it may demand to abrogate the Kryvorizhstal sale treaty if Mittal Steel Kryviy Rih fails to keep investment commitments citing USPF chief Ms Valentina Semenyuk. She said that the privatization agency would consider filing a suit to the international arbitration court if it did not receive a response from Mittal by a June 6 deadline. She said the fund, having completed a review on May 5, was not satisfied that Mittal Steel had met its contractual and investment obligations. She said the fund had demanded Mittal Steel raise wages to a legal minimum and pay annual bonuses to employees based on 2005 results.
Ms Valentina Semenyuk is reported to have said that If the steel mills owners fail to change the situation at the enterprise for the better by June 6, the property fund will keep selling Krivorozhstal as many times as may prove necessary, until the owners begin to honor their investment liabilities.
The state property fund early this month said it might take Mittal Steel Kryviy Rih to court for failing to comply with the terms of the purchase contract. The decision followed an inquiry that highlighted a number of abuses. As per USPF, the new owner keeps refusing to adhere to a number of privatization terms, including those concerning the remuneration of employees.
It is reported that Mittal Steel and the trade union of the enterprise have inked the protocol on disputes related to the rise of salary. Mr Frank Pannier GM of Mittal Steel said that it intends to settle vexed question of workers salary with USPF before mid July. He noted that there is some difference between Mittals and USPFs interpretations of this issue. Mr Pannier mentioned The matter is that we regards the rise of salary related to the cost of living is a one-time action which had to be done right after the bargain and we did it. According to our interpretation of the agreement, there are no obligations to do it in the future.
Fortescue & Consolidated JV to start study at Mindy Mindy iron ore deposits
Fortescue Metals Group and JV partner Consolidated Minerals have begun considering a small scale iron ore mining operation in Western Australia's Pilbara region. The Mindy Mindy project could host a 5 million tonne a year iron ore mine and would use Fortescue's proposed infrastructure for its $2 billion Pilbara project.
Fortescue will run the study using the same team as for its Pilbara project, with Consolidated taking the reins once the study is finished in the first half of next year.
Mindy Mindy has a resource of 44.8 kilometers grading 55.2 per cent iron, based on one-third of the deposit. Within the resource there is a higher grade component, running at around 57.1%, which will be the initial focus of the study.
Mr Rod Baxter MD of Consolidated said "From Consolidated's perspective, this represents an attractive opportunity to accelerate development of a new five million tonne per annum iron ore business in the Pilbara. The development of Mindy Mindy will form part of a broader development strategy for stranded iron ore resources in the Pilbara which are expected to lead to the establishment of a substantial new force in the Australian iron ore industry."
Consolidated produces chromite and manganese from its WA operations while Fortescue is primarily focused on developing its 45 million tonnes a year iron ore mine in the Pilbara.
ThyssenKrupp board gives green light for Brazilian steel mill
The Supervisory Board of ThyssenKrupp AG today approved the project to build a steel mill in Sepetiba in the Brazilian state of Rio de Janeiro. The plant, which will be operated by CSA Companhia Siderrgica do Atlantico, is scheduled to start production in early 2009. The investment budget of $2.4 billion for the modified Brazilian steel mill project was approved by the Supervisory Board.
As planned CVRD will take a 10% stake in CSA Companhia Siderrgica do Atlantico.
Dr Ekkehard Schulz chairman of the executive board of ThyssenKrupp AG said "We are pleased to have received the go ahead for this key element of our integrated growth strategy in the Steel segment. The supply of low cost, high quality slabs from Brazil will allow us to harness growth opportunities in our core European market and in the NAFTA region. Our objective is to position ourselves globally in the market for high quality flat carbon steel."
Acesita Q1 profits decline by 28.9%
Brazilian specialty steelmaker Acesita has reported a net profit of 126 million reais ($60 million) in the first quarter of 2006 down by 28.9% from 177million reais YOY. Net revenue in 1Q06 totaled 696 million reais, a 23.6% decrease compared to 912 million reais in the same period of last year. EBIDTA in the 2006 period fell 45.8% to 160 million reais compared to 294 million reais in 1Q05. Sales volume in the first three months of this year declined by 4% to 180,300 tonnes compared to 187,700 tonnes YOY.
