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| JANUARY 2006 | |
| From the CEO's Desk | |
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Steel prices continue to be depressed. Negative sentiment prevails in the states like Chattisgarh, Orissa, Jharkhand etc. and many sponge iron, induction furnace units are closed, few are operating in the night to save on electricity bills and some have already put ‘for sale’ banner on the gate. It was expected that the situation would improve after the rains are over by October but nothing of that sort has happened so far. Is this the effect of slow down in China ? Has the demand supply balance changed? Yes, I do agree that slow down in China has severely affected international steel trade. We all know that China was the force behind the growth of iron & steel industry and any change in the consumption pattern in that country is going to make a huge difference to global steel industry, positive so also negative. I would say that this is more true in case of flats (i.e. HR, CR and GPGC) than non flats. I do not think that the price of TMT bar manufactured by some re-roller in Chattisgarh, and the prospects of a sponge iron or an induction furnace unit situated in Jharkhand, are strongly linked with Chinese demand. When this mini sponge iron plants started coming up, the prices were quite attractive and many promoters have made lot of money. Now, since there are too many players, the prices have weakened. Infact, I feel that if one sees the overall picture, the demand curve has not advanced so much but the capacity and production has climbed up very fast. This reminds me of 1994 situation. Steel was de-controlled in 1992 and everybody, including financial institutions and ministry of steel thought that the steel demand would shoot up like a rocket. Many new steel companies came into existence that time and by the time we could realize, completely tilted the demand supply balance. The prices were at the rock bottom and most of the steel companies were bleeding. Financial institutions were very much scared about putting any further weight in steel sector. Are we heading towards similar situation ? Well, yes and no both !! If the steel demand does not rise substantially, we are sure to have a knock out but I feel that the situation is not all that bad. Demand is climbing up gradually (if not sharply) which should give some support to price curve. Further, vast reserves of iron ore, non coking coal (for SI units) and reasonably priced technical manpower place India in a comfortable position on global iron & steel matrix. It is said that the next decade would belong to metals sector. If this is true, who else other than Asia would make this happen ? D.A.Chandekar
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Jharkhand offers IISCO mines to Mittal Steel The proposed lease of the IISCO-owned iron ore mines in Chiria in West Singhbum district in Jharkhand to Mittal Steel could lead to a major confrontation with SAIL unless the two steelmakers agree on a deal. Chiria mines were captive mines of Indian Iron & Steel Company (IISCO) which had been mining the deposits quite extensively for many years now. Mittal Steel signed an agreement with the Jharkhand government recently for setting up a 10 million tonnes steel plant in West Singhbhum district. It sought 10,000 acres and 600 million tonnes of mineable iron ore deposit to feed its plant for the first 30 years with an additional 400 million tonnes to be mined over the next 20 years. Mineral Exploration Corporation Ltd (MCL) undertook the initial detailed exploration work in Chiria in 1970-72. It had divided the entire deposit into four blocks viz North Block, South Block, West-Central Block and East Central Block. The exploration of Chiria deposit was done by MCL in two phases. As a follow-up action on the agreement with the Jharkhand government, Mittal Steel recently sent a two-member delegation led by its newly appointed CEO in India, Sanak Mishra, to discuss the iron ore lease issue with the Jharkhand state chief minister, Arjun Munda, the state mines & geology minister Madhu Koda, chief secretary P P Sharma and mines secretary A K Singh. During discussions, the state government officials told the Mittal delegation that virgin mines in Chira, Gua, Jamda and Noamundi in West Singhbhum district had been identified for the Mittal Steel project. As the Chiria iron ore mines were in possession of IISCO, Mittal Steel officials asked the state government to allot some other iron ore reserves and precipitate a confrontation by allotting the Chiria mines which were at present under IISCO. |
