Friday, 17 Feb 2012
An executive of Vale said that Vale, the world's largest iron ore producer, made 80% of sales of the mineral in the fourth quarter at spot prices.
(Sourced from Reuters)
Showing posts with label Q4. Show all posts
Showing posts with label Q4. Show all posts
Friday, February 17, 2012
Monday, December 12, 2011
Vale iron ore pricing brings profit damage forward
Monday, 12 December 2011
Vale's revenue from iron ore is expected to take a big hit in the fourth quarter after the Brazil-based miner agreed with most customers to switch to an iron ore pricing system that more immediately reflects a tumble in spot prices.
The price system switch will cost Vale about $1.5 billion in revenue from iron ore sales this quarter, compared with what the miner would have made by sticking to the previous pricing system, according to a Reuters calculation.
This decline in revenue would have been postponed to next quarter if the previous method had been preserved.
The switch was unavoidable for Vale, however, to prevent customers from migrating to other miners such as BHP Billiton and Rio Tinto , who offer contracts on even shorter pricing mechanisms, analysts said.
"Under Vale's former quarterly arrears pricing model, its profits in the first quarter 2012 would reflect this quarter's lower spot prices, so by renegotiating with some customers, mainly in Europe and China, in effect Vale has brought forward the damage to its profitability by three months," said Melinda Moore, principal of CleanUP Commodities Research.
"Vale's pricing methodology was unlikely to ever survive because of market volatility and because of an increasing majority of steel mill customers using more immediate pricing terms with their own downstream customers. Baosteel in China is one of the few mills pricing monthly; many others price spot or every 10 days," she added.
NEW PRICING FORMULA
Vale has agreed with nearly 80 percent of its customers to switch to a pricing method that is based on the average spot price for the quarter in which the ore is delivered, Vale's executive director of iron ore and strategy, Jose Carlos Martins, told a news conference on Wednesday.
The previous system was based on the average spot prices for the three months preceding the month before the quarter in which the delivery was due to take place.
The move was fuelled by a 31 percent plunge in spot iron ore prices in October, which prompted Asian steel producers to scour for adjustments in pricing the steel-making ingredient to more closely reflect spot rates.
Vale said looking at average spot prices so far this quarter, based on the new mechanism, contract prices should be about 20 percent lower than if they were based on the previous method.
"Iron ore is the main product for Vale, and if they are using the new mechanism, which makes prices 20 percent lower, that is a lot of money," said Patrick Cleary, CRU steelmaking raw materials consultant.
"But obviously a lot of people were unhappy with the system since spot prices started to fall. Basically this is an admission that the previous system wasn't fit to pourpose."
The pricing change also has wider implications for the market. Vale until recently had been the most cautious of the major iron ore miners when it came to price changes.
BHP Billiton, on the other hand, has never kept secret its desire to move as close as possible to spot prices.
Vale's move to the new, shorter formula in not the end of the evolution of iron ore contract pricing, which until only two years ago was based on a decades-old annual benchmark system.
Iron ore contract pricing is destined to move much closer to the spot price in the near future, analysts said.
"This is a step nearer to something that is manageable, but I think the system will continue to evolve," Cleary said. "At some stage buyers will be unhappy to use quarter averages. The next push could be for monthly contracts."
Source: Reuters
Vale's revenue from iron ore is expected to take a big hit in the fourth quarter after the Brazil-based miner agreed with most customers to switch to an iron ore pricing system that more immediately reflects a tumble in spot prices.
The price system switch will cost Vale about $1.5 billion in revenue from iron ore sales this quarter, compared with what the miner would have made by sticking to the previous pricing system, according to a Reuters calculation.
This decline in revenue would have been postponed to next quarter if the previous method had been preserved.
The switch was unavoidable for Vale, however, to prevent customers from migrating to other miners such as BHP Billiton and Rio Tinto , who offer contracts on even shorter pricing mechanisms, analysts said.
"Under Vale's former quarterly arrears pricing model, its profits in the first quarter 2012 would reflect this quarter's lower spot prices, so by renegotiating with some customers, mainly in Europe and China, in effect Vale has brought forward the damage to its profitability by three months," said Melinda Moore, principal of CleanUP Commodities Research.
"Vale's pricing methodology was unlikely to ever survive because of market volatility and because of an increasing majority of steel mill customers using more immediate pricing terms with their own downstream customers. Baosteel in China is one of the few mills pricing monthly; many others price spot or every 10 days," she added.
NEW PRICING FORMULA
Vale has agreed with nearly 80 percent of its customers to switch to a pricing method that is based on the average spot price for the quarter in which the ore is delivered, Vale's executive director of iron ore and strategy, Jose Carlos Martins, told a news conference on Wednesday.
The previous system was based on the average spot prices for the three months preceding the month before the quarter in which the delivery was due to take place.
The move was fuelled by a 31 percent plunge in spot iron ore prices in October, which prompted Asian steel producers to scour for adjustments in pricing the steel-making ingredient to more closely reflect spot rates.
Vale said looking at average spot prices so far this quarter, based on the new mechanism, contract prices should be about 20 percent lower than if they were based on the previous method.
"Iron ore is the main product for Vale, and if they are using the new mechanism, which makes prices 20 percent lower, that is a lot of money," said Patrick Cleary, CRU steelmaking raw materials consultant.
"But obviously a lot of people were unhappy with the system since spot prices started to fall. Basically this is an admission that the previous system wasn't fit to pourpose."
The pricing change also has wider implications for the market. Vale until recently had been the most cautious of the major iron ore miners when it came to price changes.
BHP Billiton, on the other hand, has never kept secret its desire to move as close as possible to spot prices.
