Severstal, Russia's biggest steelmaker, said production at its mills was recovering from record low use of capacity at the start of the year as demand from domestic pipemakers and shipbuilders picks up.
Its biggest mill in Cherepovets resumed working at full capacity last month. Pipemakers have increased steel consumption in the second half to meet demand from the BTS-2 oil route and the gas pipeline between Sakhalin and the Pacific port of Vladivostok. Severstal's Russian pipe plants ran at half capacity in the first six months as steel prices collapsed and local and export demand slumped. The company has fired 9,500 staff to cut costs and help pay off debts, idled two U.S. plants, and said last month it would sell $499 million of bonds. In a developing economy such as Russia, construction and associated industries play a key role in incremental steel consumption. The steelmaker's most stable customers this year have been shipbuilders, with orders rising by 20 percent compared with 2008.
An increase in pipe orders in the second half would still leave orders from the pipemaking industry down 12 percent on last year. Machine-builders will order 42 percent less steel this year. Severstal, controlled by billionaire Alexei Mordashov, expects Russian prices for raw materials, for iron ore and coal, to rise by the end of the year. Russia accounted for 45 percent of Severstal's revenue last year, with North America the company's second-largest market. The company is working to certify more of its products with Hyundai Motor Co. of South Korea.

The U.S. steel sector will benefit from improving global economic activity and restocking even as lower Chinese steel and scrap prices pose a risk in the coming month, Deutsche Bank said. The brokerage upgraded AK Steel Holding Corp to “buy” from "hold", and said the steelmaker is an attractive acquisition candidate. Analyst David Martin said he is positive on the medium-term outlook and valuation for U.S. steel companies, and lower raw material costs outlook and the weakness of the U.S. dollar should support industry margins. The analyst raised his price targets on three steel stocks, including U.S. Steel Corp, and said he expects steel consumption to grow 8 percent globally and 15 percent in North America during 2010.
Martin upgraded AK Steel, citing its recent share price weakness, and raised his forecasts for the company to partially reflect a more positive outlook for its specialty businesses.

Anglo American Plc may sell part of its Minas Rio project in Brazil to finance further expansion of the iron ore mine.
According to a report, James Wyatt-Tilby spokesman said, “Anglo will start output at Minas-Rio in the Q2 of 2012 with a capacity of 26.5 million tons of the steelmaking ingredient.” He said, “We will look at the possibility of introducing an investor into the project as we develop our plans for phase two and three. There's no date set yet for these phases.”
He also added that each of the three phases will have an annual production capacity of 26.5 million tons. Another report also quoted that Chinese groups are among potential investors in Minas-Rio, citing Cynthia Carroll CEO of Anglo. Wyatt-Tilby declined to confirm any talks with Chinese companies.
A Brazil-based spokeswoman for Anglo said Minas-Rio was originally slated to start production in 2010. She said that the project was postponed until late 2011 because of delays in gaining an environmental permit. Further delays arose on difficulties in gaining landowners' permission to build a 525 kilometer pipe to carry the ore in slurry form from the mine in Minas Gerais state to the Atlantic coast in Rio de Janeiro for export. The spokeswoman said, “The Company is still negotiating with landowners. Brazil's development bank BNDES granted a 2.3 billion real loan in October 2008 to build the pipe.

Vale SA signed an agreement with ThyssenKrupp Steel AG to increase its stake in ThyssenKrupp CSA Siderúrgica do Atlântico Ltda to 26.87 percent, from its current 10 percent interest, through a capital infusion of EUR 965 million.
CSA is building an integrated steel slab plant, with nominal capacity of five million metric tons of slab per year, in the state of Rio de Janeiro, Brazil. The current expected start-up is the first half of 2010. As a strategic partner of ThyssenKrupp, Vale is the sole and exclusive supplier of iron ore to CSA.
According to a report the company said, “Through this additional capital contribution, Vale confirms its engagement in the largest industrial investment under construction in Brazil in the last ten years and the first large steel mill to be built in the country since the mid-eighties, providing a strong support to the project completion.

Ameron International Corporation, 50 percemt owner of Southern California mini mill rebar producer TAMCO, reported a drop in third quarter profits, which the firm says was largely due to the significant decline in demand for steel rebar in the western US.
Net income of Ameron International Corporation fell to USD 5.9 million as compared to USD 15 million earned in the third quarter of 2008. Sales were down by 23 percent YoY.
James Marlen chairman of Ameron International Corporation said,"The earnings decline in the quarter can be attributed equally to the decline in core businesses and to the challenging market conditions experienced by TAMCO. While TAMCO's quarterly net loss was lower than earlier in 2009, the year over year decline was significant."
Ameron said in a release that demand for steel rebar in TAMCO's key markets in the western US is not expected to recover in the short term, adding that the business has not experienced any increase in demand associated with the federal economic stimulus package or had any indications of higher state and local governmental spending on infrastructure projects. In addition, commercial construction remains at the lowest level in years.

European Union's steel exports stood at 2.03 million tons in June 2009, down by 1.5 percent YoY, but up by 6.3 percent MoM.
The total exports from January to June 2009 period hit 10.73 million tons, down by 14 percent YoY.
Among the export, long product exports reached 819,000 tons, the total in last 6 months hit 4.7 million tons, for flat products, the export reached 1.21 million tons and the total exports in the last half year stood at 6.02 million tons.
In the same month, EU's steel imports reached 939,000 tons and the import in the last half year hit 6.75 million tons.

Merafe Resources Ltd., a producer of ferrochrome in a South African joint venture with Xstrata Plc, said European ferrochrome prices rose 16 percent this quarter. The benchmark price for the stainless steel raw material was set at $1.03 a pound, up from $0.89 a pound in the third quarter, the company said in a statement. Merafe's venture with Xstrata, the world's largest ferrochrome producer, last month said it increased production to 85 percent of capacity in response to strengthening demand. The second-biggest maker, Samancor Chrome Ltd., has restarted some of its operations after halting all production last year.