| Price Index - India | | | | 28-Jan | 27-Jan | Change | | ILPPI | 6691 | 6719 | -28 | | IFPPI | 6656 | 6656 | 0 | | INDSPI | 6674 | 6689 | -15 | | What is it? | | Currency | | AUD | 1.4993 | | BRL | 2.2991 | | CAD | 1.2203 | | CNY | 6.8297 | | EUR | 0.7556 | | GBP | 0.7016 | | INR | 49.0099 | | JPY | 89.3694 | | RUB | 33.5111 | | USD | 1.0000 | | ZAR | 9.9363 | | View Current Currency | | Metal Rates Cash Seller & Settlement | | Zn | USD 1120 | | | Ni | USD 11650 | | | Sn | USD 11450 | | | Al | USD 1331 | | | Cu | USD 3292 | | | View Current Metal Rates | | Steel Futures | | NCDEX | 23900 (19-Dec) | INR | 0 |  | | DGCX | 480 (27-Jan) | USD | 0 | | | LME-M | 315 (27-Jan) | USD | -5 |  | | LME-F | 295 (27-Jan) | USD | -5 | | | NCDEX :
NCDEX Mild Steel Ingot Future Closing Price DGCX :
Dubai Steel Rebar Futures Closing Prices LME-M :
LME Steel Billet Future Buyer Prices (Mediterranean) LME-F :
LME Steel Billet Future Buyer Prices
(Far East) | | | | Others
TATA Steel Q3 net dips by 56% YoY - 29 Jan 2009 TATA Steel Ltd has announced the following Audited results for the quarter ended December 31st 2008:
The Company has posted a net profit of INR 4662.4 million for the quarter ended December 31st 2008 as compared to INR 10685.8 million for the quarter ended December 31st 2007.
Its total Income has decreased from INR 50209.7 million for the quarter ended December 31st 2007 to INR 48106.3 million for the quarter ended December 31st 2008.
TATA Steel reported a drop for the first time in almost three years.
Lull in the Indian domestic steel market after long gap - 29 Jan 2009 The domestic Indian Steel price declined only marginally on January 28th 2009. The Indian Long Product Price Index (ILPPI) fell by 28 points whereas Indian Flat Product Price Index (IFPPI) remains unchanged .The overall Indian Steel Price Index (INDSPI) fell by mere 15 points:
| Class | 27-Jan | 28-Jan | Change
| | ILPPI | 6719 | 6691 | -28
| | IFPPI | 6656 | 6656 | 0
| | INDSPI | 6689 | 6674 | -15
| | | | |
ILPPI – Long Product Price Index
IFPPI – Flat Product Price Index
INDSPI – Indian Steel Price Index
| Category | 27-Jan | 28-Jan | Change
| | PI - TMT | 6527 | 6471 | -57
| | PI - WRC | 7117 | 7117 | 0
| | PI - Angle | 6372 | 6353 | -19
| | PI - Channel | 6413 | 6380 | -34
| | PI - Joist | 6202 | 6175 | -28
| | | | |
| Category | 27-Jan | 28-Jan | Change
| | PI - Narrow Plates | 6312 | 6312 | 0
| | PI - Wide Plates | 6798 | 6793 | -4
| | PI - Hot Rolled | 6455 | 6455 | 0
| | PI - Cold Rolled | 7246 | 7246 | 0
| | PI - Galvanized | 6910 | 6910 | 0
| | | | |
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(Sourced from www.steelprices-india.com)
Production pruning - Corus cuts production by 40% - 29 Jan 2009 PTI reported that amid drastic fall in demand in Europe for steel, TATA Steel today said it has slashed Corus' production by 40% from January 2009.
Mr Philippe Varin CEO of Corus told reporters that "Demand for steel in Europe is down by 40% YoY. Construction market is down by 50% and the auto market is down by 30% to 40%. Our order book is also down by more than 30%.”
Mr Varin added that “Corus had reduced its production by 20% from November 2008 but since the situation did not improve after that it resorted to further cuts in production.”
Mr Varin said that apart from reduction in production, Corus has taken a slew of measures, mainly to focus on the core areas and make the company more competitive which includes hiving off its two aluminium smelters located in Germany and the Netherlands and laying off 3,500 employees. He however added that "We have not yet finalized the deal, but are on advanced negotiations.”
(Sourced from PTI)
JSW update on Q3 performance - 29 Jan 2009 JSW reported flat sales in the Q3 when the world steel demand and prices fell significantly mainly due to change in the product mix as evidenced by a growth in volume of production and sale of value added steel products.
JSW in a statement said that their net sale of INR 2,785.53 crores for the quarter is almost at the same level as that of the corresponding quarter of previous year. The EBITDA before exceptional items is INR 433.48 Crores. Due to depreciation of rupee vis a vs US Dollar, the foreign exchange translation losses of INR 176.83 Crores has been charged as an exceptional item to P & L account for the quarter, compared to foreign exchange gain of INR 13.96 Crores for the corresponding quarter of previous year, resulting in a negative impact of INR 190.79 Crores over the corresponding quarter. As a result, the loss for the quarter, after exceptional items is INR 127.50 Crores.
The standalone Company Turnover, EBITDA before exceptional items and Net Profit for the nine month period ended December 31st 2008 was INR 11,659.46 Crores and INR 409.30 Crores respectively. The Company has reported consolidated turnover, EBITDA before exceptional items and net is of INR.3,538.70 Crores, INR 505.45 Crores and INR 187.83 Crores, respectively, for the quarter, after incorporating the financials of subsidiaries, joint ventures and associates.
| Q3 |
| | Net sales | 2786
| | Operating EBITDA | 433
| | Cash Profit | 200
| | FOREX losses | 177
| | Net loss | 128
| | |
(INR in crores)
| | Q3 FY’09 | Q3 FY’08 | Change
| | Crude Steel | 0.782 | 0.956 | -18%
| | Semis | 0.06 | 0.091 | -34%
| | HR Coils/Plates | 0.331 | 0.487 | -32%
| | Rolled: Long | 0.079 | 0.069 | 14%
| | Value added products | 0.241 | 0.22 | 9%
| | Total Saleable Steel | 0.711 | 0.867 | -18%
| | | | |
(In million tonne)
Mr Sajjan Jindal vice CMD of JSW said that "In spite of over 50% fall in sales realization compared to the peak levels, due to pro-active measures adapted by the Company in reducing the costs, not adding to the inventory and thrust in marketing value added products by leveraging the stable rural demand, the Company could achieve an operating EBITDA margin of 15.3%. The reported net loss of INR127.5 crores is mainly due to adverse movement of rupee exchange rate vis-a-vis US Dollar resulting in a foreign exchange translation loss of INR177 crores.”
The company has taken various strategic and operational Initiatives in Q3, listed below, to improve its efficiency to remain one of the lowest conversion cost producers in the world:
1. Maintaining the Inventory levels to arrest further value erosion;
2. Cutting production of the existing operational units and postponing the commissioning of the expansion Projects
3. Moderating the CAPEX program of the Company;
4. Increasing the production of Value Added Products, where the impact of down turn is less;
5. Aggressively cutting Cost of Production by 14% over Q2 '09
6. Shifting focus on input blend to bring down the cost to achieve better margins.
TATA Steel MD sees flat January to March quarter - 29 Jan 2009 PTI reported that Mr B Muthuraman MD of TATA Steel sees no chance of demand picking up in India in the immediate quarter.
