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voda 26 april 2018 20:04

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Trump Trade war - Australia braces for US steel tariffs exemption

The Guardian reported that Australia is hoping to secure a permanent exemption to US steel tariffs before they come into force on 1 May but if not will have to rely on another temporary reprieve. According to the US Customs and Border Protection agency, the 1 May deadline when US steel tariffs will apply to all countries including Australia is fast approaching and no permanent exemption has yet been put in place.

Earlier in April the trade minister, Steve Ciobo, said Malcolm Turnbull had “secured an agreement with the US president that Australia will be exempt and that continues to be the case.”

But for two weeks Ciobo and the Department of Foreign Affairs and Trade have refused to answer questions about when and how the Australian government expects a permanent exemption to be implemented.

Ciobo will travel to the US this week for a series of G’Day USA events to promote Australian trade, tourism and investment opportunities and an Anzac Day event in New York. A spokesman for Ciobo denied the trip was a last-ditch attempt to lobby over the steel tariff deadline.

The Australian Industry Group chief executive, Innes Willox, told Guardian Australia it was “aware that the formal ratification of Australia’s exemption from the steel and aluminium tariffs applied by the USA has not yet been completed”.

He added that “We are hopeful that a new proclamation confirming Australia’s exemption will be made in the coming days, however, based on past experience, if the necessary instruments are not ready by 30 April, we expect that there will be an announcement extending our exemption by another 30 days.”

“We hope that any uncertainty that has been created is resolved quickly for Australian industry.”

On 23 March when the White House first declared that the steel tariff exemptions would only be temporary, Willox was a fierce critic of the “whimsical policy shifts” in US trade policy, but Australian government assurances appear to have settled nerves among some business groups.

The Australian Chamber of Commerce and Industry chief executive, James Pearson, said it understands that the Australian government “is working to ensure that the concessions to Australia remain in place”.

Source : The Guardian

voda 27 april 2018 15:11

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Numetal moves to NCLAT over Essar Steel

Business Line reported that Numetal Mauritius, backed by Russia’s VTB Bank, moved the National Company Law Appellate Tribunal (NCLAT) on Thursday claiming that rival ArcelorMittal should not be permitted 30 days to “cure its deficiency” in order to be eligible to bid for Essar Steel. The case will come up for hearing on Friday.

Numetal pointed out that insolvency rules introduced in November 2017 bar promoters with loan defaults from bidding for stressed assets. ArcelorMittal, which had a stake in the debt-laden Uttam Galva, had placed a bid for Essar Steel this February.

Numetal said the Ahmedabad bench of the National Company Law Tribunal (NCLT) had disqualified Arcelor Mittal India Ltd from bidding for Essar Steel on the grounds that it was a promoter company of firms that had defaulted on payment of bank loans. The NCLT had, however, “erred” in permitting ArcelorMittal India Ltd to cure the ineligibility by making payment of the overdue amounts of Uttam Galva and KSS Petron within 30 days

A legal source close to Numetal said “Instead of repaying the defaulted amount, ArcelorMittal sold its shares in Uttam Galva to make itself eligible. Why give 30 days now after the CoC already rejected its bid?”

Sources close to ArcelorMittal said: "There seems to be no end to the lengths Numetal will go to prevent ArcelorMittal being selected as the new owner for Essar Steel. Media reports suggest ArcelorMittal has made a superior offer and they have always maintained they are eligible. Furthermore, they are the world's leading steel company and, in partnership with Nippon, clearly have all the industrial knowledge and experience to provide Essar with a strong future. It is disappointing for the stakeholders of Essar Steel that there will be further attempts to delay a swift resolution.”

Source : Business Line

voda 27 april 2018 15:14

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Steel mills shut as Xuzhou ramps up environmental inspections - Report

Reuters reported that at least three steel mills in China’s city of Xuzhou in Jiangsu, the nation’s No 2 steelmaking province, have suspended operations as factories scramble to cut emissions as part of a tough environmental crackdown. The plants have combined capacity to produce 4.25 million tonnes per year of steel, a third of the city’s capacity.

An executive at one of the mills said local authorities have ordered all steel plants in the city to close until they meet the latest tough requirements aimed at cleaning the city’s notoriously toxic air.

An official told Reuters “Xuzhou Dongnan Steel Industrial Co Ltd, one of the city’s biggest steel mills by production capacity, is temporarily closed for maintenance.”

Source : Reuters

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voda 27 april 2018 15:18

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Competition Council approves Tata Steel's acquisition of Bhushan Steel

Business Standard reported that fair trade regulator CCI has given its approval to Tata Steel's acquisition of debt-ridden firm Bhushan Steel. In a tweet, the regulator said it finds no Appreciable Adverse Effect on Competition (AAEC) in respect of Tata Steel's proposed acquisition of Bhushan Steel".

Last month, Tata Steel said it had won the bid to acquire Bhushan Steel under the insolvency process. Under the insolvency process, the Committee of Creditors (CoCs) had declared Tata Steel as the successful resolution applicant for Bhushan Steel.