Vale's move to the new, shorter formula in not the end of the evolution of iron ore contract pricing, which until only two years ago was based on a decades-old annual benchmark system.
Iron ore contract pricing is destined to move much closer to the spot price in the near future, analysts said.
"This is a step nearer to something that is manageable, but I think the system will continue to evolve," Cleary said. "At some stage buyers will be unhappy to use quarter averages. The next push could be for monthly contracts."
Source: Reuters
Saturday, October 15, 2011
Chinese mills offered better Q4 iron ore pricing options
Saturday, 15 Oct 2011
Reuters reported that a number of Chinese steel mills have been given the option to buy iron ore for the fourth quarter based on October to December spot rates instead of a common industry practice to buy on prices based on previous months.
Three mill sources briefed on the change told Reuters that miners, such as Vale SA have offered Chinese mills' the option to pay for fourth quarter supplies based on more current rates following the recent tumble in ore prices.
A source with one of China mid sized steel mills said "We received a letter from Vale asking us for our opinion of changing fourth quarter pricing to be based on October-December spot rates."
The spokeswoman at Vale was not immediately available for comment.
Reuters reported on Thursday that Chinese mills were seeking to postpone shipments or renegotiate fourth-quarter iron ore contracts.
Currently, prices for quarterly contracts are generally based on the average index prices over a three-month period ending a month before the start of each quarter. That means that prices for the fourth quarter would normally have been based on average spot prices from June to August when prices were higher than now.
(sourced from Reuters)
Reuters reported that a number of Chinese steel mills have been given the option to buy iron ore for the fourth quarter based on October to December spot rates instead of a common industry practice to buy on prices based on previous months.
Three mill sources briefed on the change told Reuters that miners, such as Vale SA have offered Chinese mills' the option to pay for fourth quarter supplies based on more current rates following the recent tumble in ore prices.
A source with one of China mid sized steel mills said "We received a letter from Vale asking us for our opinion of changing fourth quarter pricing to be based on October-December spot rates."
The spokeswoman at Vale was not immediately available for comment.
Reuters reported on Thursday that Chinese mills were seeking to postpone shipments or renegotiate fourth-quarter iron ore contracts.
Currently, prices for quarterly contracts are generally based on the average index prices over a three-month period ending a month before the start of each quarter. That means that prices for the fourth quarter would normally have been based on average spot prices from June to August when prices were higher than now.
(sourced from Reuters)
Thursday, March 3, 2011
Severstal positive on 2011 after Q4 loss
Thu Mar 3, 2011 9:24am GMT
* Posts Q4 loss of $352 mln vs forecast $288 mln profit
* Says Russia and CIS steel demand to grow 8 pct in 2011
* Shares up 1.48 percent
(Adds CEO comment, detail, share price)
By John Bowker and Alfred Kueppers
MOSCOW, March 3 (Reuters) - Russia's biggest steelmaker Severstal (CHMF.MM: Quote) said growing demand in both home and overseas markets would boost sales and production in 2011 after it posted a fourth quarter 2010 loss of $352 million.
The company said on Thursday that demand in Russia and the CIS would rise 8 percent in the current year, supported by investment in new infrastructure, pipelines and real estate.
It added that global prices were also likely to be strong in the first half of the year as growth in the world economy continues to fuel industrial demand, before easing in the six-month period to end December.
"Accelerating economic growth in our key markets in 2011 should produce another strong year for Severstal as demand for steel improves and raw material prices rise," Chief Executive Alexei Mordashov said in a statement.
Steelmakers in Russia, the world's third-largest producer, are benefiting from their position as leading low-cost producers after a difficult 2009 when prices and demand collapsed.
Severstal shares, which have climbed around 55 percent in the past 12 months, were trading 1.48 percent higher at 0920 GMT, compared with a 1 percent higher broader market.
MISSED FORECASTS
Severstal's fourth quarter 2010 loss was wider than the same period the previous year and some way off analysts' forecasts for a $288 million profit.
The company said in a statement the Q4 loss figure included losses relating to closed operations in North America not included in the 2009 results.
Severstal's North American arm has been the company's problem child in recent months, with the company choosing to offload assets and focus on a smaller presence.
The company on Wednesday announced the sale of three mills in the U.S. to New-York based investment firm Renco Group in a deal valued at $1.2 billion. [ID:nLDE7211HL]
Severstal last month also postponed plans for a $1.5 billion London IPO of its fast growing Nord Gold mining unit citing market conditions, and said in the statement it would now concentrate on developing the business. "We are confident that given its strong fundamentals Nord Gold will meet our predicted growth targets," Severstal said.
Overall company revenue in the fourth quarter totaled $3.73 billion, down from $3.9 billion a year ago and below a $3.98 billion poll forecast.
Severstal's full year 2010 loss came in at $577 million, down from a restated $1.04 billion loss in the crisis-hit 2009. 2010 revenue was $13.6 billion, up 41.5 percent on 2009. (Writing by John Bowker; Editing by Hans Peters,sourced:Thomson Reuters)
Friday, February 25, 2011
Return of Australian coal exports key to freight recovery: Genco
Friday, Feb25, 2011 617 am EST/1117 GMT
New York (Platts)
New York (Platts)
A return of export volumes of coking coal from the east coast of Australia and in iron ore volumes from Brazil could lead to a recovery of Capesize freight rates during the course of 2011, New York-listed dry bulk ship owner Genco Shipping & Trading said Thursday.
Speaking at the company's fourth-quarter earnings call, Robert Buchanan, president of Genco, said the disruptions caused by the severe flooding in Queensland in December and January and weather-related delays to iron ore shipments from Brazil and South Africa, accounted for approximately 5% of global coal and iron ore seaborne trade, quoting estimates from commodities and ship broking group ICAP.