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Galvanised steel firms hike prices On the back of increasing input costs, producers of galvanised steel announced a price hike ranging from Rs 1,000 a tonne to Rs 1,600 per tonne. JSW Steel was the first in the day to announce a Rs 1,000 hike. The company had last increased prices in October 2005 by Rs 500 a tonne. Uttam Galva also announced that it has hiked prices of its galvanised products by up to Rs 1,600 a tonne. A spokesperson of another manufacturer, Ispat, said the company has also decided to hike prices for the Maharashtra market by about Rs 1,000 a tonne. The price hike announced by the companies will take the average price of galvanised steel to about Rs 34,100 a tonne. Companies are pointing at increased input prices as one of the main reasons for the hike. The hike is owing to a further increase in input costs, primarily of zinc, in the international market was reported that price of zinc, an integral raw material used in the production of galvanised steel, had shot up by more than 85 per cent in a year - from Rs 43,605 per tonnes to Rs 81,585 per tonnes. Fuel prices have gone up by about 25 per cent and logistics costs by about 30 percent. Which is said as a major reason for the present price hike. |
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Tata Steel to ramp up Tiscon sales to Rs. 2000 cr Helped by capacity addition and a wide dealership network, Tata Steel’s long products premium brand Tata Tiscon is expected to touch Rs 2,000 crore sales in a little over three years. At present, Tata Tiscon has a turnover of Rs 1,500 crore and we expect it to grow at least by a compounded annual growth rate (CAGR) of seven per cent. Currently, Tata Steel’s long product business grosses about Rs 3,500 crore per year. A small mover when launched in 2000, Tata Tiscon has seen a turnaround in the last three years. In 2002, its turnover was about Rs 350 crore. The brand has a market share of about 10 per cent, which should increase to 30 per cent in five years. Tata Tiscon products are used in the construction industry. The brand caters to the residential and non-residential segments. The steel major has also targeted to touch the one million tonne sales mark for its long products next year. Currently, Tata Steel has a production capacity of about seven lakh tonne per annum of long products, which caters entirely to the domestic market. The total long-product capacity in the country is around 10 million bars. The steel major is also expanding the production capacity for long products from seven lakh tonne per year to 1.3 million tonne at its Jamshedpur plant. The plant will attain full capacity by FY07. |
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SAIL in talks with CIL for foreign coal mines Steel Authority of India Ltd (SAIL) is likely to form a joint venture with Coal India Ltd. (CIL) to develop domestic as well as overseas coking coal mines reports said. The chairman of SAIL, V S Jain, said SAIL had already held discussions with Coal India for joint development of coking coal mines. The two had identified three coking coal mines for development in Jharkhand. These were two mines at Monidi and one at Kapuria. Jain was in Kolkata recently to meet the CIL top brass to discuss joint development of coking coal mines. Jain pointed out that SAILwas eager to develop coking coal mines as most of the coking coal requirements of the steel major was being imported. Domestic coking coal represented around 40 per cent of the total coal used by SAIL. The ash content of Indian coking coal was high compared to imported coking coal. SAIL spent around Rs 4,000 crore on energy and the majority of that was on coking coal. Jain spoke to the CIL chairman about joint development of coking coal mines. SAIL was open to any arrangement for sourcing of coal. SAIL was looking at overseas mines in Australia, Poland and Russia. |
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Maheshwari group to invest Rs 11 cr in steel Amritsar-based Maheshwari group is putting up a steel plant at Manawala in Amritsar, with an initial investment of around Rs 11 crore. The unit, expected to start operations in the first week of February, will be a greenfield project, having an annual production capacity of 36,000 tonnes of special steel profiles and special sections, primarily for the export and exporting industries. The machinery for the new unit will be indigenous. The group has two units engaged in manufacturing TMT bars and special steel wires. The TMT bar unit, Parvati Profiles, has a production capacity of 16,000 tonnes of TMT bars per annum. The other unit, Beas Wires and Nails, manufactures special steel wires and products like shoetacks, flat switch wire, reed wire, health wire. It is also engaged in manufacturing special wire sections like half round, triangular and rectangular (hollow). The unit produces over 2,500 metric tonnes of wire per annum in various qualities including Hard Bright, Half Hard Bright, fully annealed and galvanised wires. Spokesperson for the company, said, “Once the unit is operational, it will offer employment potential for about 250 people. We will be exporting steel profiles and sections to the Middle East and Europe”. The company is targeting to achieve a turnover of Rs 100 crores in next fiscal from this upcoming unit. The company had planned to go for captive power generation in near future, according to him. Besides international markets, would like to cater for the needs of the domestic market by supplying products to profiles and hand tool industries. Promoters of the company have tremendous experience in this field, and are already associated with a similar project in Andhra Pradesh. |