Source : Business Standard

voda 27 april 2018 15:24

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JFE to spend USD 9 billion in three years to upgrade aging steel mills

Reuters reported that JFE Holdings Inc, parent of Japan’s second-biggest steelmaker, will spend JPY 1 trillion (USD 9.1 billion) in the next three years mainly to upgrade ageing local mills but it also plans to step up overseas investment. JFE outlined its three-year plan to March 2021 on Thursday, saying it included JPY 900 billion in domestic capital spending, up 6 percent from expenditure in the previous three years. JFE said it planned to invest JPY 100 billion yen overseas in the next three years, amounting to 10 percent of total pending.

But JFE President Eiji Hayashida said the firm was ready to invest more than 100 billion yen if attractive overseas deals came up, adding that this could boost total spending. He said “Given our balance sheet, we will be financially viable to spend over 1 trillion yen,” he told a news conference, adding the 900 billion yen budget to upgrade domestic plants would not be reduced as those plants needed to raise productivity and become more competitive.”

His company could spend an extra 200 billion to 300 billion yen on top of the 100 billion yen for overseas deals without hurting its financial health, Hayashida told Reuters after the conference.

Under the new business plan, JFE aims to raise average annual recurring profit for the next three years to 280 billion yen, against 216.3 billion yen for the year ended March 31, and boost its dividend ratio to 30 percent, up from its current target of 25 percent to 30 percent.

The higher budget follows a strategy unveiled by its bigger rival Nippon Steel & Sumitomo Metal in March that earmarked 1.7 trillion yen for domestic capital expenditures, up from 1.26 trillion yen in the previous three years.

Source : Reuters

voda 27 april 2018 15:25

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Celsa Barcelona chooses direct oscillation drive from SMS Concast

Cia Española de Laminación SLBarcelona, Spain, has awarded SMS Concast, a company of SMS group. The order for the upgrade of their existing beam blank caster. The six-strand machine, built by Concast in 2000, casts billet, bloom and beam blank sections of various sizes. It was originally designed for a nominal capacity of more than 1,000,000 tons per year, provided with a prepared seventh strand and the possibility to increase production accordingly. Against the backdrop of new market requirements, CELSA decided to take measures to improve the plant’s productivity and expand the product portfolio. To this end, the seventh strand is now going to be equipped with the CONDRIVE oscillation drive for beam blanks and the primary water cooling plant will be upgraded.

CELSA chose to install a new generation of mold oscillation mechanism: the CONDRIVE electrical direct drive, which is part of SMS Concast’s Industrie 4.0 portfolio. The CONDRIVE technology is based on the principle of a direct servo drive motor. The system is virtually maintenance-free and provides excellent precision in controlling the oscillation torque. Unlike other drive systems for oscillation (including hydraulic servo cylinders), the CONDRIVE combines simple design with online adjustment and monitoring of the oscillation curves.

The project schedule for the upgrade is very tight: the installation of the new equipment is planned to be completed by the end of 2018. CELSA plans to install the CONDRIVE on all other strands after a first trial period.

Source : Stratgic Research Institute

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voda 27 april 2018 15:25

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Mumbai NCLT adjourns Monnet Ispat case hearing till May

Economic Times reported that the Mumbai bench of NCLT on Wednesday adjourned until May 4 the hearing on the resolution plan for Monnet Ispat and Energy, with the judge seeking clarity from the resolution professional’s counsel on a few aspects of the revival blueprint. The presiding judge, Justice BSV Prakash Kumar, questioned senior counsel for the resolution professional Ravi Kadam on the loans given out by Monnet Ispat to companies like Monnet Global and Monnet Power that are all stressed, asking the reasons for the exclusion of the loan amounts from the liquidation value of INR 2,365 crore.

Kadam’s argument was that even if the loan value of INR 935 crore were to be added to the liquidation value, according to the waterfall arrangement of creditors, only the secured creditors would benefit, leaving out the operational creditors. Without naming the company, Kumar referred to a case where the payables to the company were more than its liquidation value and on investigation, it was found out that the parties were “fictitious.”

Another aspect that caught the eye of the judge was the inclusion of a coal mine in the liquidation value of the company even though the coal ministry has terminated the agreement for the mine. The mine in question is the Gare Palma IV/7 in Chhattisgarh that was awarded to MIEL in 2015. Monnet had given a performance bank guarantee of INR329 crore for the mine issued by the State Bank of India.

The counsel agreed to give more details in the next hearing.

Source : Economic Times

voda 27 april 2018 15:26

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Nippon Steel & Sumitomo Metal report strong results for 2017-18

Nippon Steel & Sumitomo Metal Corp has posted a 71% jump in annual profit, led by healthy demand at home and higher prices of steel products. The company's recurring profit for the year to March 31 came to JPY 297.54 billion (USD 2.72 billion). Its overall net profit for the year rose 49%.

Its crude steel output for the year fell 4.6% to 40.67 million tonnes on a parent basis because of disruptions at some mills due to technical troubles and typhoons.

Source : Strategic Research Institute

voda 27 april 2018 15:28

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Trump Trade War - Canada rolls out measures to curb transshipments

AFP reported that Canada on Thursday rolled out funding and stepped up efforts to prevent the transshipment of foreign steel and aluminum into the United States and dumping in this country. The measures, announced by Prime Minister Justin Trudeau in March, include more than CAD 30 million over five years for increased border checks, and the hiring of 40 new officers to investigate trade complaints.