He also said that a cold winter with high snowfall in the US had limited the amount of coking coal shipments from the US east coast to make up for shortfalls of shipments from Queensland.
Earlier Thursday, Asian coal consumers told Platts that Rio Tinto had lifted a force majeure on its Kestrel semi-hard coking coal brand after almost two months. A Rio Tinto Coal Australia spokesman confirmed that force majeure had been lifted from both the Blair Athol Mine in Queensland and from the Kestrel Mine.
Kestrel is believed to be the first major Australian coking coal brand to have a force majeure lifted since the flooding.
The Kestrel mine supplies 4.2 million mt of coking and thermal coal to customers worldwide.
Buchanan said the expected influx of new ships from the shipyards this year may not be as bad as appeared on paper, because of the likelihood of up to 40% slippage in delivery schedules, following a trend seen in the last few years.
He conceded that the effect of China's tightening monetary policy, in terms of increasing the capital reserve requirements of banks, and the Korea Lines bankruptcy were having a negative effect on sentiment, "but this is reflected more in the forward market."
Genco does not have any exposure to Korea Lines, which filed for the equivalent of bankruptcy protection on January 25. Korea Lines is one of Asia's largest operators of dry bulk tonnage and, according to analysts, fell victim of the collapse in freight rates, having chartered-in its fleet at much higher rates than can be obtained by re-letting the ships on the spot market.
Buchanan also predicted a hefty increase in the scrapping of dry bulk carriers, saying that 2.1 million dwt of dry bulk tonnage had already been scrapped this year compared with 5.7 million dwt in the whole of 2010.
"According to our internal company estimates, we calculate that the cash breakeven for [a fully amortized], 20-year-old Capesize is approximately $12,500/day," said Buchanan. However, the freight market is showing returns of around $4,000-$5,000/day.
Buchanan said it is the larger ships that get scrapped first, because of the wear and tear they endure compared with smaller vessels. "Think about the length and the twisting of the steel that goes on and add iron ore into the equation," he said. Iron ore exerts more stresses on the hull of a dry bulk carrier than any other cargo type.
He said that with a Capsize approaching 20 years of age, and its fifth special survey at a cost of around $3 million, with another special survey due every 2.5 years thereafter, several owners might decide that it is better to sell for scrap.
Buchanan said that 21% of the dry bulk fleet was more than 25 years old and 28% was more than 20 years of age.
He said prices offered by ship breakers were around $500/light displacement ton. "As long as the price of steel stays firm, the scrap price should stay firm," he said.
On Wednesday, Genco reported fourth-quarter net attributable income of $34.8 million, down slightly from $35.5 million a year earlier. In the full year it reported net income of $141.2 million, down from $148.62 million.
Genco saw Q4 voyage revenues climb to $129.9 million from $96.2 million a year earlier, helped by an expansion in its fleet. Total revenues were $130.7 million, up from $96.2 million a year earlier. In the full-year, voyage revenues rose to $447.4 million from $379.5 million in 2009. Total full-year revenues were $448.7 million, up from $379.5 million in 2009. (By Platts)
Speaking at the company's fourth-quarter earnings call, Robert Buchanan, president of Genco, said the disruptions caused by the severe flooding in Queensland in December and January and weather-related delays to iron ore shipments from Brazil and South Africa, accounted for approximately 5% of global coal and iron ore seaborne trade, quoting estimates from commodities and ship broking group ICAP.
He also said that a cold winter with high snowfall in the US had limited the amount of coking coal shipments from the US east coast to make up for shortfalls of shipments from Queensland.
Earlier Thursday, Asian coal consumers told Platts that Rio Tinto had lifted a force majeure on its Kestrel semi-hard coking coal brand after almost two months. A Rio Tinto Coal Australia spokesman confirmed that force majeure had been lifted from both the Blair Athol Mine in Queensland and from the Kestrel Mine.
Kestrel is believed to be the first major Australian coking coal brand to have a force majeure lifted since the flooding.
The Kestrel mine supplies 4.2 million mt of coking and thermal coal to customers worldwide.
Buchanan said the expected influx of new ships from the shipyards this year may not be as bad as appeared on paper, because of the likelihood of up to 40% slippage in delivery schedules, following a trend seen in the last few years.
He conceded that the effect of China's tightening monetary policy, in terms of increasing the capital reserve requirements of banks, and the Korea Lines bankruptcy were having a negative effect on sentiment, "but this is reflected more in the forward market."
Genco does not have any exposure to Korea Lines, which filed for the equivalent of bankruptcy protection on January 25. Korea Lines is one of Asia's largest operators of dry bulk tonnage and, according to analysts, fell victim of the collapse in freight rates, having chartered-in its fleet at much higher rates than can be obtained by re-letting the ships on the spot market.
Buchanan also predicted a hefty increase in the scrapping of dry bulk carriers, saying that 2.1 million dwt of dry bulk tonnage had already been scrapped this year compared with 5.7 million dwt in the whole of 2010.
"According to our internal company estimates, we calculate that the cash breakeven for [a fully amortized], 20-year-old Capesize is approximately $12,500/day," said Buchanan. However, the freight market is showing returns of around $4,000-$5,000/day.
Buchanan said it is the larger ships that get scrapped first, because of the wear and tear they endure compared with smaller vessels. "Think about the length and the twisting of the steel that goes on and add iron ore into the equation," he said. Iron ore exerts more stresses on the hull of a dry bulk carrier than any other cargo type.