Mr Muthuraman told that "In the immediate quarter, I see demand continuing to be weak in India, but there will be some positives than the October to December quarter.”
He also said that "Price will remain in the current level.”
He added that TATA Steel aims to produce close to 1.5 million tonne of steel in the January to March quarter.
(Sourced from PTI)
Macroeconomic indicators - RBI outlook for Indian economy mixed - 29 Jan 2009 PTI reported that there is evidence of a slowing down of economic activity and the outlook for India's economy going forward is mixed.
RBI in its Macro Economic and Monetary Developments Q3 Review 2008-09 said that with real GDP growth moderating in the H1 of 2008-09, industrial activity, particularly in the manufacturing and infrastructure sectors is decelerating.
The apex bank said that "The services sector too is slowing," adding that the slowdown is mainly in the construction, transport, communications, trade, hotels and restaurants sub sectors. It said that higher input costs and dampened demand have dented corporate margins while the uncertainty surrounding the crisis has affected business confidence.
The apex said that the major inputs of the construction sector cement and steel continued to record deceleration in growth in April to October 2008, adding that various leading indicators of services have also witnessed deceleration in growth during FY 2009 so far.
RBI said that "It may also be recognized that unlike in the advanced countries where the contagion spread from the financial to the real sector, in India, the slowdown in the real sector is affecting the financial sector, which in turn has a second order impact on the real sector."
It, however, further added that there are some positive factors expected to boost consumption demand, such as the debt waiver for farmers, 6th Pay Commission awards, pre-election expenditure and rise in basic exemption limits and tax slabs.
(Sourced from Press Trust of India)
TATA Steel to increase HR exports in Q4 - 29 Jan 2009 Bloomberg reported that Indian steel giant TATA Steel aims to revive fourth-quarter earnings by lowering fuel costs and increasing exports.
Mr B Muthuraman MD of TATA Steel, without giving numbers, told reporters that the company has renegotiated lower coking coal rates for this quarter.
The report cited Mr HM Nerurkar COO of TATA Steel as saying that TATA Steel plans to triple exports to 330,000 tonnes in the period as local demand wanes for hot rolled coils.
(Sourced from Bloomberg)
India Government must increase infra spending by 15% - CII - 29 Jan 2009 My Iris reported that Confederation of Indian Industry infrastructure outlook survey quoted the high interest rates and the credit crunch have delayed Infrastructure projects by 6 months and more. The CII survey added that 83% of the respondents expect government to increase its proposed spending on infrastructure by additional 15% or more to stimulate necessary demand in the economy.
As per report, of these, 32% of the respondents strongly feel that government’s additional spending on infrastructure must be more than 15% during the period January to June, 2009 to stimulate growth.
Mr Chandrajit Banerjee director general of CII said that “This additional government spending on roads and low cost housing will provide the much needed boost to domestic demand for sectors such as steel, cement and other industry sectors. Further, such projects are also large employment generators.”
The infrastructure companies surveyed suggested the following measures by the government to deal with the current situation emanating from global financial and economic crisis. About 84% of the CII survey respondents prioritized the following key measures by the government.
1. Lower interest rates for infrastructure projects, especially public private partnership infrastructure projects.
2. Create a special fund of USD 5 billion to USD 10 billion to create a crowding in effect for funding infrastructure projects.
3. Simplification of rules, regulations and procedures of according clearances for infrastructure projects.
4. Allow large private infrastructure companies to float tax free bonds.
5. Facilitate implementation of infrastructure by setting up a high power implementation and facilitation agency.
About 85% of the Infrastructure and related companies surveyed expressed concern over delay in financial closure of infrastructure projects implemented by them. Of these chief executive officers and operational heads who revealed their concerns, 50% of them said that delays in financial closures was up to 6 months and another 35% of them revealed that the delays were more than 6 months.
The CII survey said that cost overrun of infrastructure companies under implementation, as reported by 82% of the respondents, was 5% or more. About 32% of them revealed that project costs has gone up by 10-15% and another 18% of them revealed that project costs had gone up by more than 15%.
The CII survey further added that the need for the government to direct the suggested increased spending into roads & highways, low cost housing, power and ports. About 81% of the CEOs accorded highest priority to road and highways and low cost housing for directing the suggested additional government spending.
(Sourced from myiris.com)
Rebar prices dip by 4% at Delhi - 29 Jan 2009 The prices of long products remained unchanged in most parts of Indian on January 28th 2009 except for Delhi where rebar prices fell by 4% and Bangalore the price of structural steel fell by 3%.
Delhi
| Item | Grade | Size | Change | %
| | TMT | Fe 415 | 12mm | -1224 | -3.7%
| | | | | |
Change is on January 28th as compared to January 27th 2009
Change is in INR per tonne
Bangalore
| Category | Grade | Size | Change | %
| | ANGL | GR A | 65x6 | -500 | -1.6%
| | CHNL | GR A | 75/100 | -1000 | -3.1%
| | JSTI | GR A | 250x125 | -1000 | -3.0%
| | | | | |
Change is on January 28th as compared to January 27th 2009
Change is in INR per tonne
Prices of long products at other locations remained unchanged except for following variations
Ahmedabad
| Item | Grade | Size | Change | %
| | TMT | Fe 415 | 12mm | -229 | -0.8%
| | | | | |
Change is on January 28th as compared to January 27th 2009
Change is in INR per tonne
Mandi
| Item | Grade | Size | Change | %
| | ANGL | GR A | 65x6 | -208 | -0.6%
| | CHNL | GR A | 75/100 | -208 | -0.6%
| | | | | |
Change is on January 28th as compared to January 27th 2009
Change is in INR per tonne
To keep tab on steel prices subscribe to services of www.steelprices-india.com by registering or sending a mail to admin@steelprices-india.com. Please note that this is a paid service.
(Sourced from www.steelprices-india.com)
NMDC announces Q3 results - 29 Jan 2009 NMDC Ltd has announced that the following Unaudited results for the quarter ended December 31st 2008. NMDC has posted a net profit of INR 14249.50 million for the quarter ended December 31st 2008 as compared to INR 9682.20 million for the quarter ended December 31st 2007.
Its total Income has increased from INR 17981.20 million for the quarter ended December 31st 2007 to INR 25666.80 million for the quarter ended December 31st 2008.
Welspun Gujarat bags INR 500 crore orders from GAIL - 29 Jan 2009 It is reported that the flagship company of Welspun Group Welspun Gujarat Stahl Rohren shares hit upper circuit at INR 73.60 on the Bombay Stock Exchange after the company bagged orders worth INR 500 crore from GAIL for a pipeline related works.
The company in a filling in a BSE said that it has received this order in conjunction with other significant orders the company obtained in the last few months.
Mr BK Goenka vice CMD of Welspun said that “Welspun takes pride to deliver this prestigious order in the Indian soil. These orders not only reaffirm our position as a global supplier, but also reiterates its reach in the premium segment of the Indian pipe market.” He added that these orders take the company's order book to INR 10,000 crore.