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Tata Metaliks sales up on Usha Ispat unit buyout Tata Metaliks Ltd reported sharply higher pig iron sales in both value and volume terms following its recent buyout of Usha Ispat unit at Redi. The existing operations at Kharagpur and the full commissioning of the Redi plant would make Tata Metaliks the largest foundry grade pig iron manufacturer in the world. The Redi unit would add approximately Rs 350-400 crore to the topline of the company in one year of operations. The company produced 80,341 tonne hot metal in October-December (third quarter), compared with 78,771 tonne in the July-September quarter this financial year — an increase of 1.99 per cent. During the quarter, sales soared to Rs 130.24 crore (Rs 82.92 crore in the year ago quarter), an increase of 56.07 per cent. Meanwhile, volume wise net sales rose to 67,028 tonne from 42,524 tonne in the previous quarter. The company recorded gross turnover of Rs 343.27 crore in the nine-month period ending December 31. Tata Metaliks had recently acquired the movable and immovable assets of Usha Ispat’s Redi unit (Maharashtra). It was declared the highest bidder at the bids invited and finalised by the Stressed Assets Stabilisation Fund (SASF). With the increased production capacity from the three furnaces of Usha Ispat, Tata Metaliks has enhanced its annual production capacity to 650,000 tonne of pig iron. Tata Metaliks bought the Redi unit for Rs 115 crore. |
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United Gulf Steel launches tower fabricators nited Gulf Steel, the leading and only manufacturer of medium section structural steel in the GCC region has recently developed the much sought after 150mm Equal Angles for the Transmission Tower fabricators in the region. In line with its strategy to offer the entire range of angles in sizes & steel grades as required by Transmission & Communication tower manufacturing industry and to improve customer satisfaction, United Gulf Steel has introduced this new product in the market. The 150 mm equal angles would be offered in a variety of ticknessess from 10 - 16 mm,tailor-made lengths & steel grades ( ASTM A36, ASTM A572 Gr50, BSEN S275 & S355 or equivalent) as per customer requirements. |
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Hadeed aims to produce 10 mtpy of steel by 2015 Saudi Iron & Steel Co (Hadeed) aims to become a 10 million tpy steelmaker within the next decade by developing its Jubail II project, possibly as a joint venture with local or international partners. Mr. Othman Mohammed Al Thawadi of Hadeed’s strategy department cited Steel consulting firm World Steel Dynamics prediction as justification for Hadeed’s expansion plans that Middle East steel consumption to reach 42 million tpy by 2015 from 25 million in 2003. The Jubail II project will be built in another part of Jubail Industrial City, and Hadeed is studying whether to do this in the form of a strategic alliance or joint venture. |
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Japanese Steel co wins Saudi order A group of six Japanese companies, including Nippon Steel Corp. and JFE Steel Corp., won a contract to supply steel pipes to Saudi Arabian Oil Co., people familiar with the matter said. The Tokyo-based companies may supply about 200,000 metric tons of pipes to carry oil products over five years from the end of 2005, said the people, who declined to be identified. The order is worth about 26 billion yen ($225 million). Saudi Aramco, the world’s biggest oil company by output, and rivals plan to increase production capacity to keep pace with rising global demand led by China. Japanese steelmakers are boosting production to meet demand for pipes to carry oil, oil products and chemicals. Nippon Steel spokesman Masato Suzuki declined to comment. A spokesman at JFE Steel, the steelmaking unit of JFE Holdings Inc., said the company is unable to comment on specific agreements. Nippon Steel, the world’s third-biggest steel producer, JFE and Sumitomo Metal Industries Ltd. will supply more than 70,000 tons of pipes in the first two years, the people said. Deliveries will start