He said that with a Capsize approaching 20 years of age, and its fifth special survey at a cost of around $3 million, with another special survey due every 2.5 years thereafter, several owners might decide that it is better to sell for scrap.
Buchanan said that 21% of the dry bulk fleet was more than 25 years old and 28% was more than 20 years of age.
He said prices offered by ship breakers were around $500/light displacement ton. "As long as the price of steel stays firm, the scrap price should stay firm," he said.
On Wednesday, Genco reported fourth-quarter net attributable income of $34.8 million, down slightly from $35.5 million a year earlier. In the full year it reported net income of $141.2 million, down from $148.62 million.
Genco saw Q4 voyage revenues climb to $129.9 million from $96.2 million a year earlier, helped by an expansion in its fleet. Total revenues were $130.7 million, up from $96.2 million a year earlier. In the full-year, voyage revenues rose to $447.4 million from $379.5 million in 2009. Total full-year revenues were $448.7 million, up from $379.5 million in 2009. (By Platts)
Olympic Steel posts $1.6 million net loss in Q4 2010
Friday, 25 February 2011
Cleveland, Ohio-based national flat-rolled steel service center Olympic Steel announced Thursday a net loss of $1.6 million for Q4 2010, compared to a $2.6 million net loss in Q4 2009. For the full year 2010, Olympic Steel recorded a net income of $2.1 million, compared to a $61.2 million net loss in 2009.
Tonnage sold increased 31 percent from 194,000 net tons in Q4 2009 to 254,000 net tons last quarter. For the full year 2010, the company sold 969,000 net tons, 34.3 percent higher than the 721,000 net tons sold in 2009.
Tags: hrc , crc , galvanized , stainless , flats , stainless , USA , fin. Reports , distribution
Tonnage sold increased 31 percent from 194,000 net tons in Q4 2009 to 254,000 net tons last quarter. For the full year 2010, the company sold 969,000 net tons, 34.3 percent higher than the 721,000 net tons sold in 2009.
Tags: hrc , crc , galvanized , stainless , flats , stainless , USA , fin. Reports , distribution
Wednesday, February 23, 2011
Ternium’s Q4 net income down $98 million
Wednesday, 23 February 2011Steelmaker Ternium announced Tuesday net income of $102.8 million in Q4 2010, a decrease of $98 million compared to Q3 2010 mainly due to a $133.9 million decrease in operating income. For the whole of 2010, Ternium's net income was $779.5 million, compared to $767.1 million in 2009.
Sales of both flat-rolled and long steel products soared in Q4 2010, increasing 43 and 56 percent, respectively, compared to Q4 2009.
For 2011, Ternium predicts accelerated growth in the NAFTA regions, with higher industrial activity in Mexico driving local demand for steel products.
Sales of both flat-rolled and long steel products soared in Q4 2010, increasing 43 and 56 percent, respectively, compared to Q4 2009.
For 2011, Ternium predicts accelerated growth in the NAFTA regions, with higher industrial activity in Mexico driving local demand for steel products.
(sourced:steelorbis)
Tags: rebar , hrc , crc , galvanized , coated , longs , flats , USA , Mexico , Venezuela , North America , South America , fin. Reports , steelmaking
Tuesday, February 22, 2011
S.Africa Q4 GDP beats forecasts on mines, agricultural sectors
Tue Feb 22, 2011 11:46am GMT
PRETORIA (Reuters) - South Africa's economic growth came in higher than expected in the fourth quarter, boosted by stronger growth in the mining and agricultural sectors, according to data released on Tuesday.
Statistics South Africa said the economy grew by 4.4 percent in the fourth quarter on a seasonally adjusted and annualised basis, compared with an upwardly revised 2.7 percent expansion in Q3. The market was expecting a 4.2 percent rise.
The rand currency firmed after the data as the market grew more certain that the central bank's rate cutting cycle was over.
On an unadjusted year-on-year basis, the economy expanded by 3.8 percent from a revised 2.7 percent in the third quarter, also above a consensus of 3.5 percent.
The statistics agency said South Africa's GDP increased by 2.8 percent in 2010, after a 1.7 percent contraction in 2009.
"We are now comfortably out of a recession but we are in an area where several things need to take place for the economy to really lift off," said Rashad Cassim, Deputy Director General of economic statistics at Stats SA.
Agriculture and mining grew by 12.5 percent and 17.1 percent respectively while manufacturing returned to growth with a 4.1 percent rise after a 5.0 percent contraction in the third quarter.
JOB CREATION WILL BE TOUGH
The wholesale, retail trade showed a 3.5 percent growth compared to 3.3 percent in the third quarter, pointing to a steady recovery in spending.
"We can see the recovery is still uneven with trade strongest, then consumption and investment taking up the rear," said Peter Attard Montalto, emerging market analyst at Nomura.
"Overall we would say this would confirm rates left on hold and be a touch stronger than SARB was originally looking for," he added.
The Reserve Bank has cut interest rates by a cumulative 650 basis points to a historical low of 5.5 percent since December 2008, in an attempt to boost growth in Africa's largest economy.
Consumer spending makes up about a third of the economy, and after the recession shed more than a million jobs, households spending is recovery slowly.
The Bank said in January it expected GDP to average 3.4 percent in 2011, a bit lower than January Reuters Econometer consensus of 3.53 percent this year and 4.22 percent by 2013.
The government has said it needs the economy to grow by between 6 and 7 percent a year, to make a dent on unemployment.
President Zuma promised job-creation will top his cabinet's agenda as citizens prepare to vote in local elections in the next few months, but analysts say it will be tough.
"You will see a marginal improvement in the labour market but the reality of this recovery is that it's subdued," said Nicky Weimer, senior economist at Nedbank.