(Sourced from Times of India)
Indian flat products prices stable - 29 Jan 2009 The prices for flat products across Indian remained unchanged on January 28th 2009 except for minor variations as under
Ludhiana
| Category | Grade | Size | Change | %
| | HRC | Tube | 2.5x1250 | 227 | 0.8%
| | | | | |
Change is on January 28th as compared to January 27th 2009
Change is in INR per tonne
Ahmedabad
| Category | Grade | Size | Change | %
| | Wide Plates | GRB | 12-20x2.5 | -272 | -0.8%
| | | | | |
Change is on January 28th as compared to January 27th 2009
Change is in INR per tonne
Kanpur
| Category | Grade | Size | Change | %
| | Narrow Plates | GRA | 8x1.25 | -261 | -0.9%
| | | | | |
Change is on January 28th as compared to January 27th 2009
Change is in INR per tonne
To keep tab on steel prices subscribe to services of www.steelprices-india.com by registering or sending a mail to admin@steelprices-india.com. Please note that this is a paid service.
(Sourced from www.steelprices-india.com)
Shyam Steel to go ahead with steel unit at Purulia - 29 Jan 2009 ET reported that Shyam Steel has decided to go ahead with its proposed Greenfield steel unit in West Bengal's Purulia despite a slowdown in steel sector.
Mr Buddhadeb Bhattacharjee CM of West Bengal will lay foundation stone of the project at Raghunathpur in Purulia on February 17th 2009.
The report added that Shyam Steel has however decided to slash investment in the project's first phase consisting of a 1.1 million tonne steel unit and a 150 MW power plant from INR 1600 crore to INR 1200 crore.
The unit will produce direct reduced iron for captive use at Shyam Steel's existing unit in Durgapur where it produces construction grade steel and TMT bars.
Mr Lalit Beriwala director of Shyam Steel told Telegraph that “We will stop at sponge iron and pellet instead of moving further to billet and TMT bars in Purulia. Since the market condition is bad, we will not sell anything to outsiders.”
However Telegraph also reported that Shyam Steel has put its Kharagpur plant on hold. In February 2008, it had signed a memorandum of agreement with the Bengal government for a 1.1 million-tonne plant at Raghunathpur in Purulia and a 0.6 million tonne facility in Kharagpur. Initially, the company had planned to invest INR 2,000 crore in the first phase of the Purulia and the Kharagpur projects.
(Sourced from Economic Times and The Telegraph)
Sponge iron up but ingot prices down - 29 Jan 2009 Prices of steel making input materials exhibited mixed trend on January 28th.
Although price of sponge iron firmed up at Raipur, pencil ingot saw weakness ate several locations. Scrap prices at Mandi are also reported to have gone down a bit.
Sponge iron
| Location | Change | %
| | Raipur | 200 | 1.5%
| | | |
Change is on January 28th as compared to January 27th 2009
Change is in INR per tonne
Pencil ingot
| Location | Change | %
| | Mumbai | -300 | -1.4%
| | Mandi | -272 | -1.2%
| | Raipur | 174 | 0.9%
| | Ghaziabad | -100 | -0.4%
| | Muzzafarnagar | 87 | 0.4%
| | Ahmedabad | -500 | -2.3%
| | | |
Change is on January 28th as compared to January 27th 2009
Change is in INR per tonne
Melting scrap
80:20
HMS
| Location | Change | %
| | Mandi | -91 | -0.5%
| | | |
Change is on January 28th as compared to January 27th 2009
Change is in INR per tonne
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(Sourced from www.steelprices-india.com)
Orissa clears INR 37,989 crore steel and power projects - 29 Jan 2009 BS reported that the Orissa government recently cleared projects worth INR 37,989 crore in the power and steel sector. This include 5 projects in the power sector with a combined investment of INR 28,704 crore and aggregate generating capacity of 6120 MW and one steel project envisaging an additional investment of about INR 9285 crore.
The High Level Clearance Authority of the Orissa government headed by Mr Naveen Patnaik CM of Orissa recently cleared those projects which were earlier cleared by the State Level Single Window Clearance Authority.
Mr Saurav Garg industry secretary and Mr Pradeep K Jena secretary of energy department, Orissa government said that Ind-Barath Energy Utkal Limited will set up 700 MW thermal power plant at Sahajbahal near Banaharpali in Jharsuguda district at an investment of INR 3,150 crore.
As per report, out of the 550 acres of land required for the project, the company has already taken possession of 423 acres of land through negotiations with about 120 land losers. It has got the approval of the state government for setting up of 350 MW power plant at an investment of INR 1000 crore.
However, the HLCA in its meeting today approved the proposal of the company to raise the generating capacity to 700 MW entailing an investment of INR 1500 crore. It will source 28 cusecs of water from Mahanadi and the project will generate direct employment for 360 persons.
The report added that the HLCA has approved the 1680 MW thermal power project proposed by L&T Ltd with an investment of INR 10,200 crore near Dhamra in Bhadrakh district.
While the company will require about 1545 acres of land, it will have to make use of the sea water for cooling. Besides, it will have to settle all the legal issues before signing the MoU.
Another thermal power project proposed by Jindal Steel and Power Ltd also received the nod of the HLCA. It will set up a 1320 MW thermal power plant at Athamallik tehsil in Angul district with an investment of INR 5940 crore. It will require 49 cusecs of water and 1625 acres of land for the project.
Besides, the proposal of the company to change the configuration of the steel plant in the same location was also approved by HLCA.
(Sourced from Business Standard)
US House approves "Buy America" steel measure - 29 Jan 2009 Reuters reported that the US House of Representatives has approved "Buy America" steel provision as part of USD 825 billion package to help pull the US economy out of recession. The provision requires public works projects funded by the bill to use only US made iron and steel.
House leaders included the language despite strong objections from the US Chamber of Commerce and other business groups which said it would set a bad example for other countries considering their own economic stimulus plans.
Mr Leo Gerard president of the United Steel Workers union said that “We have got manufacturing in America in a total and complete freefall. It is about time we had some economic patriots.”
The stimulus package contains about USD 90 billion for highway, rail and other infrastructure projects.
The Buy America steel measure specifically covers airports, bridges, canals, dams, dikes, pipelines, railroads, multiline mass transit systems, roads, tunnels, harbors and piers.
(Sourced from Reuters)
Iron ore price negotiations - MMK gets 40% cut form ENRC - 29 Jan 2009 AK&M cited Mr V Rashnikov chairman of MMK as saying that the company managed to decrease iron ore buying price form USD 85 per tonne to USD 50 per tonne down by 41 % from January 2009 despite a long term contract till April 1st 2009.
The main iron ore supplier of MMK is ENRC of Kazakhstan as both sides concluded 10 years contract in 2007 with the price to be revised yearly according to iron ore prices dynamics in global market.
The negotiations between the biggest world iron ore manufacturers and consumers for 2009 have not completed yet.
The report added that “However, for Russian consumers who have not concluded long-term contracts and are oriented on spot shipments, iron ore in Q1 2009 will cost even less as metallurgical raw materials prices in RF now are much lower than global.”