in the three months from Jan. 1, they said. Other Japanese companies in the group include Marubeni-Itochu Steel Inc., Metal One Corp. and Sumitomo Corp. State-owned Saudi Aramco will use the pipes at refinery and petrochemicals projects, the people said. The company is planning a $8.5 billion petrochemicals plant with Japan’s Sumitomo Chemical Co. at Rabigh on the Red Sea Coast. Dhahran-based Saudi Aramco on Nov. 24 said it signed 13 agreements for so-called line pipes, used to ship petroleum products. Saudi Arabian companies such as National Pipe Co., Arabian Pipes Co., Saudi Steel Pipes and Group Five were awarded the bulk of the contracts, Saudi Aramco said. Overseas companies with steel mills in Argentina, China, India, Europe and North America were contracted to supply specialized materials including large-bore seamless pipe, Saudi Aramco said. It didn’t name any of them. |
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Rajhi Steel to tender for rebar-wire rod mill Saudi re-roller Rajhi Steel will be tendering in the first half of this year for the supply of a planned 500,000 tpy rebar and wire rod combination mill and a 600,000 tpy direct reduced iron plant. The investments from the second phase of the group’s expansion, company representatives said on the sidelines of 9th Middle East Iron & Steel Conference held in Dubai. The 500,000 tpy switching mill will produce 300,000 tonnes of wire rod and 200,000 tonnes of rebar of dimension 5-16mm. Business development manager Ahmed Gad Alla did not want to predict a start date, but said discussions with suppliers would be conducted in the first half of 2006. The proposed DRI plant is also at a preparatory stage. “We are already receiving offers, so we may also decide on that in the first half of 2006,” said Gad Alla. The first phase of the expansion will be complete when a 300,000 tpy rebar mill in Jeddah begins operating at the end of January 2006, and an 850,000 tpy meltshop gets to work in the 3rd quarter of next year. The Jeddah rebar mill to be commissioned early next year will raise the group’s rolling capacity to 780,000 tpy. |
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ABC to fund USCO’s 90,000 tpy CR plant Bahrain-based United Stainless Steel Company (USCO) has signed a facility agreement with Arab Banking Corporation (ABC) as sole underwriter and mandated lead arranger for a $153 million senior debt facility. The facility will be used to part finance the construction of a 90,000 tons per year cold rolled stainless steel mill in Hidd, Bahrain. USCO was established in February 2005 and construction commenced in April 2005. Production is scheduled to start in April 2007. It will be the first company of its kind in Bahrain and the region, with the closest similar facilities being in Europe (Italy) and South Asia (India). USCO is one of the major industrial projects in the region, with an investment of more than $200 million. It is the third major investment in Bahrain by Gulf Investment Corporation (GIC). The other two investments are Gulf Industrial Investment Company (GIIC) and Al- Ezzel Independent Power and Water Plant. |
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South Nassak Company on expansion he company is planning to expand their production size range in the near future. N.S.Co is an Iranian Galvanized Coil producer located in Kahrizak ( Old Ghom - Tehran Road, 60Km of Shoorabad area) and is producing Galvanized Coil with a production capacity of 70KT/Y. Their current production ranges from 0.2 to 1.5 mm thickness and 1000 to 1250mm width but will be expanded soon. The mill started production four years ago and has supplied only to domestic stockists and local end-users, while base materials have been bought locally and imported from Middle East. |
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General Holding Company pumps in $700 mn on steel expansion Abu Dhabi-based General Holding Company, GHC, has approved a plan to augment production at its Emirates Iron and Steel Factory from 600,000 tons to two million tons per year at a total cost of $700 million (Dhs2.6 billion). The expansion will follow a development plan adding new production lines this year which will raise the factory’s production capacity by one and a half times,reporter said. According to well-informed sources, the factory achieved very good results in 2005 as its production touched around 600,000 tons although the original production capacity of the factory was estimated at 500,000 tons per year. The sources added that the total investments of the factory was estimated at Dhs600 million and were expected to double after the projected expansion plan had been implemented. The sources pointed out that the new expansion would allow the factory to be listed within the privatisation programme of the factories owned by the General Holding Company as an independent company without the need for it to be merged with other companies. |