The Canada Border Services Agency will also gather more accurate data on imports to help better monitor trade trends and better protect our industries and workers against unfair trade

In March, Trudeau pledged to strengthen measures to block backdoor steel shipments after US President Donald Trump announced import duties of 25 percent on steel and 10 percent on aluminum.

Source : AFP

voda 27 april 2018 15:28

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Steel, sunset clause cloud NAFTA talks – Ms Chrystia Freeland of Canada

Reuters reported that Canadian Foreign Minister Ms Chrystia Freeland reiterated Canada’s opposition to proposed US steel and aluminum tariffs due to come into force next week, as pressure mounted to seal a quick deal on updating NAFTA. Ms Freeland also told reporters that Canada remained against the US idea of introducing a “sunset clause” that would allow one of the three North American Free Trade Agreement members to quit the pact after five years.

US President Donald Trump unveiled the tariffs in March but suspended them for Canada and Mexico until May 1, citing the wish to see progress at the NAFTA talks.

Ms Freeland said before the latest session of high-level talks on the agreement that “Canada’s position has been clear from the outset and that is that Canada expects to have a full and permanent exemption from any quotas or tariffs.”

Regarding the proposed sunset clause, Ms Freeland said that “our view is that this is absolutely unnecessary, noting that the trade deal already contained a withdrawal mechanism.

Source : Reuters

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voda 27 april 2018 15:32

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Indian stainless steel leads the wave of value addition in the steel industry

Mr Ratan Jindal Chairman of Jindal Stainless wrote in Business Today that “It was a year for steel. In 2017, India crossed the 100 million tonne mark in crude steel production. As for stainless steel, the country secured the second largest producer tag, next only to China. Stainless steel production in the country touched 3.6 million tonne during the year, registering an annual growth rate of 10%.

The consumption of stainless steel in a country is organically linked to its economic development. Going by India's GDP growth rate, and the fact that our per capita consumption of stainless steel is 2 kg as against the world average of 6 kg, it is evident that stainless steel has ample scope for growth. In the age of constant value addition coupled with environment consciousness, stainless steel is the most practical and optimal choice among all materials.

Throughout history, humans have been hungry for improvement. From cars to homes to public utilities, we want everything to be aesthetic and efficient. This ever-rising public aspiration in all spheres of life is the inflection point that the stainless steel industry has been looking forward to. Because stainless steel is a metal that can cater to varied present and future needs.

Unlike other alternatives including carbon steel, cement, plastics, glass, and aluminium composites, stainless steel is non-corrosive and self-repairing by its inherent nature. This validates why there has been a major transformation in the end use profile of stainless steel over the last few decades:

Automotive, Railway & Transport (ART) sector
The high strength-to-weight ratio and resistance to impact and temperature shocks makes stainless steel the most fuel efficient and safe option in the ART sector. While developed nations deploy 19 per cent stainless steel in motor vehicles, developing countries consume it to the tune of 5 per cent. This number is set to increase with the Euro VI norms kicking in by 2020, which can't be implemented without stainless steel exhausts. The Indian Railways, which plans to convert 55,000 normal train coaches to the significantly safer LHB technology, can't do so without using stainless steel coaches.

The Indian ART sector is adding value at each stage, and stainless steel is steadily gaining momentum. Jindal Stainless is already supplying material for bus bodies and fuel tanks. We're fast replacing plastics in this segment. Where plastic fuel tanks withstand temperatures up to 100 degree centigrade, those made of stainless steel can withstand up to 1000 degree centigrade. Besides, plastics are environmentally hazardous.

Architecture, Building & Construction (ABC) sector
Stainless steel ups the value game in this sector by its proven track record in longevity, non-corrosion and hygiene. The National Steel Policy 2017, therefore, emphasises use of stainless steel in public health and seismic and coastal zones.

Successful experiments in cities like Tokyo and Taipei demonstrate how distribution losses of water can reduce from around 40 per cent to 2 per cent, if we replace cement and carbon steel pipelines with stainless steel pipelines. Stainless steel plays a pivotal role in the national imperative of swachh bharat and river rejuvenation. Creating long-lasting and sturdy infrastructure for water conservation, including sewage, waste and effluent treatment plants, necessarily requires high grade stainless steel.

Growing annually at 13%, the ABC sector is teeming with opportunities. Residential and commercial real estate projects, retail spaces, entertainment avenues, hospitality, healthcare and urban infrastructure are extensively using stainless steel. There's no doubting that the foundations of smart cities will be laid in stainless steel products. The special finishes available in stainless steel, one of the latest value-adds gaining market traction in the form of coloured sheets and anti-skid floors, combine utilitarian benefits with pure aesthetic delight.

Process Industries
Maintenance free long life and flawless hygiene characteristics of stainless steel make it an ideal choice for process industries. Food processing, for instance, relies heavily on stainless steel. More and more industries, such as refineries, petrochemical, power, textile, cement, drugs, paper are switching to stainless for these reasons.