(Sourced from AK&M)
Corus may sell stake in Teesside to Marcegaglia and Dongkuk - FT - 29 Jan 2009 Financial Times reported that Corus is close to an agreement to sell a majority stake in a large steel plant on Teesside for about USD 450 million securing about 2,000 jobs at the site.
As per report “Under the outline of the transaction, a stake of about 75% will be transferred by Corus to an Italian led partnership of Marcegaglia of Italy and Dongkuk of South Korea, leaving Corus a stake of about 25%.”
The report added that “The new ownership arrangement, in which Marcegaglia would be senior partner, with an overall stake of 40% to 45%, would provide much needed cash to bolster Corus’s balance sheet.”
The report citing 2 people close to the discussions said that an outline of a deal had been reached, but details still needed to be finalized.
Under an agreement reached in 2005, Marcegaglia and Dongkuk along with two other steelmakers take slabs from the plant for their own use.
(Sourced from FT)
MEPS sees steel price decline in developing nations - 29 Jan 2009 UK based stele consulting major MEPS said that the Turkish and UAE flat and long markets are still not exhibiting any positive signals. It said that “Most Turkish long product producers have lowered their offers this month. Market conditions in the UAE remain difficult. Dubai-based traders are, as yet, unable to sell quayside material purchased last year. User requirements are still short of what is needed to deplete stockpiles.”
MEPS said that “January is not a strong business period in the Russian Federation owing to the country’s 10 day federal holiday. The trading environment has been difficult this month and this has been reflected in lower local transaction prices. Little business was conducted this month. End-user interest remains weak.”
It added that the South African steel industry continues to be kept afloat by state-funded construction and infrastructure developments and difficult trading conditions persist in the flat products segments.
It also said that “The steel industry in Mexico is now coming to terms with the effects of the global economic downturn. Local demand for long and flat material has deteriorated further. Export-orientated manufacturers have been hit hard by the slowdown in U.S. consumer spending.”
However it opined that “Market sentiment in the Indian steel industry has improved this month. The government has announced additional measures to reinvigorate the local economy. However, market participants believe that it is too soon to announce whether or not these stimulus plans will succeed.”
(Sourced from MEPS)
China dissatisfied over EU AD move on Chinese fasteners - 29 Jan 2009 Xinhua citing Mr Yao Jian spokesperson of the Ministry of Commerce as saying that Chinese government expressed dissatisfaction over the EU's final decision to take anti-dumping measures against China-made fasteners.
Mr Yao also expressed the attitude on behalf of Chinese fastener manufacturers. He said that China believed that practices by the EU's in the investigation and verdict on China exported fasteners were inconsistent with WTO rules and EU anti-dumping laws. He added that "The ruling against the Chinese products lacked justness and transparency, with obvious probability toward trade protectionism."
Mr Yao said this extremely damaged the legitimate rights and interests of the Chinese fastener manufacturers. China will study and assess the verdict and retain right to appeal to the World Trade Organization against the ruling.
(Sourced from Xinhua)
Production pruning - Wave of closures of projects in Mexico - 29 Jan 2009 Platts cited the Chamber of the Mexican Mining Industry, or Camimex, as saying that the sharp fall in prices of industrial metals has led to plant closures, program layoffs and the suspension of projects in Mexico's mining industry.
Camimex said that development of the USD 540 million El Boleo polymetallic project in the south of the Baja California peninsula has been suspended by the owners, Vancouver based Baja Mining.
Also Minera Nuevo Monte at Zimapan in the central state of Hidalgo was closed after 4 years of production. Nuevo Monte was a unit of Cormin, the Peruvian mining subsidiary of Amsterdam based international commodities trader Trafigura Beheer. Nuevo Monte blamed the crisis in metals prices for the closure, but above all the damage caused by an illegal strike. The Zimapan plant, on which USD 26 million was invested, had a production capacity of 75,000 tonnes per month of zinc, copper and lead.
Canada based Frontera Copper closed its Cobre de Mayo mine in the northwestern state of Sonora, which in 2007 produced 24,500 tonnes of LME grade A cathode copper at a cash cost of USD 1.30 per pound.
Scorpio Mining, also of Canada closed its polymetallic mill at the Nuestra Seora mine in the Pacific Northwest state of Sinaloa. In December 2008, Scorpio had reported that official commercial production would begin this month. Throughput of silver, copper, leads and zinc from the mine was estimated at 11,500 tonnes per month.
Monterrey based Minera Autlan was forced to close its ferroalloy plant at Gomez Palacio in the northern state of Chihuahua and introduce program layoffs at its plant in Puebla state, southeast of Mexico City Minera del Norte, an iron ore producing subsidiary of AHMSA, announced closure of its extraction, grinding and milling activities at Camargo in the northern state of Chihuahua for a minimum of 6 months.
(Sourced from www.platts.com)
Ukrainian iron ore exports in 2008 up by 5.1% YoY - 29 Jan 2009 Ukrainian Journal Staff quoted Ukrrudprom, the association of Ukrainian mining enterprises said Ukraine raised iron ore exports by a preliminary 5.1% in 2008 to 21.872 million tonnes.
Iron ore concentrate exports soared 33.7% to 6.4 million tons, with sinter exports falling 5.4% to 6.772 million tons and pellet exports down 2% to 8.7 million tonnes.
(Sourced from Ukrainian Journal)
CIL rejects Rio Tinto offer for developing coal mines - 29 Jan 2009 PTI cited Coal India Ltd has rejected global major Rio Tinto’s bid for developing its abandoned and underground mines of coal as saying that the company falls short of expertise” to take up the venture.
Mr PS Bhattacharyya chairman of CIL said that “Rio Tinto is a great company, but have not developed any abandoned mines. Their experience in underground mining and DPR also falls short of what our Notice Inviting Tender stipulates.”
Mr Bhattacharyya said that though the mines are to be awarded on a turn key basis, CIL will invest about INR 4,000 crore in it. The country’s largest coal producer has already prepared NIT for the underground mines and is seeking comments from the nine short listed companies out of the total 17. It is likely to float a tender for awarding the project next month.
Besides, seeking a turn key contract for the underground mines, Rio Tinto India had evinced interest in partnering with CIL for developing its 18 abandoned mines which have an estimated coal reserve of 1,647 million tonne. Mr Nik Senapati MD of Rio Tinto India said that “We participated in the EoI and are waiting for a decision to be made by Coal India.”
As per report, CIL plans to produce about 100 million tonne of coal from its underground operations by 2016-17. The 7 underground mines on offer by for revival possess about 20 million tonne of coal.
However, Rio Tinto India, the companies vying for the underground mines include Reliance Infrastructure, Indo Australian Mining and Bucyrus of Germany. For the abandoned mines, being eyed by 12 corporate majors, including ArcelorMittal, Reliance, Sterlite, Essar and JSW Steel, the technical bids are under evaluation with Central Mining and Planning Development Institute.
(Sourced from Press Trust of India)
ArcelorMittal denies rumors of selling assets to Usiminas - 29 Jan 2009 BNamericas reported that ArcelorMittal has shot down rumors that it aimed to sell some of its assets in Brazil to local steelmaker Usiminas.