Acesita said that result reflects a continuous effort to fine tune the company's production and sales mix, coupled with an increase in stainless and silicon steel prices. Acesitas export revenues declined when converted into reais due to the currency appreciation against the US dollar.
Acesita CEO Mr Jean Philippe AndrDema said "The outlook for the market over the next few months is quite bright, based on an improvement in the apparent consumption of and base prices for stainless steel. This recovery should continue through the second quarter of the year, but the prospects for the medium term are uncertain."
Arcelor holds a 55.7% stake in Belo Horizonte based Acesita, which has capacity to produce 900,000 tonnes per year of liquid steel.
CITIC to sell 50% Australian iron ore stake to Wuhan for $100 million
It is reported that Mr Larry Yung Chi-kins CITIC Pacific is negotiating to sell a 50% stake in its planned iron ore project in Australia to state owned Wuhan Iron & Steel Group for about $100 million. Mr Yung said "CITIC Pacific is talking to transfer half of its stake in the project to Wuhan Iron & Steel Group for the same price level it paid for the original deal. I hope the talks can be finalized this month or in June."
CITIC had agreed to pay $215 million for the rights to mine one billion tonnes of magnetite ore from Western Australia's Pilbara region in March.
Wuhan Iron & Steel Group is China's third largest steelmaker and is the parent company of Wuhan Iron & Steel Co.
Kosovo's Ferronikeli to restart by the year end
International Mining Resources, the new owners of the Ferronikeli mining and smelting complex in Kosovo, one of the largest in Europe, announced that limited production could begin within the year. Mr Kostas Lamnatos Ferronikeli's new GD said that he hoped to have one of the two production lines operational within the year, but wartime bomb damage and disrepair could force a delay. He said "The target is November, but we may face some problems and start in late December or January. The second production line is expected to become operational between three and six months after the first.
Ferronikeli, located in the run-down town of Glogovac in central Kosovo, was badly damaged in NATO's 1999 bombing campaign to drive out Serb forces accused of atrocities against the ethnic Albanian majority. Ferronikeli is estimated to have 13 million tonnes of nickel ore from its three open pit nickel laterite mines including one in the town of Kavadarci in neighboring Macedonia. It has two production smelters each capable of producing 5,000 tonnes of nickel per year.
Zurich based consortium of International Mining Resources, part of the Eurasian Natural Resources group and the Alferon management company signed a deal with the UN mission running Kosovo in November last year and paid Euro 30.5 million for Ferronikeli. But the deal only officially went through last month following lengthy negotiations on the electricity supply to the complex. Kosovo is still plagued by power restrictions. The sale represented the largest single private investment in Kosovo since the UN placed the province of two million people under international stewardship in 1999. The agreement obliges the new owner to create 1,000 jobs and invest 20 million euros in the first three years.
SA's Highveld sees lower H1 profits on vanadium
South Africa's Highveld Steel & Vanadium expects its first half headline earnings per share to fall between 60% to 70% from the year ago period mainly due to lower vanadium prices. It also said that basic earnings per share will drop by 65% to 75% from the year ago period to end June.
It attributed the difference between headline and basic EPS to the non recurring profit on the sale of the Columbus Stainless Ltd and Acerinox SA investments in 2005.
Mining group Anglo American owns a 79% stake in Highveld. Anglo is seeking to sell its stake in Hiveld as part of its restructuring program to focus the group on mining.
OMK to secure funds for Vyska Steel plant
Russian pipe major OMK announced that it would secure a credit line worth $545 million and a 200 million euro syndicated loan to fund building and installation works and to purchase supplies of Russian and foreign equipment for the plant to be built in the Nizhny Novgorod Region's Vyksa District.
Sberbank will offer a credit line for 10 years and MCC Capitalia Gruppo Bancario, Italy will provide a 200 million euro syndicated loan with maturity of 13 years and a 4.23% annual interest rate to finance supplies of metallurgical equipment produced by Italian company Danieli.
