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)

Dazhou Steel to produce 3 million tonnes of finished steel in 2011

Monday, 21 Feb 2011

It is reported that Sichuan Province based Chinese steel producer Dazhou Iron and Steel in 2011 aims to produce 3.1 million tonnes of finished steel and achieve sales revenues of CNY 21.5 billion.

In January this year, Dazhou Steel produced 274,519 tonnes of crude steel up by 87.58%. The steel maker's finished steel output in January amounted to 314,100 tonnes while its sales revenues for the month came to CNY 1.29 billion

Dazhou Steel also stated that in 2010 it upgraded its production facilities, with its converter No 2 and converter No 3 both of 120 tonnes capacity starting production in April and October respectively. As a result, Dazhou Steel can now produce 3.0 million tonnes to 3.5 million tonnes of crude steel per year.

(Sourced from www.steelorbis.com)

Watchdog suspends ArcelorMittal's mine in Ukraine

Mon Feb 7, 2011 4:08pm GMT
KIEV Feb 7 (Reuters) - Ukraine's industrial safety watchdog has suspended coal production at a mine belonging to the country's biggest steel mill ArcelorMittal Kryvy Rih (ISPA.AS: Quote) (MT.N: Quote), the company said on Monday.
The company declined to comment on the consequences of the suspension for its steel production.
Ukrainian media said that a possible destruction of a road which ran above the mine's working zone was the reason for the watchdog's decision. ArcelorMittal Kryvy Rih cut crude steel production to 450,000 tonnes in January 2011 from 534,000 in January 2010. [ID:nLDE70O1K2]
The plant, located in the city of Kryvy Rih in central Ukraine, reduced pig iron output by 16 percent to 389,000 tonnes and cut rolled steel production by 9.5 percent to 406,000 tonnes.
In 2010, the mill boosted steel production to 6.13 million tonnes from 5.04 million tonnes in 2009. (Reporting by Pavel Polityuk; editing by David Cowell, sourced:reuters)

Azarbaijan Steel posts slight increase in rebar output

Monday, 07 February 2011 15:46:38 (GMT+2)
Iranian steelmaker Azarbaijan Steel produced 373,000 mt of rebar in the first nine months of the current Iranian year (started March 21, 2010), showing just a slight increase from its rebar output of 371,000 mt in the corresponding period of the last Iranian year - according to the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO).Tags: rebar , longs , Iran , Middle East , steelmaking , production

TATA Steel to reach 10 million tonnes this year - Mr Nerurkar

Thursday, 27 Jan 2011
Mr HM Nerurkar MD of TATA Steel said that 2011 will be challenging for the company as it will be completing the ongoing expansion program to achieve 10 million tonne capacity.
Mr Nerurkar said that “Following the expansion, the official capacity will be 9.7 million tonnes, but we are confident to excel the target and achieve 10 million tones.”
He added that “However, the commissioning and operation following the expansion will be a challenging task before the employees.”

Hailing the impressive economic growth in the last two quarters, Mr Nerurkar expressed hope that the prevailing growth will continue in future. He said that the prevailing growth will help the company to achieve its expansion program and generate employment opportunity.

Despite the recent ups and downs in raw material prices, the company continued to maintain its profitability and growth owing to the efficient approach of its collieries and mines.
He asked the employees to focus more on safety, environment, quality service and technology to survive the international competition.
(Sourced from PTI)

Update on performance review of Pakistan Steel Mill

Sunday, 23 Jan 2011

The Daily Times reported that Mir Hazar Khan Bijrani Pakistan’s Federal Minister for Industries and Production said that increase in production capacity of Pakistan Steel Mill is crucial to make the entity financially resilient.
Mr Bijarani while attending a meeting held at Pakistan Steel, where update on previous and current performance of PSM was given by Mr Imtiaz Ahmed Lodhi acting CEO of PSM said that “PSM is striving to acquire its profitable position by the end of this year, good sales of its products, export of coke breeze and other profitable MoUs will help make the defence and economy strong,”
Mr Bijrani also said there is no possibility of downsizing in PSM
The committee members commended the current working of PSM and the new business plan, which resulted a positive change in sales especially the sale of PKR 3 billion achieved in previous month as compared to last 17 months. The committee showed satisfaction on the progress of current management and said that if the said business model is implemented then it is hoped that PS would again become a viable and productive entity. The committee also emphasized to use local iron ore and other raw materials to save the cost of products and saving of the foreign exchange.
The committee was briefed that, “PSM has given about PKR 100 billion in the form of taxes and duties to the government of Pakistan, and PKR 1 billion as dividend, moreover PSM doesn’t need any bailout package from the government now and soon the entity will come out from losses.”