ArcelorMittal in a statement said that the rumors were false and that the company had no intention to sell the assets to anyone.
Mr Antonio Carlos Goes analyst with the Senso brokerage said that selling the assets would have been a very unwise move taking into account the present financial situation. He added that "It's just not the right time for that. How can someone sell an asset in the current economic scenario and at what price?"
(Sourced from www.bnamericas.com)
Mcarthur looks towards thermal coal - 29 Jan 2009 Australian Mining reported that Mcarthur Coal plans to meet its revised targets for 2009 despite the ongoing threat from the global financial crisis.
The company released its December quarterly report recently which indicated it had sold 2.3 million tonnes in the six months to December 31st. The figure was 28.9% higher than the corresponding period in 2007, but less than expected.
The impact of the global financial crisis has been further reaching than sale targets, under the current market the company has been forced to reduce staffing levels by approximately 180 people across the company, comprising both employees and contractors.
Mr Ian McAleese Mcarthur’s executive general manager of corporate development said the company was confident of meeting revised targets for 2009 and selling another 1.6 million tonnes in the six months to June 30th.
(Sourced from Australian Mining)
ThyssenKrupp launches services business in Serbia - 29 Jan 2009 It is reported that ThyssenKrupp Services is again expanding its materials services business and since January 2009 has been represented in Serbia through the new ThyssenKrupp Materials.
The Serbian market is being accessed from a green field site in Indjija, 40 kilometers northwest of Belgrade. On an area of over 17,000 square meters an ultramodern materials processing and logistics center with its own rail link has been set up. Here, in the medium term, around 15,000 tonnes of materials will be stored and the workforce expanded to around 60. The management team consists of Mr Stevan Sefer and Mr Petar Radovanovic.
Mr Joachim Limberg VC of executive board of ThyssenKrupp Services said that "This move means that our network in C&E Europe and, specifically the Balkans, is now even more closely knit. Right from the start we will be concentrating on high grade rolled steel products including complex value adding processing services. These products will then be followed within short by nonferrous metals and plastics to embrace a full lineup."
Mr Limberg added that "Belgrade is the nation’s industrial heart. From Serbia we will be serving neighboring countries such as Croatia, and Bosnia and Herzegovina."
ThyssenKrupp Services has for many years now been successfully represented by materials services companies in C&E Europe and the Balkans: a total workforce of over 1,000 is employed in Bulgaria, Czech Republic, Hungary, Poland, Romania, Russia, Slovakia, Ukraine, and, now, too, Serbia.
(Sourced from en.sourcews.com)
Fitch release on US coal outlook for 2009 - 29 Jan 2009 According to Fitch Ratings its US Coal Outlook for 2009 will include a weaker demand than 2008 but resilient cash flows will sustain the industry's stable outlook.
According to the report, coal producers are scaling back production due to the sharp economic contraction that has resulted in lower prices for natural gas, expectations for lower power demand, and sharply lower global demand for metallurgical coal. While spot prices are trending down, most of 2009's and a significant portion of 2010's steam volume has been priced in the favorable environment of late 2007/early 2008.
Monica Bonar Director, at Fitch said “Well-capitalized coal companies have solid liquidity and modest near-term debt maturities. Leverage should remain in a range with scant new borrowing and solid earnings.”
Fitch said regulatory uncertainty about carbon emissions has stalled plans for many new coal plant builds, which will cap domestic demand in the medium term. Despite expectations for lower steel, consumable and energy prices, cost inflation is expected to persist given labor and safety cost escalation.
Russian metals merger should to enhance competitiveness - 29 Jan 2009 Bloomberg cited Mr Vladimir Putin PM of Russian as saying that Russian metals companies should only merge with rivals to enhance competitiveness and not simply to consolidate debt.
He said that “It does not take a lot of brains simply to unify debts with debts. If we combine two poor people, the family will not become richer.”
He added that billionaires Mr Oleg Deripaska and Mr Vladimir Potanin last week put forward a plan to merge Moscow based OAO GMK Norilsk Nickel with five other metals producers to create the world’s second largest mining company.
Mr Putin said that “They proposed the government swap debt for 25% of the new company. The state hasn’t decided whether to support the plan. We will take a very balanced approach.”
Mr Putin said that “When there’s some positive synergy for the merger with mineral resources from one side and financial opportunities from the other and a sales market on another, then of course it is needed.”
He said that he supports the long overdue consolidation of the country’s banking industry. He said that “If you look at the number of banks in Russia and the number of banks in a developed economy, there are just too many of them.
According to central bank data, the government handed out more than USD 13.5 billion in bailouts to Russian companies since October after commodity and stock prices plunged. Russian companies are due to repay USD 110 billion of foreign obligations this year, more than double the total owed in Brazil, India and China.
Mr Deripaska and Mr Potanin the two biggest shareholders in Norilsk, proposed a combination with state owned titanium maker OAO VSMPO Avisma, which is based in the Urals Mountains city of Verkhnaya Salda, iron ore producer OAO Metalloinvest, Berezniki based potash miner OAO Uralkali and steelmakers Evraz Group SA and Moscow based OAO Mechel.
According to Interros Holdings Company, the new company would have debts as much as USD 28 billion, sales of USD 60 billion and a market capitalization of as much as USD 100 billion.
(Sourced from Bloomberg)
Annual Report on China's Steel Market in 2008 and the Outlook for 2009 - 29 Jan 2009 SteelHome publishes its 'Annual Report on China's Steel Market in 2008 and the Outlook for 2009’. The report includes 14 separate reports on World Steel Market, China Steel Market, China HRC/CRC Market, China Wire Rod/Rebar Market, China Plate Market, China Stainless Steel Market, China Seamless Steel Pipe Market, China Strip Market, China Plated/coated Coil Market, China Section Market, and China Iron Ore Market, China Coke Market, China Scrap Market, China Ferroalloy Market.
Table of Contents
I Analysis on sharp rise and sharp fall in 2008 China steel market
1 Massive hike in China steel market in H1, 2008
A. Snow storm affected steel supply
B. Power coal and coke supply shortage during Spring Festival
C. Massive rise in iron ore contracted price
D. Influences of Beijing Olympics
E. Prefab construction after Wenchuan earthquake drove up cold rolled products market
F. Continuous depreciation of US dollar, crazy hike in commodity price and spreading inflation all over the world
G. World steel price surged
In spite of the tightened money policy the government implemented, inflation pressure still mounted, which cushioned the contradiction of the glut.
2 China steel price plummeted from the 3rd quarter.
A. China economy grew slower in the 3rd quarter.
B. Continuously tightening money policy exerted great pressure on capital flow.
C. International commodity price dropped with the depreciation of USD
D. Financial crisis blew heavily on market psychology.
3 China crude steel supply forecast
A. According to current market situations and production cutbacks amid many steel mills, SteelHome revised its formal prediction of 520-530 million tons of 2008 crude steel production to about 510 million tons, up 4.2% or 20 million tons year on year.