Stainless steel is increasingly being consumed to produce clean energy. Desalination, which will pave the way through future water crises, is based on stainless steel. Flue-gas desulfurization, or FGD, a process that removes sulfur dioxide from exhausts, is also impossible without stainless steel. The metal is also gaining ground in nuclear power. Jindal Stainless is one of the two stainless steel suppliers in the world selected to supply 1,100 tons of stainless steel to the prestigious International Thermonuclear Experimental Reactor's Cryostat Project in France.

The possibility of endless diversification
The high impact toughness, crash worthiness, superior weldability, formability, free maintenance, and higher elongation of stainless steel makes it a favourite choice for end users as well as manufacturers. Medical advancement, including surgical instruments, artificial stents, and knee and joint implants, draws heavily from the benefits of stainless steel. Recently, Jindal Stainless developed a special grade of high-nitrogen stainless steel for the defence sector in collaboration with Defence Metallurgical Research Laboratory.”

Source : Business Today

voda 27 april 2018 15:40

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Ovako publishes Q1 report

Ovako announced its result for the first quarter 2018. EBITDA before restructuring costs increased to EUR 41 (32) million. Revenue rose by 16 percent to EUR 271 (233) million and the sales volume rose by 6 percent to 216 (204) kton. Cash flow from operating activities amounted to EUR -4 (-3) million. In March, it was announced that Nippon Steel & Sumitomo Metal Corporation (NSSMC), one of the largest steel producers in the world, will be acquiring Ovako.

First quarter 2018 (2017)
The quarter was characterized by continued strong demand from our customers. Order intake was 10 percent higher than our sales volume and the order stock consequently continued to grow. Order intake during the quarter was higher than in the past three quarters, which reflects the persistently strong market

Sales volume rose by 6 percent to 216 (204) thousand metric tons. Growth was considerably stronger for products with a high degree of further processing

EBITDA (before restructuring costs of EUR 0 (-1) million) increased to EUR 41 million from EUR 32 million in the previous year, driven by healthy growth and continued favorable development of the product mix and sales prices. The EBITDA margin rose to 15.3 (13.7) percent

Cash flow from operating activities amounted to EUR -4 (-3) million, including paid restructuring costs of EUR 0 (-1) million

In March, it was announced that Nippon Steel & Sumitomo Metal Corporation (NSSMC), one of the largest steel producers in the world, will be acquiring Ovako. Through the acquisition, Ovako will become part of NSSMC, which is a strong industrial owner and a clear technology leader in the global steel industry. The acquisition is subject to approval by competition authorities

In March Ovako announced new financial targets to be achieved by 2020; sales volume above 850 thousand metric tons per year, EBITDA margin above 13 percent and a net debt (excluding pension liabilities) to equity ratio below 40 percent

Mr Marcus Hedblom President and CEO at Ovakosaid that "The year was off to a strong start with substantially higher revenue and earnings compared to last year. Order intake during the quarter was higher than in the past three quarters, which reflects the persistently strong market. We also received the positive news during the quarter that Nippon Steel & Sumitomo Metal Corporation (NSSMC) has signed an agreement to acquire Ovako. We will be owned by a global market leader in steel production with world-leading technology and production capacity. Backed by a strong industrial owner with the intent to expand in engineering steel, Ovako could not be in a better position. This is going to benefit both our customers and our employees."

Short-term outlook
In light of continued high industrial activity among our customers and a strong order stock, we expect sales volume in the second quarter 2018 to be higher than in the corresponding period last year.

Source : Stratgic Research Institute

voda 27 april 2018 15:42

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Ternium SA announces Q1 results

Ternium SA announced its results for the first quarter period that ended March 31, 2018. The financial and operational information contained in this press release is based on Ternium SA.'s operational data and consolidated condensed interim financial statements prepared in accordance with IAS 34 "Interim financial reporting" and presented in US dollars (USD) and metric tonnes.

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EBITDA of USD665.1 million in the first quarter 2018, 32% higher sequentially, with higher EBITDA per ton and slightly higher shipments.

Earnings per ADS of USD1.87 in the first quarter 2018, a sequential increase of USD0.95 per ADS.

Capital expenditures of USD102.4 million in the first quarter 2018, compared to USD126.5 million in the fourth quarter 2017.

Net debt position of USD2.6 billion at the end of March 2018, down from USD2.7 billion at the end of December 2017 and equivalent to 1.2 times net debt to EBITDA.

Ternium's operating income in the first quarter 2018 was USD 523.1 million, a USD 173.1 million increase compared to operating income in the fourth quarter 2017 on higher steel segment's operating margin and slightly higher steel shipments. The sequential increase in the steel segment's operating margin was mainly due to a USD45 increase in steel revenue per ton, principally as a result of higher realized prices in Ternium's main steel markets, and a slight decrease in the steel segment's operating cost per ton4. The company's steel shipments were 112,000 tons higher sequentially as a result of a 160,000-ton increase in Mexico, partially offset by a 48,000-ton decrease in Other Markets due to a higher level of slab integration among Ternium subsidiaries, and a consequent decrease in shipments of slabs to third parties.