"Job-creation depends on investment and that's not happening right now because most companies don't expect this recovery to be robust and there's also uncertainty about where policy is going," she said citing mining.
The mining sector -- a major employer in the continent's biggest economy -- faces an uncertain regulatory environment with regards to mining rights which analysts say will derail investment in the sector.
The rand was trading at 7.1935 against the dollar at 1049 GMT, from 7.2140 before the data was released at 0930 GMT. The yield on the 2015 government bond was at 7.765, from 7.77 percent prior.
Statistics South Africa said the economy grew by 4.4 percent in the fourth quarter on a seasonally adjusted and annualised basis, compared with an upwardly revised 2.7 percent expansion in Q3. The market was expecting a 4.2 percent rise.
The rand currency firmed after the data as the market grew more certain that the central bank's rate cutting cycle was over.
On an unadjusted year-on-year basis, the economy expanded by 3.8 percent from a revised 2.7 percent in the third quarter, also above a consensus of 3.5 percent.
The statistics agency said South Africa's GDP increased by 2.8 percent in 2010, after a 1.7 percent contraction in 2009.
"We are now comfortably out of a recession but we are in an area where several things need to take place for the economy to really lift off," said Rashad Cassim, Deputy Director General of economic statistics at Stats SA.
Agriculture and mining grew by 12.5 percent and 17.1 percent respectively while manufacturing returned to growth with a 4.1 percent rise after a 5.0 percent contraction in the third quarter.
JOB CREATION WILL BE TOUGH
The wholesale, retail trade showed a 3.5 percent growth compared to 3.3 percent in the third quarter, pointing to a steady recovery in spending.
"We can see the recovery is still uneven with trade strongest, then consumption and investment taking up the rear," said Peter Attard Montalto, emerging market analyst at Nomura.
"Overall we would say this would confirm rates left on hold and be a touch stronger than SARB was originally looking for," he added.
The Reserve Bank has cut interest rates by a cumulative 650 basis points to a historical low of 5.5 percent since December 2008, in an attempt to boost growth in Africa's largest economy.
Consumer spending makes up about a third of the economy, and after the recession shed more than a million jobs, households spending is recovery slowly.
The Bank said in January it expected GDP to average 3.4 percent in 2011, a bit lower than January Reuters Econometer consensus of 3.53 percent this year and 4.22 percent by 2013.
The government has said it needs the economy to grow by between 6 and 7 percent a year, to make a dent on unemployment.
President Zuma promised job-creation will top his cabinet's agenda as citizens prepare to vote in local elections in the next few months, but analysts say it will be tough.
"You will see a marginal improvement in the labour market but the reality of this recovery is that it's subdued," said Nicky Weimer, senior economist at Nedbank.
"Job-creation depends on investment and that's not happening right now because most companies don't expect this recovery to be robust and there's also uncertainty about where policy is going," she said citing mining.
The mining sector -- a major employer in the continent's biggest economy -- faces an uncertain regulatory environment with regards to mining rights which analysts say will derail investment in the sector.
The rand was trading at 7.1935 against the dollar at 1049 GMT, from 7.2140 before the data was released at 0930 GMT. The yield on the 2015 government bond was at 7.765, from 7.77 percent prior.
(sourced:Thomson Reuters)
Tags:Stats SA, investment, emerging market analyst, Nomura, SARB, Nedbank, The Rand, beats forecasts on mines
Monday, February 14, 2011
California Steel Industries Reports Fourth Quarter and Full Year 2010 Results
FONTANA, Calif., Feb. 10, 2011/PRNewswire
California Steel Industries, Inc. ("CSI") today reported profitable results for the year ended December 31, 2010, with net sales of $1.08 billion and net income of $25.4 million.
These results compare with net sales of $551.8 million and a net loss of $13.1 million for the year ended December 31, 2009.
The net loss for fourth quarter 2010 is $5.5 million, compared with a net loss of $2.3 million in fourth quarter 2009 and net income in third quarter 2010 of $2.0 million. Net sales for the quarter are $227.9 million, or 48 percent higher than fourth quarter 2009's net sales of $153.6 million, but 27 percent less than third quarter 2010's net sales of $313.9 million.
Shipments in fourth quarter 2010 are 279,641 net tons, 26 percent higher than fourth quarter 2009's shipments of 222,242 net tons and 24 percent lower than third quarter 2010 shipments of 365,608 net tons.
For the year, CSI shipped 1,335,256 net tons, 67 percent higher than 2009's shipments of 800,375 net tons.
The Company recorded $4.6 million in fourth quarter 2010 and $12.9 million in fiscal 2010 for writing down inventory to market value as CSI's inventory values are carried at the lower of cost or market (LCM).
"Fourth quarter 2010 results are normally impacted by the lower shipment levels we experience during this period each year," said Vicente Wright, President & Chief Executive Officer.
"But rather than focus on a quarter whose results are cyclical and thus typically diminished from the rest of the year, I look at the total results for fiscal 2010, and recognize the tremendous survival measures taken by our team and the resulting turnaround from 2009," he continued.
"The results for 2010 not only indicate an improvement to business conditions in the US, but also can be directly attributed to our Company's efforts to position itself to meet future changing conditions," Mr. Wright concluded.
EBITDA (as adjusted) for the quarter is $4.0 million, lower than fourth quarter 2009's adjusted EBITDA of $9.1 million, and also lower than third quarter 2010's adjusted EBITDA of $21.3 million.
For the year, EBITDA (as adjusted) is $88.2 million, 52 percent higher than 2009's adjusted EBITDA of $58.2 million.