B. SteelHome assumes China steel products exports of 2008 at 57.50 million tons, down 8.2% or 5.15 million tons year on year
II China steel market anticipation for 2009
1 SteelHome assumes 540 million tons of China crude steel output in 2009.
A. Market price will further curb the growth of steel production
B. Coke supply continue to curb steel production
C. The investment in China steel industry will maintain low.
D. Flats production will stay high, and glut will not change.
E. The utilization of steel capacity stay high.
2 Financial crisis hinder China steel exports
A. World economy grow slower and steel demand dims
B. China steel exports will be improved with the resolve of financial crisis.
3 Steel demand in China home markets will sustain stable rise, but the growth rate will drop from 2008.
A. Advantages—Comprehensive national power is strengthened
B. Disadvantages—Domestic demand takes up small proportion of GDP.
C. Expectation for 2009 China Economic Growth
D. Little headroom for FAI rise.
E. Export rise slows down further.
F. Consumption grow slower.
G. Analysis on Downstream Sectors. In 2008, some steel-consuming industries are also on downward slope.
H. Steel consumption rise forecast in China home market in 2009
4 China steel market forecast for 2009
List of Tables:
1 Average Price Change in China 28 Major Cities (in yuan per ton)
2 Backward Capacity Elimination in China Steel Industry
3 IMF Outlook on World Economic Growth
4 China Crude Steel Net Export Scenarios
5 Crude Steel Demand and GDP
6 Crude Steel Demand and FAI
7 Economic Gauges in 1997-2008
To know more about the report please gets in touch with reports@steelguru.com
Rio Tinto likely to raise equity - 29 Jan 2009 Reuters reported that Rio Tinto Limited might need to sell shares to help pay off USD 39 billion in debt, conceded an equity raising was one option being considered.
Rio Tinto's shares fell as much as 5.5% to AUD 39.85, bucking a stronger broader market, as investors bet it might have to raise between AUD 4 billion and AUD 8 billion from a rights issue as it struggles to sell more assets.
Mr Tim Barker, resources analyst at BT Investment Management said that "They will have to continue to sell assets, there's no doubt about that, even with a rights issue. But it would put them in a better position."
Rio said in a statement that "In order to preserve maximum flexibility for the Group, the boards do not rule out the potential to issue equity as one of the options it has available."
Media reports have speculated the group might raise as much as USD 7 billion through a rights issue.
Rio Tinto had aimed to sell USD 10 billion worth of assets last year, including its US coal business, as it tried to pay down debt it took on with its USD 40 billion takeover of Alcan in 2007. So far it has sold USD 3.1 billion worth of assets, including its half stake in a Chinese aluminium smelting business sold this week. It is still looking to sell its US coal business and the Alcan packaging business.
Analysts have speculated the group might sell its stakes in the Australian coal business, Coal & Allied Industries and ERA Limited although the company's top energy executive said last week there were no plans to sell those businesses.
A key obstacle for Rio Tinto will be how to structure any rights issue, as its shares are trading around 15% below its Australian shares. Rio Tinto would be the latest in a string of Australian companies turning to shareholders to raise cash to help pay down debt or shore up their capital reserves over the past few months.
(Sourced from Reuters)
PSMC Privatization - Put off until revamped - 29 Jan 2009 The News reported that Pakistan government has put off Pakistan Steel Mills’ privatization until its balancing, modernization and renovation with estimated cost of PKR 2 billion and expansion through foreign investment of USD 1.3 billion is completed.
After the BMR and expansion of PSM, a senior official in the ministry of industries & production said that “The fate of the PSM will be decided. Either it is retained under public control or privatized under the new PPP policy.”
The privatization of Pakistan Steel Mills after Supreme Court’s decision was put on hold on May 24th 2006. Although it remained on the list of the Privatization Commission successive governments repeatedly affirmed that the sale of this strategic asset would not be made in haste.
On the BMR of the PSM, the ministry is expecting an expenditure of PKR 2 billion and it would be initiated as the PSM sell off plan has been put on halt.
About expansion plan of the PSM, the official said that a foreign company would be awarded a contract for its expansion in three years. After the completion of the expansion, it would be decided either it is privatized or kept with public sector control.
With the BMR and expansion of PSM, the official hoped that PSM present capacity of 1.1 million tonnes would be enhanced to over 3 million tonnes. It is enough to meet the local demand of the steel
Under the new privatization policy of PPP, the privatization of any strategic asset would only be offered by giving 12% mandatory share to the workers and management control either with 25 to 50% share to the interested parties.
The board of the PC in its meeting also appointed a UK based company to submit a calculation with total financial impact for offering 10, 12 and 15% mandatory shares to the workers.
(Source from The news)
Downsizing deals - UK PM vows to support steel industry - 29 Jan 2009 This is Scunthorpe reported that Mr Gordon Brown PM of UK pledged that the British government would do everything that we can to support the British steel industry.
Mr Brown said that "Steel is absolutely crucial to the manufacturing future of this country."
AS per report, Labor MP Mr Martin Caton (Gower) called on the Government to press Corus to use a combination of voluntary redundancies and redeployment between plants rather than simply cutting workers off. Mr Caton asked Welsh Secretary Paul Murphy: "You will be aware that Corus have announced the closure of Corus Coated Metals in Pontarddulais in my constituency, a blow to that community and to those workers.”
He added that "Yet all of those workers have also worked at some time at Port Talbot. Will you urge Corus management to show flexibility in employing a combination of voluntary redundancies and inter-plant redeployment to minimize the damage?"
Mr Murphy said the points were valid and that he would raise them in future meetings with Corus and trade unions.
Earlier this week steel giant Corus announced it was axing 2,500 posts in the UK as demand was hit by the global recession.
(Sourced from This is Scunthorpe)
Work continues at ThyssenKrupp stainless site despite delay - 29 Jan 2009 It is reported that delay does not mean stop at ThyssenKrupp's stainless division. Though only limited new activity will get started, the company will finish putting up the roof and walls of its cold rolling mill, a task that will keep that part of the giant construction site humming into the summer.
Mr Ulrich Albrecht Frueh CEO of ThyssenKrupp Stainless USA said that "There will be no reductions, really, until all the buildings are set up."
ThyssenKrupp Stainless said that it would delay starting operations by 12 months, until October 2010, as part of a drive by parent company ThyssenKrupp AG to preserve cash during the global recession. It also hopes to wait and begin production when the overall stainless steel market is less distressed. The larger carbon steel unit at Calvert remains on schedule to start production in March 2010.
The complex announced in 2007 is supposed to ultimately employ 2,700 people, 1,800 on the carbon steel side and 900 in the stainless operation. The site is shared by those two divisions of Germany's ThyssenKrupp AG, with each managed separately. The delay means the stainless unit won't add to its 177 person workforce during coming months, though the company has promised no layoffs. It will push back construction of its melt shop, which will ultimately turn out 1 million metric tons of stainless steel each year, and will try to transfer as much spending as possible into ThyssenKrupp's 2009-10 budget year, which starts in October.
Mr Albrecht Frueh said that company leaders decided they wanted to have the building entirely enclosed before the heart of the 2009 hurricane season. And enclosing the building means that utility connections, drainage work and some road work must be done. He added that "There is a certain logic in getting the whole cold rolling complex completed. The nice thing is we have a little more time on the timeline. It's not such high pressure as before."