Compared to the first quarter 2017, the company's operating income in the first quarter 2018 increased USD158.9 million, mainly due to a 1.0 million-ton increase in steel shipments and relatively stable operating margin. The year-over-year increase in steel shipments included an 836,000-ton increase in Other Markets, mostly reflecting the consolidation of Ternium Brasil's shipments in 2018, a 112,000-ton increase in Mexico, and a 100,000-ton increase in the Southern Region. Steel revenue per ton and cost per ton remained relatively stable, as higher realized steel prices in all of Ternium's markets and higher raw material and purchased slab costs were mainly offset by the consolidation of Ternium Brasil's slabs sales in the first quarter 2018.

The company's net income in the first quarter 2018 was USD 422.1 million, compared to USD198.0 million in the fourth quarter 2017. The USD 224.1 million increase in net income was mainly due to higher operating income and a lower effective tax rate, partially offset by higher net financial expenses mostly related to foreign exchange results. An 8% depreciation of the Mexican peso in the fourth quarter 2017 and an 8% appreciation in the first quarter 2018 produced significant sequential fluctuations in the effective tax rate due to changes on deferred taxes, as well as in foreign exchange results on a net short local currency position in Ternium's Mexican subsidiaries.

Relative to the prior-year-period, net income in the first quarter 2018 increased USD 111.7 million, mainly due to higher operating income, partially offset by higher financial expenses.

1. EBITDA in the first quarter 2018 equals operating income of USD523.1 million adjusted to exclude depreciation and amortization of USD142.0 million.

2. Consolidated EBITDA divided by steel shipments.

3. American Depositary Share (ADS). Each represents 10 shares of Ternium's common stock. Results are based on a weighted average number of shares of common stock outstanding (net of treasury shares) of 1,963,076,776.

4. Operating cost per ton is equal to cost of sales plus SG&A, divided by shipments.

Outlook
Ternium expects operating income to increase in the second quarter 2018 compared to the first quarter 2018, mainly due to higher operating margin, since increasing realized prices in Mexico will be only partially offset by higher cost per ton. Shipments in the company's main markets are expected to remain at healthy levels in the second quarter compared to the first quarter of the year, although consolidated shipments should slightly decrease principally as a result of lower sales of slabs to third parties, which will enable the company to increase its slab integration level.

Uncertainty in the markets regarding US trade action against imports of steel under section 232 lingers on, as many countries that were initially exempted from the 25% general tariff are negotiating specific conditions under which to maintain such exemptions, in some cases by way of import quotas. In addition, the NAFTA renegotiation process continues, and the Mexican government is analyzing the renewal of a recently expired safeguard against steel imports. Steel prices in the North American region have significantly increased year-to-date, but the outcome of these trade-related issues will have a bearing on future steel price performance in this market.

The company anticipates steel shipments in the Mexican market to remain at healthy levels after a record first quarter this year. Industrial customer demand will remain strong in the second quarter 2018, while the commercial market, which is more closely associated to the construction industry, should show some weakness. Following a significant rise in steel prices in the first quarter 2018, revenue per ton in the Mexican market should continue increasing in the second quarter as industrial customers sales contract prices gradually reset. Ternium also expects cost per ton to rise sequentially at its Mexican subsidiary, as higher prices of third-party purchased slabs gradually flow through cost of sales.

In Argentina, the company anticipates 2018 to mark the first time since 2011 that the country will have two consecutive years of economic growth, despite a significant drought that should have a negative effect on Argentina's agribusiness performance. The company expects steel shipments and revenue per ton to slightly increase in the Argentine market in the second quarter 2018 compared to the first quarter of the year.

Source : Strategic Research Institute

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voda 27 april 2018 15:43

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US Steel CEO Mr David Burritt denied bonus last year

Pittsburgh Post-Gazette reported that US Steel president and CEO Mr David Burritt did not receive a short-term cash incentive award last year, apparently because the board believed he failed to do enough to create a fair workplace. The Pittsburgh steelmaker’s proxy statement discloses that Mr Burritt was not awarded the incentive, citing his “personal responsibility for and commitment to creating a workplace climate meeting the highest standards of accountability, fairness and respect.”

Mr Burritt who received compensation valued at USD 4.7 million last year, was only one of two top-paid executives at the company not to be paid the short-term bonus. The other, former general counsel Suzanne Rich Folsom, was not entitled to one based on her separation agreement with US Steel.

Former president and CEO Mario Longhi, who announced his retirement in May shortly after the company reported a stunning USD 180 million first quarter loss, was awarded a short-term cash incentive of USD 1 million.

The awards are based on sales, cash flow, and adjusted earnings. The final award may be increased up to 30 percent or decreased or eliminated based on an executive’s performance, according to the proxy statement.

US Steel declined to provide additional information on the board’s reason for withholding the short-term bonus.

In a statement, the company said Mr Burritt “returned the corporation to profitability and the best balance sheet in recent years.”

Not receiving the bonus reflects Mr Burritt’s “sense of personal responsibility for further improvements in the corporation’s culture and his commitment to a workplace climate which balances the highest standards of accountability with fairness and respect.”

At a shareholder meeting at US Steel Tower, Mr. Burritt expressed pride in “Pivot to the People,” a workplace culture initiative he launched after succeeding Mr. Longhi last year.

After citing the financial accomplishments that sparked the troubled company’s turnaround, Mr. Burritt told the sparse crowd, He said that “One of the things we’re most proud of in the past year is Pivot to the People, adding that we’ve got to do more. There’s much more to do.”