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Tata Steel in $1.1bn Iranian deal Tata Steel will invest $1.1bn to $1.2bn (£0.61bn-£0.66bn) in building three steel plants in Iran and developing iron ore mines there. India’s Tata Steel plans to increase output to cater for growing demand from India, China and other parts of Asia. The deal was announced recently $22bn (£12bn) deal under which Iran will supply India with five million tonnes of gas a year. The deals highlight the two countries’ growing dependence on each other. India produces only half the natural gas it needs and imports 70% of the oil it requires, currently at very high cost. The steel agreement also makes sense for Tata Steel, part of India’s giant Tata group, as it expects to see a sharp rise in demand as its government has promised to spend $15bn on huge infrastructure building projects. The firm has said it intends to raise its total steel production to 15 million tonnes by 2010, nearly four times its current capacity. Iran is likely to welcome the cash on offer from the Indian investors, as political risk has made many investors unwilling to do business there. Under the terms of the deal, Tata Steel will develop iron-ore mines, currently controlled by Iranian Mines and Mining Industries Development and Renovation Organization (Imidro), a government-aided company. Each company will own a 49% stake of their joint ventures, with an Iranian pension fund owning the rest. The Iranian mines are thought to have reserves of two to three billion tonnes of iron ore. Tata and Imidro will build a 1.5 million tonnes a year steel-slab plant and a 1.5 million tonnes a year billets plan, as well as an export-oriented steel plant. The first steel plant to be completed will come on stream in April 2008. |
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Ukraine 2005 steel output nearly flat on year Ukraine produced 38.636 million metric tonnes of steel in 2005, a fall of 0.2% on the year, the Industrial Policy Ministry said. The largest steel producer was the Krivorozh smelter, whose output fell by 2.4% on the year to 6.995 million tonnes. The Mariupol smelter increased steel output by 0.9% to 6.95 million tonnes. Azovstal produced 5.906 million tonnes, 3.4% more than in 2004. Zaporozhstal’s steel output fell by 1.8% to 4.379 million tonnes. Ukraine’s iron output in 2005 fell by 1% to 30.773 million tonnes. The largest iron producer, Krivorozhstal reduced iron output by 2.9% to 6.159 million tonnes. Mariupol increased iron output by 1.1% to 5.239 million tonnes. Azovstal’s iron output increased by 3.1% to 4.944 million tonnes, and Zaporozhstal produced 3.541 million tonnes of iron, 5.5% more than in 2004. Ukraine’s steel roll output in 2005 increased by 0.5% on the year to 32.183 million tonnes. The largest steel roll producer was Krivorozhstal, producing 6.044 million tonnes, a fall of 1.8% on the year. Mariupol produced 5.537 million tonnes of steel roll, an increase of 3.1% on the year. Azovstal increased steel roll output by 2.1% to 5.26 million tonnes, and Zaporozhstal reduced its steel roll output by 2.7% to 3.603 million tonnes. |
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Backed by a continuing tight market, Australian iron ore majors Rio Tinto and BHP Billiton are expected to press for a significant hike in contract prices when they resume annual price talks with Japanese steel mills in Tokyo. But the most important meeting in Tokyo will be that between the mills and world’s largest producer, Brazil’s CVRD, the acknowledged price setter among the producers and which has so far taken an aggressive stance. The Brazilians are rumoured to have sought a rise of as much as 40 per cent in initial negotiations to compensate it for a sharp rise in Brazil’s currency, the real. But in the wake of last year’s 71.5 per cent rise and recent declines in steel prices, the market is forecasting a more moderate increase of up to 20 per cent. BHP and Rio are likely to give CVRD the running, although secretly they may have been prepared to cut the mills some slack if only to discourage the rising number of new entrants in Australia that are increasingly snapping at their heels. BHP is again expected to highlight the freight cost advantage of Australian iron ore over Brazil, but it isn’t clear whether it is prepared to press for a compensating freight premium as it unsuccessfully did last year. BHP’s stance last year was roundly condemned by the Chinese and Japanese mills. However, the prospects of a settlement in the short term appear remote. When talks broke up in December, the Japan-based Tex Report noted that little common ground had been reached. recently, China’s Xinhua news service reported that there had been little progress in talks between its lead negotiator, Baosteel, and the miners. |