The balance under the Company's Revolving Credit Agreement was zero as of December 31, 2010, with availability of $110 million. The Company has a cash balance as of December 31, 2010 of $27.7 million.
Results (in thousands, except for billed net tons) are as follows:
Company Information and Forward Looking Statements
California Steel Industries is the leading producer of flat rolled steel products in the western United States (the 11 states located west of the Rocky Mountains) based on tonnage billed, with a broad range of products, including hot rolled, cold rolled, and galvanized sheet and electric resistant welded pipe. Located in Fontana, California, CSI has slightly less than 900 employees. For more information, please visit our website at www.californiasteel.com.
This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Actual outcomes and results may differ materially from what is expressed herein. In evaluating any forward-looking statements, please carefully consider factors that could cause actual results to differ materially from the expectations of the company or its management. For a more detailed discussion of these factors, please see the company's most recent filings with the Securities and Exchange Commission. In particular, we direct your attention to our most recent Form 10-K, in particular Item 1 with respect to the general discussion of factors affecting our business, Item 7 with respect to "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Item 7A with respect to "Quantitative and Qualitative Disclosures about Market Risk". The company undertakes no obligation to update the forward-looking statements to reflect subsequent events or circumstances.
SOURCE California Steel Industries, Inc.
California Steel Industries, Inc. ("CSI") today reported profitable results for the year ended December 31, 2010, with net sales of $1.08 billion and net income of $25.4 million.
These results compare with net sales of $551.8 million and a net loss of $13.1 million for the year ended December 31, 2009.
The net loss for fourth quarter 2010 is $5.5 million, compared with a net loss of $2.3 million in fourth quarter 2009 and net income in third quarter 2010 of $2.0 million. Net sales for the quarter are $227.9 million, or 48 percent higher than fourth quarter 2009's net sales of $153.6 million, but 27 percent less than third quarter 2010's net sales of $313.9 million.
Shipments in fourth quarter 2010 are 279,641 net tons, 26 percent higher than fourth quarter 2009's shipments of 222,242 net tons and 24 percent lower than third quarter 2010 shipments of 365,608 net tons.
For the year, CSI shipped 1,335,256 net tons, 67 percent higher than 2009's shipments of 800,375 net tons.
The Company recorded $4.6 million in fourth quarter 2010 and $12.9 million in fiscal 2010 for writing down inventory to market value as CSI's inventory values are carried at the lower of cost or market (LCM).
"Fourth quarter 2010 results are normally impacted by the lower shipment levels we experience during this period each year," said Vicente Wright, President & Chief Executive Officer.
"But rather than focus on a quarter whose results are cyclical and thus typically diminished from the rest of the year, I look at the total results for fiscal 2010, and recognize the tremendous survival measures taken by our team and the resulting turnaround from 2009," he continued.
"The results for 2010 not only indicate an improvement to business conditions in the US, but also can be directly attributed to our Company's efforts to position itself to meet future changing conditions," Mr. Wright concluded.
EBITDA (as adjusted) for the quarter is $4.0 million, lower than fourth quarter 2009's adjusted EBITDA of $9.1 million, and also lower than third quarter 2010's adjusted EBITDA of $21.3 million.
For the year, EBITDA (as adjusted) is $88.2 million, 52 percent higher than 2009's adjusted EBITDA of $58.2 million.
The balance under the Company's Revolving Credit Agreement was zero as of December 31, 2010, with availability of $110 million. The Company has a cash balance as of December 31, 2010 of $27.7 million.
Results (in thousands, except for billed net tons) are as follows:
| Three Months Ended | Year Ended | |||||
| 12/31/10 | 12/31/09 | 12/31/10 | 12/31/09 | |||
| Billed net tons | 279,641 | 222,242 | 1,335,256 | 800,375 | ||
| Net sales revenue | $227,884 | $153,563 | $1,076,168 | $551,808 | ||
| Cost of sales | $231,510 | $151,380 | $1,013,891 | $561,120 | ||
| SG&A | $5,535 | $4,662 | $19,735 | $17,481 | ||
| Operating (loss) income | $(9,583) | $(2,935) | $41,449 | $(27,278) | ||
| Interest expense, net | $2,631 | $1,958 | $9,024 | $8,159 | ||
| (Loss) income before tax | $(11,407) | $(3,496) | $35,332 | $(26,945) | ||
| Net (loss) income | $(5,540) | $(2,291) | $25,394 | $(13,101) | ||
| Depreciation | $8,215 | $7,910 | $31,003 | $32,458 | ||
| Cash Flow Information: | ||||||
| Operating Activities | $51,724 | $(17,973) | $21,609 | $102,458 | ||
| Investing Activities | $(5,796) | $(14,662) | $(31,118) | $(46,667) | ||
| Financing Activities | $(27,700) | $(2,500) | $(24,443) | $(5,000) | ||
| EBITDA, as adjusted | $3,989 | $9,072 | $88,209 | $58,172 | ||
| A reconciliation between cash flows from operations and EBITDA and EBITDA as adjusted will be included in the Company's Current Report on Form 8-K, together with this press release. As noted in the reconciliation, EBITDA as adjusted is EBITDA adjusted to add back an inventory writedown for lower of cost or market adjustments. | |
California Steel Industries is the leading producer of flat rolled steel products in the western United States (the 11 states located west of the Rocky Mountains) based on tonnage billed, with a broad range of products, including hot rolled, cold rolled, and galvanized sheet and electric resistant welded pipe. Located in Fontana, California, CSI has slightly less than 900 employees. For more information, please visit our website at www.californiasteel.com.