His remarks mirrored comments in the proxy statement sent to shareholders in advance of the meeting.

Source : Post Gazette

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voda 27 april 2018 15:44

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Warning over unsolicited Steel & Tube shares offer

Radio NZ reported that a company called Zero Comission is offering NZD 1.88 for Steel & Tube shares, compared with the company's closing price on April 24 of NZD 2.06. Zero Commission is well known for making unsolicited, opportunistic offers for shares below their market value, which it says saves small shareholders costly brokerage fees.

However, Steel & Tube chief financial officer Mr Greg Smith said small retail shareholders were always the target. He said that "They from time to time write to organisations and look to contact shareholders with small holdings to buy up small parcels of shares. You'd need to talk to Zero Commission to understand their business model."

He said about 2000 shareholders in the company would likely receive an offer.

They were advised to get professional financial or legal advice before acting on the offer.

The Financial Markets Authority warned investors to be "wary" of such offers.

Source : Radio NZ

voda 27 april 2018 15:44

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Iran steel exports grows 9 times since 2013

MNA quoted Mr Mehdi Karbasian, Iranian Deputy Minister of Industry, Mine and Trade, as saying that the volume of Iran’s steel export has increased 9 times in 2017 vis à vis the volume in 2013.

Mr Mehdi Karbasian said that “Iran’s steel output was around 20 million tons out of which one million tonne was exported in 2013, but last year the export amount rose to 9 million tonnes.”

He made the remarks while addressing the CRU World Aluminum Conference 2018 underway in British capital city.

Source : MNA

voda 27 april 2018 15:46

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Billionaire Sanjeev Gupta collects iron ore deposits for the future

AFR reported that British billionaire Mr Sanjeev Gupta has been steadily accumulating iron ore deposits for the future. It's a lesson in the ups and downs of mining cycles and the need for deep pockets. The Wilgerup deposit on South Australia's Eyre Peninsula was one of two picked up last month by Mr Gupta's SIMEC Mining for a steal. No payment is required upfront but if Mr Gupta ends up developing the project into a mine to feed into the Whyalla steelworks and his ambitious global plans, he will pay a total of USD 10 million in royalty payments for Wilgerup, and a second asset, the Kimba Gap Project, to ASX-listed mining junior Centrex Metals.

Less than a decade ago when iron ore prices were booming and giants like BHP were trading at share prices of USD 47, big Chinese steel makers were brimming with enthusiasm in readiness for planned production of 1.6 million tonnes annually from Wilgerup, 30 kilometres from the town of Lock in a region known more for wheat farms.

The 10th largest Chinese steel maker, Baotou, owned an 8 % stake in Centrex and in 2009 Shenyang Orient Iron & Steel Group signed a forward sales deal to take most of the proposed production for five years.

But the dream fizzled out. Iron prices tumbled and it was too much strain for a small company with big backers to finance from scratch. Centrex managing director Ben Hammond, who took the top job in 2013, wants to look forward not backward. A global company like the Gupta Family Group, comprising Liberty House and SIMEC, with annual revenues of USD 10 billion, has the financial firepower required.

"They are the natural developer of the assets," Mr Hammond said. If GFG don't begin mining from the two South Australian deposits in the next 10 years, the two assets will be sent back to the stable of Centrex, which is now concentrating on a phosphate project in north-west Queensland.

Mr Gupta, the executive chairman of GFG, has been in the spotlight as the saviour of the Whyalla steelworks and a town of 22,000 people after acquiring the former Arrium assets which included electric arc mini-mills in Sydney, Melbourne and Newcastle. Open pit mining operations near Whyalla in the nearby Middleback Ranges also came as part of the package. But he has also been busy putting a downpayment on the future in recent months.

GFG last week became the new owner of the Tahmoor coking coal mine about 75 kilometres south-west of Sydney after buying it from global giant Glencore. It produces 2 million tonnes a year, with the coking coal an important feedstock for steel-making in blast furnaces. Mr Gupta said it would "de-risk an important feed for the Whyalla steelworks". It is also part of the broader plans by GFG to be a vertically integrated producer owning all parts of the production chain under its GreenSteel strategy. That also encompasses being an energy producer - both for the Whyalla steelworks and the broader electricity grid.

GFG's SIMEC Mining entity has also been active in the Middleback Ranges near Whyalla, having been granted extra mining leases for a future Iron Sultan mine to feed 600,000 tonnes of haematite iron ore into the steelworks, while a proposed Iron Warrior mine nearby aims to produce up to 1.5 million tonnes of iron ore for export.

Centrex chairman Mr David Klingberg is cheering Mr Gupta on from the sidelines, and said GFG were a natural owner of the iron ore deposits that Centrex had given up, because they slotted into the future global plans for the GFG business rather than relying on sales in the open market.

Mr Klingberg said that "The new owners have a need for iron ore to keep their business running." GFG's arrival on the scene was a major fillip for the Iron Triangle region centred around Whyalla, Port Pirie and Port Augusta.

Mr Klingberg said that "I think it's terrific. The whole area will get a real boost in confidence."

The Whyalla operations had an existing port facility, which had been a stumbling block for Centrex and its Chinese investors at the height of the iron ore boom who had wrestled with ways of financing a new port.