The Vyksa Steel Works, which has been under construction since June 2005, will produce high quality hot rolled stock for small and medium diameter steel pipes. The first stage of the works, with annual capacity of 1.2 million metric tons of pipes and $600 million worth of investment, will be commissioned in late 2007.
Slovenian Steel Group triples 2005 profit
The Slovenian Steel Group more than tripled its pre tax profit in 2005 YOY by reporting Euro 39.23 million. It also posted a 23% rise in sales revenues in the same period, which reached Euro 471.64 million in 2005.
Groups CEO Mr Tibor Simonka told that the positive trends continued in the first quarter of 2006, with net profit reaching Euro 6.26 million up by 2% over Q1 of 2005, while sales revenues increased by 14% to Euro 134.81 million in the same period.
Mittal Steel may not up cash in any revised Arcelor bid
Mittal Steel played down hopes on Friday that it might significantly increase the cash component of its offer for rival steel maker Arcelor, which has been rejected by the target company.
Mr Aditya Mittal CFO told reporters, reiterating comments made earlier this week, that "We would revise our offer if the transaction was recommended. That does not mean the structure of the transaction would change. If you look at the way the shares are trading people believed the share component of our offer is actually more valuable and interesting."
Mr Aditya Mittal also said Mittal Steel expected to open its offer for Arcelor next week, possibly in the early part, but we have been wrong before on the timing.
Argentina's Acindar posts higher first-quarter gain
Argentine steelmaker Acindar has reported that its quarterly earnings jumped to 222.8 million pesos ($72.7 million) from 152.5 million pesos a year earlier, mainly due to the sale of three plants in January. First quarter net sales rose by 13.7% to 649.4 million pesos, with domestic sales surging and exports falling.
The earnings came mainly from an operating profit of 198.5 million pesos, 158.4 million pesos of which originated from the sale of the pipes business. Tenaris and Siderar, both of which belong to Argentina's Techint conglomerate, finalized the purchase of Acindar's plants on January 31, 2006.
Controlled by Brazil's Belgo Mineira, Acindar provides building materials to the farm and construction sectors along with local industry. The company is Argentina's No 3 steelmaker and the market leader in rolled steel.
Nisshin sees metal costs up by $90 million in 2006-2007
Japanese stainless steel mill Nisshin Seiko has seen its purchase costs of zinc, nickel and molybdenum rise by Yen 10 billion ($90 million) in the current fiscal year April 2006 to March 2007. Out of the Yen 10 billion rise in metal purchase costs, Yen 6 billion is attributed to zinc and Yen 4 billion to nickel and molybdenum. Nisshin based their cost forecast on zinc at $3,000 PMT and nickel at $8 per lb, the monthly average prices in April 2006.
Material costs would also rise because of increased metal consumption as Nisshin Seiko expects increased stainless output in fiscal 2006. Nisshin Seiko forecasts stainless steel sales to increase by 13.8% to Yen 165 billion in fiscal 2006, but warned that profit levels may fall by 25% to Yen 12 billion.
In fiscal 2005, the company produced 590,000 mt of stainless steel.
Siemens VAI to supply 4 EAFs
The VAI Fuichs GmbH Legelshurt Germany, a company of the Siemens Group Industrial Solutions and Services, has received new contracts for supply of 4 EAFs totaling over Euro 50 million from steel producers in the UK, Saudi Arabia, Spain and Pakistan.
The long product steel producer Thamesteel Ltd Sheerness UK, a subsidiary of Saudi Arabia's Al-Tuwairqi Group, placed an order for the supply of a new 95 tonnes AC EAF, including scrap buckets, hot-gas line, electrics and automation systems. The furnace will replace the existing shaft type EAF.