This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Actual outcomes and results may differ materially from what is expressed herein. In evaluating any forward-looking statements, please carefully consider factors that could cause actual results to differ materially from the expectations of the company or its management. For a more detailed discussion of these factors, please see the company's most recent filings with the Securities and Exchange Commission. In particular, we direct your attention to our most recent Form 10-K, in particular Item 1 with respect to the general discussion of factors affecting our business, Item 7 with respect to "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Item 7A with respect to "Quantitative and Qualitative Disclosures about Market Risk". The company undertakes no obligation to update the forward-looking statements to reflect subsequent events or circumstances.
SOURCE California Steel Industries, Inc.
Wednesday, February 2, 2011
Suncor Energy Q4 profit triples
* Q4 EPS C$0.87 vs C$0.51 forecast
* Q4 Total upstream production averaged 625,600 boe a day
Feb 2 (Reuters) - Suncor Energy Inc. (SU.TO: Quote), Canada's biggest energy company, on Wednesday said fourth-quarter profit almost tripled, helped by improved margins and higher refined product sales.
Suncor, which late last year signed a deal with French oil major Total (TOTF.PA: Quote) to jointly develop several oil sands projects, reported quarterly net earnings of C$1.35 billion ($1.36 billion) or 87 Canadian cents a share, up from year-earlier C$457 million, or 29 Canadian cents a share.
Suncor had been expected to earn 51 Canadian cents a share, the average of analysts' estimates surveyed by Thomson Reuters I/B/E/S.
Cash flow almost doubled to C$2.14 billion, or C$1.37 a share, from C$1.13 billion, or C$0.72 a share, in the fourth quarter of 2009.
Suncor, known for its dominant position in the Alberta oil sands, and its rivals benefited from oil prices that averaged $85.24 in the quarter, up 12 percent from the year before. North American natural gas prices were down about a fifth, however.
Total upstream production averaged 625,600 barrels of oil equivalent a day, down from 638,200 barrels of oil equivalent a day, in the fourth quarter of 2009. ($1=.9919 Canadian Dollar) (Reporting by Fareha Khan; Editing by Erica Billingham, sourced reuters)
* Q4 Total upstream production averaged 625,600 boe a day
Feb 2 (Reuters) - Suncor Energy Inc. (SU.TO: Quote), Canada's biggest energy company, on Wednesday said fourth-quarter profit almost tripled, helped by improved margins and higher refined product sales.
Suncor, which late last year signed a deal with French oil major Total (TOTF.PA: Quote) to jointly develop several oil sands projects, reported quarterly net earnings of C$1.35 billion ($1.36 billion) or 87 Canadian cents a share, up from year-earlier C$457 million, or 29 Canadian cents a share.
Suncor had been expected to earn 51 Canadian cents a share, the average of analysts' estimates surveyed by Thomson Reuters I/B/E/S.
Cash flow almost doubled to C$2.14 billion, or C$1.37 a share, from C$1.13 billion, or C$0.72 a share, in the fourth quarter of 2009.
Suncor, known for its dominant position in the Alberta oil sands, and its rivals benefited from oil prices that averaged $85.24 in the quarter, up 12 percent from the year before. North American natural gas prices were down about a fifth, however.
Total upstream production averaged 625,600 barrels of oil equivalent a day, down from 638,200 barrels of oil equivalent a day, in the fourth quarter of 2009. ($1=.9919 Canadian Dollar) (Reporting by Fareha Khan; Editing by Erica Billingham, sourced reuters)
Thursday, January 27, 2011
Coal miner Consol Energy's profit, stock drop
Thursday, Jan 27, 2011
* Q4 adj EPS 54 cents vs Street view 55 cents
* Q4 coal revenue up 10 pct
* Stock drops 3 pct before market (Updates with CEO comments, more data, stock drops)
NEW YORK, Jan 27 (Reuters) - Coal and natural gas producer Consol Energy Inc's fourth-quarter profit fell 27 percent, missing Wall Street estimates and sending its stock down 3 percent.
The company said its coal sales jumped 10 percent and for the first time its profit from selling steel-making metallurgical coal, especially to China, exceeded profit from thermal coal which is used in power generation.
It also said it was looking to expand export markets in Asia to sell more metallurgical coal.
"We believe India has great potential and is the next market we will target for high-vol (high volatility) met coal," Chairman, President, and Chief Executive Officer Brett Harvey said in a statement.
In modest electronic trading before the New York Stock Exchange opened, Consol stock dropped 3 percent to $50.00.
Earlier this month, Consol said it mined more coal in the fourth quarter than any other quarter in 2010 as flooding in Australia restricted supply and boosted prices.
"We will continue to seek international sales opportunities where our coal can command the highest prices," said Harvey. "Consol's marketing strategy for 2011 is to continue to develop new overseas markets into which we can sell our high-vol met coal." Volatility, or the burn temperature of coal, is crucial in steelmaking.
Fourth-quarter net income was $104 million, or 46 cents per share, down from $143 million, or 78 cents per share, the Pittsburgh-based company said.
Excluding items, the company earned 54 cents per share and on that basis, missed analyst expectations of 55 cents per share, according to Thomson Reuters I/B/E/S.
Consol said total revenue was $1.34 billion, which included a 10 percent increase in coal revenue of $1.1 billion, driven by sales of 17.0 million tons.
"The combination of new sales of high-vol met coal into China and sales of our low-vol met coal enabled our annual met coal profits to exceed those from our thermal business for the first time in our history," said Harvey.