Lowering energy costs is also important to GFG. The company acquired a majority stake in battery storage and clean energy company ZEN Energy in September 2017 to advance its energy plans in Australia and deliver cheaper power to the Whyalla steelworks.

Source : AFR

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voda 27 april 2018 15:47

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Vale Q1 performance

Mr Fabio Schvartsman Chief Executive Officer commented on the 1Q18 results that “We are well positioned to generate significant shareholder value by leveraging our premium and flexible product portfolio. We are pleased that Vale has shown remarkable flexibility and performance during a very complex first quarter 2018, which was crucial to achieve the same level of EBITDA as 4Q17, despite the challenge of seasonally lower volumes”. He concluded that: “I am committed to make Vale a more predictable company. Thus, in any given price scenario, the market will be able to easily forecast Vale’s performance. This will only be possible by having full control of everything other than prices, meaning that we will have a very strict capital allocation policy, a relentless focus on performance and constant efforts to optimize our cost structure.”

1. The flexibility of Vale’s supply chain led to a record sales volume for a first quarter of iron ore and pellets, despite the challenge of seasonally lower production. Consequently, adjusted EBITDA totaled USD 3.971 billion in 1Q18, remaining practically in line with 4Q17.

2. Vale’s operational cash flow generation in 1Q18, together with the proceeds from the sale of fertilizer assets and the Project Finance in Mozambique, supported the increase in Free Cash Flow vs. 4Q17, totaling USD 5.015 billion, the best performance since 1Q11, which enabled a substantial net debt reduction of USD 3.242 billion quarter-on-quarter. Mr Mr Luciano Siani Pires Chief Financial Officer highlighted that “1Q18 was marked by our deleveraging, with net debt achieving USD 14.9 billion, the lowest level since 2Q11, while paying USD 1.4 billion in shareholder remuneration. We will reach the USD 10 billion net debt target in the short term and our sound balance sheet and strong cash generation will enable us to significantly increase shareholder remuneration.”

3. Consistent with Vale’s strategy to adopt a rigorous capital allocation process based on returns, Capital Expenditures reached USD 890 million, the lowest level for a first quarter since 1Q05, following the trend of remaining sub USD 1 billion per quarter and reinforcing Vale’s Capex guidance of USD 3.8 billion in 2018.

4. The Ferrous Minerals business had an outstanding result in 1Q18, with an adjusted EBITDA of USD 3.408 billion in 1Q18, as a result of the contributions of higher quality and average premium, which improved Vale’s realized CFR/FOB wmt price, reflecting: (i) the flexibility of the operations; (ii) the active supply chain management; and (iii) the increase of premium product share in total sales.

5. Vale’s premium and flexible portfolio of products is in a leading position to profit from the structural “flight to quality” trend. In 1Q18, Vale reached another milestone towards improving Fe content, price realization and pellets contribution that resulted in a lower iron ore fines and pellets EBITDA breakeven[2],3 of USD 30.5/dmt in 1Q18, a reduction of USD 1.7/t vs. 4Q17, and in a higher adjusted EBITDA per ton for Ferrous Minerals[3] that totaled USD 39.8/t in 1Q18, an increase of USD 3.7/t vs. 4Q17. Mr Peter Poppinga, Executive Officer for Ferrous Minerals and Coal commented that “Vale’s Ferrous division is following its well defined value over volume strategy and is progressively optimizing its price realization and margins based on its increasing proportion of premium products as well as through an active management of its global supply chain.”

6. Vale’s decision to restart Tubarão II pellet plant and the negotiation of better terms for pellet premiums averaging USD 60/wmt for the year, an increase of over USD 10/wmt vs. 2017, are reflected in its results with adjusted EBITDA for pellets amounting to USD 763 million in 1Q18, a 13% increase vs. 4Q17, and representing 19% of Vale’s total adjusted EBITDA.

7. Vale is a premium nickel player with a unique product mix and market position and was able to benefit from the higher nickel prices in 1Q18, with an adjusted EBITDA for Base Metals of USD 644 million. “We are focused on further improving the competitiveness of the Base Metals business optimizing margins and maintaining the optionality of nickel in the scenario of higher demand for Class I nickel. In 1Q18 we partially compensated the unplanned production shortcomings in the Coleman mine in Sudbury with the marketing focus on maximizing price realization over our premium product mix with higher margins”, commented Mr. Eduardo Bartolomeo, Executive Officer for Base Metals.

8. VNC registered its best result ever for the second consecutive quarter, with an adjusted EBITDA of USD 28 million in 1Q18, reflecting higher nickel and cobalt prices.

9. The results of Vale’s Coal business continued to improve in 1Q18, driven by higher realized prices, showing Vale’s effort to increase the share of contracts linked to the index reference price, which resulted in an increase of 41% in adjusted EBITDA for the Coal business, amounting to USD 104 million in 1Q18, despite lower volumes.

Vale announced a new dividend policy on March 29th, 2018, which was designed to be: (i) both aggressive and sustainable over a long period of time, (ii) applicable in any price scenario, and (iii) predictable as regards payment dates and the amount to be distributed. The policy will be effective as of the results of the first half 2018. Therefore, according to the new policy, the 1Q18 results translate into a minimum shareholder remuneration of US$ 1.033 billion, which will be further increased by applying the threshold of 30% over the adjusted EBITDA less sustaining investments to 2Q18 results, for payment in September 2018.