Another Al-Tuwairqi Group long product steel producer National Iron and Steel Factory Dammam Saudi Arabia of signed a contract for the upgrading of the existing VAI Fuchs supplied 80 tonnes EAF to a 100 tonnes AC EAF, including the installation of the Refining Combined Burners system. With the RCB system the energy input into the EAF can be boosted for shorter tap to tap times. The upgraded EAF will be able to be charged with 100% DRI.
An order was received from the Arcelors Spain based steel producer Aceralia Perfiles Zaragoza SA for the installation of the fin type anode system and the RCB system in the company's 140 tonnes DC EAF. The patented fin type anode system offers the advantages of a longer anode lifetime and reduced maintenance requirements.
Together with the Italian I&S company VAI Pomini, VAI Fuchs supplies for the newly founded company Integrated Steel Mill Limited a new green-field 1 million tonnes melt shop near Karachi, Pakistan. The project includes the installation of the process equipment for a 90 tonnes Ultimate EAF, ladle furnace, vacuum oxygen degassing unit, de dusting equipment and a 6 strand billet caster for the production of pipe steel grades.
Mr Werner Auer MD of VAI Fuchs said The reasons for the awarding of the new contracts were the innovative solutions offered for improved operating efficiency in electric steelmaking.
Mittal Steel SA to cut 817 jobs
Mr Davinder Chugh CEO of Mittal Steel SA announced that company plans to cut 817 jobs through voluntary separate packages, at a cost of 159 million rand by the end of June. He added that 278 people had already left by the end of the first quarter of 2006 and the rest would depart by the end of the second quarter.
At the end of December 2005, the group employed 10,900 people, down from 12,000 at the end of December 2004. At the end of June 2001, erstwhile Iscor employed 14,500 people.
PGOK pellet sales down by 7.5% in 4 months
Ukraine's biggest producer of iron ore pellets Poltavsky GOK has reported reduction in shipments of pellets by 7.5% YOY in the first four months of 2006 to 2.53 million tonnes. Sales reduced to 692,300 tonnes in April as against 769,800 tonnes in March.
PGOK produced 2.45 million tonnes of pellets in the first four months of 2006. PGOK exports most of its pellets.
North American Stainless orders Parsytec inspection system
Parsytec AG, a supplier of surface inspection systems for strip products, has bagged an order from North American Stainless to provide a parsytec 5i infrastructure for its plant in Ghent, KY.
The aim is to extend its applications of the parsytec 5i software and develop additional applications for process optimization. The parsytec 5i platform makes it possible for customers to create individual surface quality yield management applications and integrates surface quality data with process data.
NAS has been using Parsytec surface-inspection systems since 1999, and is presently using it. Based on surface inspection data, NAS is using parsytec 5i for re-assigning blocked coils to alternative orders, and performing process analysis to detect root causes of certain defects and to determine preventive measures.
NAS is North Americas largest producer of stainless steel, and a subsidiary of Acerinox SA.
Union Pacific & BNSF announce rail line expansion
Union Pacific Railroad and BNSF Railway Co have announced plans to expand their jointly owned rail line in Wyoming's southern Powder River Basin coal fields. The railroads, which have been under fire for delays in delivering coal to power plants, will build more than 40 miles of third and fourth main line tracks. The project will cost about $100 million over the next two years. The improvements will enable the line to handle in excess of 400 million tons of coal per year.
The new project is in addition to the construction of 14 miles of a third main line track completed in spring 2005 and an additional 19 miles of the third main line under construction and scheduled to go into service later this month. Total cost of the 75-mile capacity expansion will be about $200 million, split between the line's two owners, Omaha-based Union Pacific and Fort Worth, Texas-based BNSF.
Dajin acquires Zinc prospects
Dajin Resources Corp has reported that the Company has entered into an option agreement to purchase a 100% interest in 15 contiguous mineral claims which cover 1,770 hectares of geological terrains that are prospective for zinc & lead deposits in the Ymir region in the Nelson Mining District of south eastern British Columbia. In addition, Dajin has staked 6 claims and purchased 1 Crown Grant totaling 1,754 hectares contiguous to the prospect. The aforementioned claims are on strike of the Badshot-Reeves Limestone which to the south hosts several important zinc-lead mines including the Reeves MacDonald, Jersey and HB. Dajin will be actively exploring all of these claim groups in 2006.