He said unit margins expanded considerably from the third quarter, as prices continued to strengthen while costs decreased by more than $5 per ton. (Reporting by Steve James and Vaishnavi Bala in Bangalore; sourced: reuters)
* Q4 adj EPS 54 cents vs Street view 55 cents
* Q4 coal revenue up 10 pct
* Stock drops 3 pct before market (Updates with CEO comments, more data, stock drops)
NEW YORK, Jan 27 (Reuters) - Coal and natural gas producer Consol Energy Inc's fourth-quarter profit fell 27 percent, missing Wall Street estimates and sending its stock down 3 percent.
The company said its coal sales jumped 10 percent and for the first time its profit from selling steel-making metallurgical coal, especially to China, exceeded profit from thermal coal which is used in power generation.
It also said it was looking to expand export markets in Asia to sell more metallurgical coal.
"We believe India has great potential and is the next market we will target for high-vol (high volatility) met coal," Chairman, President, and Chief Executive Officer Brett Harvey said in a statement.
In modest electronic trading before the New York Stock Exchange opened, Consol stock dropped 3 percent to $50.00.
Earlier this month, Consol said it mined more coal in the fourth quarter than any other quarter in 2010 as flooding in Australia restricted supply and boosted prices.
"We will continue to seek international sales opportunities where our coal can command the highest prices," said Harvey. "Consol's marketing strategy for 2011 is to continue to develop new overseas markets into which we can sell our high-vol met coal." Volatility, or the burn temperature of coal, is crucial in steelmaking.
Fourth-quarter net income was $104 million, or 46 cents per share, down from $143 million, or 78 cents per share, the Pittsburgh-based company said.
Excluding items, the company earned 54 cents per share and on that basis, missed analyst expectations of 55 cents per share, according to Thomson Reuters I/B/E/S.
Consol said total revenue was $1.34 billion, which included a 10 percent increase in coal revenue of $1.1 billion, driven by sales of 17.0 million tons.
"The combination of new sales of high-vol met coal into China and sales of our low-vol met coal enabled our annual met coal profits to exceed those from our thermal business for the first time in our history," said Harvey.
He said unit margins expanded considerably from the third quarter, as prices continued to strengthen while costs decreased by more than $5 per ton. (Reporting by Steve James and Vaishnavi Bala in Bangalore; sourced: reuters)
Wednesday, January 26, 2011
U.S.Steel narrows 4Q loss
Tuesday, January 25, 2011
United States Steel Corp. narrowed its losses in the fourth quarter to $249 million, or $1.74 per share, compared with a loss of $267 million, or $1.86 per share, a year ago.U.S. Steel Corp., which has a mill in Granite City, narrowed its losses in the fourth quarter to $249 million, compared with a loss of $267 million a year ago.
Sales for the quarter were up 28 percent to $4.3 billion.The company (NYSE: X) also narrowed its losses for the full year, reporting a loss of $482 million in 2010, an improvement over 2009, when the steel maker lost $1.4 billion.Any gains were partially offset by seasonal conditions in the fourth quarter, with a decrease in shipments and a decrease in prices, Chairman and CEO John Surma said in the earnings release.
sourced:St. Louis Business Journal from the Malia Spencer
Malia Spencer writes for the Pittsburgh Business Times, an affiliated publication.
United States Steel Corp. narrowed its losses in the fourth quarter to $249 million, or $1.74 per share, compared with a loss of $267 million, or $1.86 per share, a year ago.U.S. Steel Corp., which has a mill in Granite City, narrowed its losses in the fourth quarter to $249 million, compared with a loss of $267 million a year ago.
Sales for the quarter were up 28 percent to $4.3 billion.The company (NYSE: X) also narrowed its losses for the full year, reporting a loss of $482 million in 2010, an improvement over 2009, when the steel maker lost $1.4 billion.Any gains were partially offset by seasonal conditions in the fourth quarter, with a decrease in shipments and a decrease in prices, Chairman and CEO John Surma said in the earnings release.
sourced:St. Louis Business Journal from the Malia Spencer
Malia Spencer writes for the Pittsburgh Business Times, an affiliated publication.
Peabody Q4 profit more than doubles
Tuesday, January 25, 2011Peabody Energy said Tuesday its fourth-quarter profit more than doubled to $210 million, up from $92.2 million a year earlier, thanks to higher coal prices and volumes sold.The St. Louis coal mining company (NYSE: BTU) reported revenue of $1.82 billion for the quarter ended Dec. 31, up 17 percent from $1.55 billion in the prior-year period.For the full year of 2010, Peabody reported a profit of $774 million on revenue of $6.9 billion, up from a profit of $448.2 million on revenue of $6 billion in 2009.
Chairman and Chief Executive Gregory Boyce said Peabody delivered its second-best year in company history. While heavy flooding and rains disrupted operations in Australia, he said, they also result in "significant market upside for Peabody's unpriced metallurgical and thermal export coal beyond the first quarter."Peabody is in "expansion mode to serve the seaborne Pacific markets, which have the greatest sustainable growth opportunities and pricing leverage," Boyce said in the earnings release. He called the demand for coal for making steel and electricity in China, India and other Asian markets the start of a "long-term supercycle.""The long-term supercycle for coal is strengthening with each passing day," Boyce said. "Nations such as China and India are growing 8 to 10 percent per year off a much larger base.
Hundreds of millions of people each year are moving to the cities, switching on technologies and extending coal's role as the fastest-growing fuel."Peabody said it projects capital expenditures of $900 million to $950 million in 2011, including $500 million to $550 million earmarked for new mines, expansion and extension projects. Approximately 70 percent of the growth and expansion capital is targeted for Australia, which feeds coal to Asia, with the remainder in the United States, the company said.Last week, Peabody said it reached two deals with Chinese companies to develop coal mines and coal-powered electric plants there.
sourced:St. Louis Business Journal - by Kelsey Volkmann
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