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Morgan commissions first mill in Taiwan Morgan Construction Company, together with business partner Badische Stahl Engineering [BSE], has successfully commissioned the first mill to implement their multi-strand silt rolling technology. The new is stand mill in Taiwan is designed to produce rebars from 10 to 32 mm in diameter , with 10 & 13 mm production utilizing 4-strand slitting and 16mm utilizing 2-strand silting . Morgan provided the pass design for the mills entire product mix while mechanical equipment supply included guide equipment, multi-strand up loppers and converging troughs for the slit-rolled products. Morgan Construction Company is a designer and producer of high quality rolling mill products and services for the metal industry worldwide. |
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Severstal 2005 steel output up 3.5% Russian steelmaker OAO Severstal said it had achieved its target of increasing its 2005 steel output by 3.5% to around 10.8 million metric tons. The company also said rolled-steel production grew 5.8% to more than 9.8 million tons, while coke output edged up 0.1%, iron ore concentrate output increased 1.9% and cast iron output rose 0.7%. Severstal said the increases were thanks to the implementation of new technologies, optimization of repair work and a significant amount of investment. |
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Posco outlines $11.7 bn plan for expansion Posco, the world’s fifth- largest steelmaker, recently said it would invest $11.7 billion over the next three years to expand capacity, despite growing concerns about falling steel prices. The aggressive investment plan came after the South Korean steelmaker reported a worse-than-expected 68 per cent drop in fourth-quarter profit, due to over-capacity as Chinese steelmakers boost production. Net profit at Posco fell to Won382 billion ($388 million) in the October-December period, while full-year profit rose nearly 5 per cent to Won4,013 billion. The company, which sells more than 70 per cent of its output at home, is targeting sales of $19 billion-$20 billion in 2006, compared with last year’s $21.7 billion. The company said it was raising this year’s investment by 5.4 per cent to $3.9 billion. “The industry is likely to see conditions modestly turn around in the second half at the earliest or next year at the latest,” said Lee Ku-taek, the company’s chairman. But analysts expect steel prices to fall further this year, following an estimated 35 per cent fall last year, and questioned the effectiveness of Posco’s investment plans. Global steelmakers are facing a deteriorating outlook, pressured by lower steel prices and higher raw material costs. |
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Azerbaijan’s largest steel producer halts operations Baku Steel Company, a U.K.-registered steel producer with key assets in Azerbaijan, has halted operations due to a lack of scrap metal supplies. It needs a total of 350,000 metric tons of scrap a year. BSC’s lack of crap supplies is due to Azerbaijan’s state oil and gas company Socar and the country’s power grid monopoly Azerenergo reducing their scrap sales to the company. Azerbaijan’s Economic Development Minister Geidar Babayev said that the government would help resume operations at BSC. He did not elaborate. BSC is the largest steel producer in Azerbaijan. BSC’s President Paolo Parviz holds 98% in the company. |
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Japans December crude steel output down 5.0% on year Japan’s production of crude steel fell 5.0% on year in December to 9.09 million tons, declining for the sixth straight month, the Japan Iron and Steel Federation said. That figure also reflects a 0.6% fall from the previous month, the industry group said. Of the total, production by converters fell 7.8% on year to 6.63 million tons and that by electric furnaces increased 3.5% on year to 2.47 million tons, the group said. Production of ordinary steel fell 5.7% on year to 7.07 million tons, while specialty steel output fell 2.2% on year to 2.02 million tons, the group said. |