The Government of British Columbia's Minfile Website summary with Jackpot prospects reports reserves "at about 3,000,000 tonnes of 5% combined zinc-lead mineralization" The New Jersey Zinc Exploration Company (Canada) Ltd, that was a previous operator at the Jackpot, reported potential for an additional 10 million tons of mineralization at an unspecified grade.
NLMK included in MSCI Emerging Markets Index
Novolipetsk Steel has announced that its Global Depositary Shares are to be included in the Morgan Stanley Capital International Emerging Markets Index, effective 31 May, 2006. As a result, the pro forma weight of NLMK GDS in the index will increase to 0.12%. NLMK is the first Russian steelmaker to be added to MSCI Emerging Markets Index.
The decision by MSCI to include NLMKs GDSs in its Emerging Markets Index will provide the opportunity for equity participation to a wider range of international investors. The index is traditionally used by fund managers worldwide to measure stock performance in emerging markets and allocate assets accordingly.
Mr Anton Bazulev NLMKs spokesman said NLMKs inclusion in the index is expected to raise the Companys international profile and make its shares more attractive to a wider group of international portfolio managers.
Teck Cominco appointment Mr Peter Kukielski as EVP & COO
Mr Donald R Lindsay president and CEO of Teck Cominco Limited has announced that effective July 15, 2006, Mr Peter Kukielski will join Teck Cominco as Executive Vice President and Chief Operating Officer. Mr Kukielski will be responsible for all of Teck Cominco's mining and metallurgical operations across all commodities, marketing and sales, and project engineering and management. Mr. Kukielski was most recently EVP and COO at Falconbridge Ltd. Prior to joining Falconbridge, Mr Kukielski held senior engineering and project management positions with BHP Billiton and Fluor Corporation.
Mr. Lindsay said "I am delighted that Peter Kukielski is joining Teck Cominco. Peter brings a wealth of strategic, operations, project management as well as international experience to our company. I congratulate Peter on his appointment and welcome him to our executive management team."
Mr Lindsay also announced the retirement of Mr Michael P Lipkewich following 36 years of service with the company. Mr. Lipkewich has served as Senior Vice President, responsible for the company's mining operations and project development.
Teck Cominco is a diversified mining company, headquartered in Vancouver, Canada. The company is a world leader in the production of zinc and metallurgical coal and is also a significant producer of copper, gold and specialty metals.
Stelco appoints Mr Steve Douglas to board
Stelco's board of directors has appointed Mr Steve Douglas to the board, replacing Mr Peter Gordon who has resigned from the Stelco board in order to focus on other Brookfield initiatives.
Mr Steve is executive vice president and chief financial officer of Falconbridge Limited. He brings a strong background in both finance and the resource industry to the board.
Nucor board approve stock split
Nucor Corp board has also approved a two-for-one stock split. The stock split will be effected by issuing one additional share of common stock for each share held by shareholders of record on May 19. The additional shares will be distributed on or about May 31.
Nucor says the stock split is intended to broaden interest in Nucor's common stock and improve its marketability.
Charlotte based Nucor and affiliates are manufacturers of steel products, with operating facilities in 17 states in US.
Hourly workers ratify deal with Keystone
Hourly workers at Bartonville based Keystone Steel & Wire Co have ratified a new three year contract. Members of the Independent Steelworkers Alliance voted 353-324 to approve the contract, which is retroactive to May 3. Among other provisions, the contract gives employees wage raises of up to 2.5% as well as less expensive health insurance for family coverage.
Some union members had expressed anger over provisions establishing a two-tiered wage system and higher insurance costs for individuals.
Union official Mr Keith Bowen told "We expected the vote to be close because of those issues, although we didn't expect it to be quite that close. I'm not sure we got the word out well enough about the positives for our members, but it was an excellent turnout and was pleased with the results."
Keystone Steel and Wire employs more than 1,000 workers in central Illinois.