(Sourced from www.al.com)
Vale gains on speculation of recovery in China - 29 Jan 2009 Vale do Rio Doce roses to the highest in 2 weeks on speculation Chinese demand will bolster prices for steelmaking ingredients. Vale preferred shares jumped 3.3% to BRL 27.85. Common shares climbed 4.5% to BRL 32.20, leading gains on the Bovespa. Steelmakers also rallied after better than estimated profits at US Steel Corporation and Nucor Corporation.
The Baltic Dry Index, a measure of shipping costs for commodities, today exceeded 1,000 points for the first time in three months, buoyed by demand to haul iron ore to China, the biggest consumer of the raw material used in steel. Port stockpiles of the ore in China are about 60 million tonnes, below 30 day requirements.
Mr Pedro Galdi, an analyst at SLW Corretora in Sao Paulo said that “There’s talk of recovery in prices, especially in markets where you had stockpiling, and you have some signs pointing to improvement in prices. China accumulated stocks last year, perhaps with an eye to price negotiations. Now stocks are being reduced and China is back to buying.”
China’s iron ore stockpiles have dropped 22% from a record in September 2008 as steelmakers restrained output in response to weaker demand.
Ms Michelle Applebaum, who runs a steel equities research firm in Highland Park, Illinois, wrote in a note that “China and the Middle East saw the greatest number of price increases in the week. Given China’s sheer size, there may be some hope that China could lead us out of the worst steel depression in a hundred years.”
Cia Siderurgica Nacional SA increased 3.1% to BRL 36.08. Bigger rival Usinas Siderurgicas de Minas Gerais SA rose 1.45 to BRL 27.87. US Steel and Nucor gained more than 65 in New York trading after the companies announced profits amid the economic slowdown.
(Sourced from Bloomberg)
US Steel releases Q4 and 2008 financial results - 29 Jan 2009 United States Steel Corporation has posted net income of USD 308 million in fourth quarter of 2008 as compared to USD 919 million in third quarter of 2008 and fourth quarter 2007 net income of USD 35 million. Fourth quarter 2008 net income was increased by USD 76 million by certain items as discussed below. For full year 2008, US Steel reported net income of USD 2,130 million as compared with full year 2007 net income of USD 879 million.
US Steel reported fourth quarter income from operations reached USD 549 million as compared with income from operations of USD 1,327 million in the third quarter of 2008 and USD 116 million in the fourth quarter of 2007. For the year 2008, income from operations was USD 3,096 million versus income from operations of USD 1,213 million for the year 2007.
Net interest and other financial costs in the fourth quarter of 2008 included an immaterial foreign currency gain related to the re measurement of a USD 815 million denominated inter company loan to a European subsidiary and related euro US dollar derivatives activity. This compares to a foreign currency loss of USD 39 million per diluted share, for these items in the third quarter of 2008.
| | 4Q '08 | 3Q '08 | 4Q '07 | FY '08 | FY '07
| | Net sales | 4,565 | 7,312 | 4,535 | 23,817 | 16,873
| | Segment income from flat rolled | 2 | 846 | 63 | 1,409 | 382
| | US Steel Europe | 134 | 173 | 85 | 498 | 687
| | Tubular | 559 | 420 | 83 | 1,207 | 356
| | Net income | 308 | 919 | 35 | 2,130 | 879
| | | | | | |
In million USD
Mr John P Surma chairman & CEO of US Steel said that "Although the global economic situation negatively affected fourth quarter results, we had an outstanding year in 2008, with record net sales, income from operations and net income. Our strategic acquisitions positioned us to realize substantial benefits from strong global market conditions during most of 2008."
Russian coal production in 2008 up by 3.9% YoY - 29 Jan 2009 Interfax reported that Russian coal production plummeted 10.2% YoY in December to 27.9 million tonnes, but rose 3.9% in 2008 as a whole to 326 million tonnes.
The Federal State Statistics Service said that coal production in December was 0.3% higher than in November. Bituminous coal production rose 1.4% in the year to 246 million tonnes. The growth was driven by a 5.2% increase to 143 million tonnes at open cast mines, while deep mines cut output 3.5% to 103 million tonnes.
Lignite coal production grew 12.6% to 80.5 million tonnes and coal concentrate production rose 2% to 79.8 million tonnes, however coking coal production fell 6.6% to 66 million tonnes.
Russia's biggest coal producer is Siberian Coal and Energy Company, which supplies around a third of the domestic market's power generating coal.
(Sourced from Interfax)
Nabucco pipeline project to be tendered by 2010 - 29 Jan 2009 Iran’s Press TV reported that construction orders relating to the Nabucco gas pipeline project will be put out to tender at the end of 2009 or in early 2010. The 3,300 kilometers Nabucco pipeline aims to carry natural gas from Central Asia via Turkey and the Balkan states to Austria.
Mr Reinhard Mitschek, MD of Nabucco Gas Pipeline International GmbH said that he expects commitments from the pipeline's customers and suppliers by the end of 2010.
He added that "The main objective will be to discuss and decide roadmap to go ahead. We expect the first gas for Nabucco from Azerbaijan."
Representatives from the European Union, Caspian Sea gas producing countries and gas transit states will attend a January 27th 2009 summit in Hungary to discuss the construction of the pipeline, which is expected to become operational in 2013.
According to Mr Mitschek, Iran is unlikely to attend the Budapest summit and is among suppliers considered for the project. His remarks come as MD of National Iranian Gas Export Company, Mr Reza Kasaizadeh, said that Tehran has received no invitation to attend the summit.
The recent Russia Ukraine gas row, which led to a disruption of supplies to a dozen European countries amid a cold snap, has prompted the EU to step up efforts to reduce its reliance on Russian gas, which accounts for about a quarter of Europe's needs.
(Source from Press TV)
AK Steel announces Q4 and 2008 financial results - 29 Jan 2009 AK Steel has announced 2008 fourth quarter adjusted income before taxes of USD 0.6 million as compared to income before taxes of USD 164.1 million in the 2007 fourth quarter. The adjusted 2008 number excludes a USD 699.5 million non cash charge related to the company’s pension plans. Most of the non cash charge, USD 660.1 million, resulted from the company’s unique corridor pension accounting requirement, while USD 39.4 million resulted from the company’s decision in December to lower future costs by locking and freezing the defined benefit pension plans for salaried employees.
AK Steel recorded a net loss of USD 430.6 million in the 2008 fourth quarter as compared to net income of USD 106.7 million in the 2007 fourth quarter. There were no corridor or curtailment charges in the fourth quarter of 2007.
Net sales for the fourth quarter of 2008 were USD 1,458.7 million on shipments of 1,073,500 tonnes, approximately 14% YoY and 32% YoY lower than in the year ago period. However, its average selling price was USD 1,359 per tonne for the fourth quarter of 2008, up by 26% YoY as against USD 1,079 per tonne average price in the year-ago period. Adjusted fourth quarter 2008 operating profit was USD 10.3 million, excluding the pre tax corridor and curtailment charges. Including the charges, the company's operating loss for the 2008 fourth quarter was USD 689.2 million as compared to an operating profit of USD 153.5 million for the 2007 fourth quarter.