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ThyssenKrupp Steel construction arm in profit Steel company ThyssenKrupp said its construction element operations returned to profit in the fiscal year ending September 2005. The building construction unit returned to profit in a difficult market following losses in the preceding years, the company said. The cold room construction unit also returned a significantly higher profit than the previous year. Both units expect this positive trend to continue in the current fiscal year, the company added. With construction spending in Germany and Western Europe in decline for years, the turnaround is the result of a radical reorganization of the construction elements group at ThyssenKrupp Steel. The building and cold room construction businesses were split and allocated to separate, clearly focused units. Unprofitable locations were closed, leading to improved capacity utilization at the remaining facilities. The job cuts necessary as part of the restructuring were organized along socially compatible lines. In the area of building construction, the company exited the housing construction business, and last fiscal year Hoesch Contecna Systembau GmbH, active in the design and installation of steel roof and wall cladding elements, was sold to Franzen Holding GmbH & Co. KG. The remaining building construction operations managed by ThyssenKrupp Hoesch Bausysteme GmbH generated sales of EUR161 million in fiscal 2004/2005, while cold room construction sales were EUR173 million. |
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Reliance Steel in $934M pact to buy Earle M. Jorgensen Reliance Steel & Aluminum Co. (RS) and Earle M. Jorgensen Co. (JOR) have entered an agreement for Reliance to acquire Earle M. Jorgensen for $13.00 per share in cash and stock, or about $934 million with the assumption of debt. In a joint press release recently, the metal companies said Earle M. Jorgensen holders will be paid 50% in Reliance stock and 50% in cash. Under the terms of the merger agreement, Earle M. Jorgensen holders will have the right to receive $6.50 in cash and a number of shares of Reliance common stock equal to $6.50, subject to a collar. Reliance Steel said the transaction would be immediately accretive to Reliance and is expected to be completed in the second quarter. Reliance Steel said it will assume about $291 million of Earle M. Jorgensen’s existing long-term debt, adjusted by any payments or borrowings made prior to the closing of the acquisition. The boards of both companies have unanimously approved the acquisition, which is still subject to the approval of Earle M. Jorgensen’s holders and customary closing conditions. |
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Outokumpu Steel deliveries fall 8% in 2005 Finnish steel company Outokumpu Oyj said stainless steel deliveries fell by 8% in 2005 compared with the previous year. This was mainly due to low demand as a result of strong de-stocking in Europe and roll-out of new capacity especially in China. Total deliveries were 1.647 million tons compared with 1.786 million tons in 2004. The order backlog of Outokumpu Technology increased to EUR596 million from EUR458 million last year as a result of continued firm investment activity in the mining and metals industry, the company sources said. |
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Mittal Steel’s Ukrainian smelter 2005 output down 2.4% The Ukrainian Krivorozhstal steel smelter produced 6.955 million metric tons of steel in 2005, a fall of 2.4% on the year, the company said. The smelter was acquired by Mittal Steel Co. NV (MT) in October and renamed Mittal Steel - Krivoi Rog. Steel roll output fell 1.8% to 6.044 million tons. Iron output fell 2.9% to 6.159 million tons. Coke output fell 3.6% to 2.661 tons. |
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Kazakhstan’s 2005 steel output down 17.1% Kazakhstan produced 4.452 million metric tons of steel in 2005, a fall of 17.1% on the year, according to figures released by the state statistics committee. The production of flat steel roll in 2005 fell by 20.9% to 3.195 million tons, following the declining demand on the world market. |
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JFE Steel to boost production of pipe for Oil Wells-Nikkei JFE Steel Corp. announced that it would increase production of oil well pipe, which is used chiefly to bring up natural gas from fields, reports said. The company will invest about Y10 billion and raise production capacity starting in January 2007 of its works in Handa, Aichi Prefecture, to an annual volume of 120,000 tons, up about 30% from the present capacity. JFE Steel, a unit of JFE Holdings Inc., is responding to an increase in the development of natural gas fields in China, Russia and elsewhere. JFE Steel will boost production of a type of seamless pipe. The pipe contains 13% chrome, which is higher than that of ordinary seamless pipe, and offers high resistance to corrosion. The company will increase production capacity by upgrading a portion of its equipment. The pipe, which is used to bring up oil and natural gas from the earth and transport it to pipelines, will be sold to oil and natural gas development companies worldwide. JFE Steel expects the 2008 world market for oil well pipe that contains 13% chrome to rise to 250,000 tons, a 25% increase over the 2005 forecast. |
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