Vale plans to invest $573 million in a steel rolling mill in Brazil. The company will set up the mill in Rio de Janeiro state.

According to a report, the mill will process steel from plate to sheet form and will be sited at a steel plant being built by Companhia Siderurgica do Atlantico (CSA), controlled by Germany's ThyssenKrupp. Vale has a 27 percent stake in it. As per report, the investment still needed the approval of Vale's board of governors.

The CSA plant, expected to open in the first half of 2010, will produce 5 million tons of steel slabs for export each year.

Vale has come under heavy political pressure from the government of President Luiz Inacio Lula da Silva to process more of the minerals it extracts at home to add value and create jobs, rather than exporting them in raw form.

The firm responded by announcing billions of dollars in new investments, quelling talk that Lula was seeking a management shake-up at the company

Steel production in Europe's largest economy- Germany- has increased in November following economic improvement in the country.

According to the Federal Statistical Office, German mills produced 2.49 million tons of pig iron, an 8.1 percent increase over November 2008. While raw steel production stood at 3.9 million tons, up 8 percent. Compared with October, production of pig iron was up 7 percent while raw steel was up 2.4 percent.

Despite the improvements, the impact of the recession over the past year remained evident. For the first 11 months of the year, pig iron production was 35 percent below the 2008 levels, while raw steel production was 32 percent lower.

Italy's steel industry, the second-biggest in Europe, will see a 40 percent fall in output next year versus 2009, the chairman of steel body Federacciai said.

"It will be a fall of about 40 percent on the 2009 level," Federacciai Chairman Giuseppe Pasini said, when asked for a forecast on 2010 output.

The global steel market, battered during the economic downturn, has begun to recover but could face excess capacity between now and 2012, the OECD said.

"The sharp contraction in global demand that began in the second half of 2008 is now tapering off," the Organisation for Economic Cooperation and Development said following a meeting of government officials and industry representatives from steel-producing economies.

It cited demand growth in emerging market powerhouses China and India in particular.

But it cautioned that the rebound could be slow and long in some countries, where it could take three to four years for steel consumption to return to pre-crisis levels.

In addition, steelmaking capacity -- despite the fall in demand -- has not adjusted and has even increased in some areas.

"Projections to 2012 suggest that global capacity may exceed demand by a a wide margin, raising concerns about the unwinding of excess capacity," the OECD warned.

In the longer term, according to the report, production increases are likely to come primarily in fast growing emerging market countries.

Steel Dynamics Inc., the third- largest U.S.-based steelmaker, projected fourth-quarter profit that was less than analysts' estimates. Per-share profit for the period will be 10 cents to 20 cents a share, Fort Wayne, Indiana-based Steel Dynamics said.

Steel Dynamics last quarter returned to profit after three straight quarterly losses as production and shipping volume of flat-rolled metal improved. The company in October projected lower earnings in the fourth quarter compared with the third because of seasonally lower shipments of flat-rolled steel.

Steel Dynamics' metals-recycling operations also had lower shipments and margin compression in the fourth quarter because of 'sharp declines' in prices, the company said. More recent orders for flat-rolled steel have been 'robust,' Chief Executive Officer Keith Busse said. Pricing has begun to move in a positive direction. U.S. Steel Corp. and Nucor Corp. are the largest U.S.-based steelmakers by 2008 sales.