For the full 2008 year, excluding the fourth quarter charges, AK Steel reported adjusted, pre tax income of USD 692.6 million. Including the fourth quarter charges, the company posted net income of USD 4 million as compared to net income of USD 387.7 million for 2007. The 2007 full year net income includes a total of USD 39.8 million in one time curtailment charges related to the implementation of new labor agreements at the company’s Mansfield and Middletown plants.
Net sales for 2008 were a record USD 7,644.3 million on shipments of 5,866,000 tonnes as compared to revenues of USD 7,003 million on shipments of 6,478,700 tonnes for 2007. AK Steel’s average selling price for 2008 rose to a record USD 1,303 per ton, approximately 21% above its 2007 average of USD 1,081 per ton. Excluding the fourth quarter pre tax corridor and curtailment charges, the company posted record adjusted operating profit for 2008 of USD 727.5 million as compared to adjusted operating profit of USD 664.2 million. Including the fourth quarter charges, 2008 operating profit was USD 28 million as compared to 2007 operating profit of USD 624.4 million.
AK Steel ended 2008 with a cash balance of USD 562.7 million, in addition to USD 682.3 million of availability under its line of credit, for total liquidity of USD 1,245.0 million.
Coal of Africa secures rail deal and seeks expansion - 29 Jan 2009 Reuters reported that Coal of Africa had agreed a deal in which Transnet Freight Rail will transport one million tonnes per annum of coal to the Matola Terminal at Maputo in Mozambique.
CoAL, which has rights of up to 100% of any increased capacity at the Matola Terminal, also said in a statement it would provide funding for the proposed expansion at the Matola Terminal to a capacity of 2 million tonnes per annum. This expansion, due to be completed by August 2010, would bring CoAL's export allocation at the terminal to 3 million tonnes per annum.
Mr Simon Farrell MD of CoAL said "In addition to the current expansion plans at Matola, a feasibility study for a further 10 million tonnes per annum increase in capacity is underway. He said that the company also has the rights to this additional capacity, CoAL may secure a total of 13 million tonnes per annum export capacity via the Matola Terminal."
(Sourced from Reuters)
Nucor 2008 net earnings up by 24.5% YoY - 29 Jan 2009 Nucor Corporation has announced full year 2008 consolidated net earnings of a record USD 1.83 billion as compared with net earnings of USD 1.47 billion in 2007. Nucor's consolidated net sales for 2008 increased by 43% YoY to a record USD 23.66 billion as compared with USD 16.59 billion in 2007. Average sales price per ton increased by 30% YoY while total tons shipped to outside customers increased 10% YoY from 2007.
Consolidated net earnings of USD 105.9 million for the fourth quarter of 2008 decreased by 71% YoY as compared with USD 364.8 million earned in the fourth quarter of 2007 and decreased by 86% QoQ from the USD 734.6 million earned in the third quarter of 2008. Earnings were also decreased by USD 105.2 million in charges for impairment of non current assets and an expense of USD 42.4 million for writing down inventory to the lower of cost or market.
In the fourth quarter of 2008, Nucor's consolidated net sales decreased by 6% YoY to USD 4.15 billion as compared with USD 4.40 billion in the fourth quarter of 2007 and decreased by 44% QoQ as compared with USD 7.45 billion in the third quarter of 2008. Average sales price per ton increased by 30% YoY from the fourth quarter of 2007 and decreased 13% QoQ from the third quarter of 2008. Total tons shipped to outside customers were 4,294,000 tons in the fourth quarter of 2008, a decrease of 27% from the fourth quarter of 2007 and a decrease of 36% from the third quarter of 2008.
| Steel Mills | Q4 '08 | Q4 '07 | FY '08 | FY '07
| | Production | 3,062 | 5,586 | 20,446 | 22,089
| | Total shipments | 3,426 | 5,684 | 20,932 | 22,347
| | Outside shipments | 2,900 | 5,078 | 18,185 | 20,235
| | | | | |
| Steel Products | Q4 '08 | Q4 '07 | FY '08 | FY '07
| | Joist production | 94 | 133 | 485 | 542
| | Deck sales | 110 | 123 | 498 | 478
| | Cold finish sales | 91 | 127 | 485 | 449
| | Reinforcing steel sales | 286 | 198 | 955 | 583
| | | | | |
In '000 tonnes
LLX Minas Rio closes financing agreements with BNDES - 29 Jan 2009 LLX Logística SA, pursuant to article 157 of Law 6,404/76 and CVM Instruction no. 358/02, hereby announces that its subsidiary LLX Minas Rio Logística Comercial Exportadora SA executed the definitive financing agreements with Brazilian Development Bank and certain other financial institutions for the LLX Minas Rio project, pursuant to the terms of the BNDES formal Board approval that was disclosed in the Material Fact published by LLX on October 2nd 2008.
The financing agreements amount to BRR 1.321 billion, having a total amortization schedule of 12 years and two and a half years grace period. The transaction was structured as project finance with a debt/equity ratio of 73:27. From that total amount, 50% will be disbursed as a BNDES direct loan, while the other 50% will be on lending by Unibanco and Itaú, two leading financial institutions in Brazil.
With the completion of this phase, LLX Minas Rio is now fully funded to carry out its investment plan, thus enabling the handling of iron ore from Anglo American mines in the State of Minas Gerais, the anchor project for Açu Super Port.
(Sourced form www.metalsnews.com)
Slowdown signs - More projects likely to get delayed - 29 Jan 2009 Reuters reported that more projects are expected to be delayed or cancelled in the Gulf region in 2009 as banks feel the full pinch of the global financial turmoil. The 6 year oil boom which fizzled out in late 2008 has made projects finances a top activity for banks in the Gulf region, which witnessed an avalanche of infrastructure and energy projects. But financial woes have triggered project cancellations and delays in the world's top oil-exporting region.
Mr Derek Rozycki director for project & corporate finance at Mubadala said that “The entities that are going to get deals done are the major developers and sponsors who have the strongest banking relationships.”
In Bahrain, the USD 2.2 billion Al Dur power and water project jointly owned by Kuwait's Gulf Investment Corporation and France's GDF Suez has been delayed due to tight international lending criteria.
Bankers said the deals that will be done this year will typically have a much shorter tenure than before the credit crisis, and will have lower volumes. This, however, is also due to the current decline in projects' capital costs, as commodity prices are falling and as contractors facing stiff competition over fewer projects lower prices.
Mr Darren Davies, regional head of project finance at HSBC, estimated that capital costs will come down between 40 and 50% off their peaks last year, prompting sponsors of mega projects to wait for the second half of the year to benefit from lower costs.
A constraint to the project finance market in the region has been a lack of project bonds. Most bonds issued in the Gulf region are bought by banks, which effectively makes them a loan instrument rather than a fixed-income instrument.
The project finance market in the Gulf region also remains dominated by Western banks that cut down on their investments in emerging markets when the credit crisis unfolded.
Mr Davies added that “It has been apparent that there really isn't any depth in the market out here for long term finance and that is a critical problem for the market.”
(Sourced from Reuters)
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