Source : Strategic Research Institute

voda 27 april 2018 15:48

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Hydro announced Q1 results up on higher prices

Hydro's underlying earnings before financial items and tax increased to NOK 3,147 million in the first quarter, up from NOK 2,284 million for same quarter last year. The increase mainly reflects a higher all-in metal price and higher realized alumina price, partly offset by increased raw material costs.

1. Underlying EBIT of NOK 3 147 million
2. Alunorte producing at 50% as of March 1, negotiations ongoing with Brazilian authorities
3. Higher realized all-in aluminium and alumina prices, partly offset by increased raw material costs
4. Strong result in Extruded Solutions
5. Better improvement program hit by Brazil situation, not expected to reach 2018 target
6. Karmøy Technology Pilot ramping up during first half 2018
7. 2018 global primary demand growth outlook of 4-5%, market moving towards deficit – increased market uncertainty following US tariffs, Rusal sanctions and Brazil situation

Mr Svein Richard Brandtzæg President and CEO said that "We maintain the view of a global primary demand outlook of 4-5%, expecting the market moving towards a deficit for primary aluminium in 2018."

Mr Brandtzæg said that "The US sanctions on Rusal have caused great uncertainty in the world’s aluminium markets and will impact trade flows and availability of metal and raw materials throughout the aluminium value chain. The Brazilian authorities’ embargo on Alunorte adds to the uncertainty in the aluminum industry and has led to 50 % curtailment of Albras primary plant and 50 % production at the Paragominas bauxite mine."

The 50 % production restriction at Alunorte and subsequent reduction of production at Paragominas during March had a negative impact on the results for Bauxite & Alumina in the first quarter. Underlying EBIT was similar to the first quarter of last year. The results were driven by higher realized alumina sales prices offset by higher raw material prices and reduced output at both plants.

Underlying EBIT for Primary Metal declined compared to the first quarter of last year due to higher raw material costs, partly offset by higher all-in metal prices

Mr Brandtzæg said that "The Karmøy Technology Pilot is ramping up production. We’re excited to see the world's most climate and energy efficient technology being realized, and we will continue the ramp-up during the first half of the year."

Underlying EBIT for Metal Markets increased compared to the first quarter of last year. The increase was due to higher sales volumes and margins from the remelters, higher results from sourcing and trading activities, as well as positive inventory valuation effects.

Underlying EBIT for Rolled Products increased compared to the first quarter of 2017. Increasing margins and improved production performance were partly offset by negative currency effects. Results from the Neuss smelter increased mainly due to positive effects from new power contracts, including an internal contract with Energy.

Underlying EBIT for Extruded Solutions increased compared to the pro forma underlying EBIT in the first quarter 2017, driven by improved sales volumes and margins.

Mr Brandtzæg said that "For Hydro the priority is to continue a value-creating integration of the Extruded Solutions business area. We see the business area continuing its strong track-record for improvements, delivering value-added solutions to customers all over the world."

Underlying EBIT for Energy decreased compared to the same quarter last year. The decrease was mainly due to lower production and the negative effects from the repricing of an internal power contract with the Neuss smelter. These negative effects were partly offset by higher sales prices. First quarter production was reduced due to a planned maintenance outage at one of the power plants.

Due to the situation in Brazil, Hydro's "Better" improvement program is not expected to reach the 2018 target of NOK 500 million.

Hydro's net debt position improved from NOK 4.1 billion to NOK 3.6 billion at the end of the quarter. Net cash provided by operating activities amounted to NOK 2.0 billion. Net cash used in investment activities, excluding short term investments, amounted to NOK 1.5 billion.

In addition to the factors discussed above, reported earnings before financial items and tax and net income include effects that are disclosed in the below table. Items excluded from underlying EBIT and underlying net income are defined and described as part of the APM section in the quarterly report.

Source : Strategic Research Institute

voda 27 april 2018 15:54

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Vale sent layoff notices to 169 Vale employees in Thompson, Man

CBC reported that Vale is entering its "most significant phase" of layoffs in the lead up to the planned shut down of the company's smelting and refining operations in Thompson, Man, later this summer. The company has sent layoff notices to 169 employees, said Ryan Land, manager of corporate affairs and organizational development with Vale.

Vale has been planning to stop nickel smelting and refining in Thompson for years, and the operations will officially cease July 31, the same day the layoffs are to take effect.

Vale plans to continue its mining and milling operations in Thompson, which had a population of just under 13,000 people in 2016. The city is 650 kilometres north of Winnipeg.

Despite the notices, exactly how many workers will be laid off in this round depends on how many employees accept an incentive package offered by the company to either retire or resign before the closure.

Mr Les Ellsworth, president of United Steelworkers Local 6166, said 109 workers have been offered the buyout package.

Mr Ellsworth said that "For every person that takes a package they'll rescind one letter, so if you had 169 and one person takes the package, now you got 168 and so forth."

Those offered the package have until May 18 to decide whether they'll take the offer.

Source : CBC

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