Replying a query, acting CEO said that, “PSM is also making efforts to control the production cost of products and as per new business plan the strategy for usage of maximum local iron ore from Balochistan is implemented and about 30,000 tonnes of lump iron ore from Balochistan was purchased during this month, which is the highest quantity ever since.”
The committee members came to the point that it is a national asset with directly thousands of employees and indirectly millions of peoples of engineering industries of the country are intact with it, therefore it must be kept working in the interest of the country.
(Sourced from dailytimes.com)

China daily crude steel output surges in first ten days of January

Sunday, 23 Jan 2011

According to China Iron and Steel Association, the daily output of crude steel in the first ten days of Jan 2011 averaged 1.79 million tonnes a mild increase of 60,000 tonnes from the last ten days of December 2010.
The production level in January corresponds to an annual output of 653 million tonnes for the whole year.

The media also reported that the 76 steelmakers under CISA produced about 1.32 million tonnes of crude steel on daily average in the first ten days of January slightly higher than the record of the last ten days of last December. (Sourced from www.shihua.com.cn)

Chhattisgarh mini steel plants demand package to shut down

Sourced By Business standard by R Krishna Das

Kolkata/ Raipur December 6, 2010, 0:22 IST Mini steel plants in Chhattisgarh are demanding packages, ironically, not for survival but for closure of their units that have been passing through worst-ever crises.

The 175- odd mini steel plants in the state are on the verge of closure. But industrialists are helpless to shut down the units. They require paying the minimum electricity charges even if the unit closed down production and fail to consume even a unit of power.
A mini steel plant paying an electricity bill of Rs 50 lakh per month when on full scale production will be required to pay Rs 12 lakh every month as fixed demand charges even if it failed to consume a single unit of power, state's sponge manufacturers association President Anil Nachrani said.
The minimum charge is applicable on the industrial units that come in the category of High Tension (HT) consumers as per the Electricity Act. The industrials are demanding that the fixed demand charges levied at Rs 310 per kilovolt amperes (KVA) kilovolt amperes should be curtailed to Rs 155 per KVA.
The state government would have to incur a huge loss of over Rs 180 crore if the charge was curtailed to half, state's energy secretary Aman Singh told Business Standard. "Still, the state government is examining the plea of the industrialists before taking any decision to announce package," he added.
The steel makers are demanding package from the state government to bail out from the present crises. According to Nachrani, 50 of the 175 mini steels plants have already closed production while the remaining have curtailed production by 50 per cent.
The conversion loss while making finished goods and high price of iron ore had been the reasons for plunging the steel plants in Chhattisgarh into deep crises. "The finished goods are not getting reasonable price as compared to the conversion (production) cost," Nachrani said.
Industrialists are willing to close down the units if the state government curtails the electricity charge. They believe that if they fail to earn (by continue with the production), it is wiser not to bear the loss by paying electricity charges.

Record high infrastructure investments to help boost Saudi steel output

A record high budget for 2011 announced by Saudi Arabia last week will boost domestic steel production as it allocates large funds for infrastructure projects, the Gulf Kingdom's largest bank said on Tuesday.
In 2010, Saudi Arabia's crude steel output was estimated at around 4.6 million tonnes, nearly 0.3 per cent of the world's total steel production of around 1,392 million, National commercial bank( NCB) said in a study.
The study, sent to Emirates 24/7, said the kingdom's steel production this year was nearly eight per cent higher than in 2009.
Citing data by the 66-nation World Steel Association, the report showed total global steel output stood at 114 million tonnes in November 2010, an increase of around 5.1 per cent over November 2009.
Saudi Arabia, the world's top oil exporter, ranked second out of total steel production in the Middle East for the first eleven months of 2010, accounting for 27 per cent, following Iran's production of 10.9 million tonnes, NCBNCB said.
It noted that Saudi Arabia's highest steel producing month during 2010 was that of January, the same month the Saudi Government re-imposed the five per cent custom duty to streamline domestic demand.

"In November, the Kingdom's steel production had decreased by around 18 per cent to 388,000 tonnes. However, the year-on-year increase in the Kingdom's production reflects the gradual return of pace to construction activity in the domestic economy," the study said. "The Kingdom's budget released last week, with its emphasis on infrastructure projects will translate into increasing demand for steel in 2011, coupled with the potential demand emanating from the much talked about railway projects. Domestic steel prices are likely to hover around USD3,200 per metric tonne."
Saudi Arabia's production of steel, cement and other construction materials is expected to rise in the next few years as the country is pushing ahead with expansion projects to meet a steady increase in domestic demand and export the surplus as part of an economic diversification programme.
Other Arab countries have launched expansion plans and new projects to increase their steel output and this will push up the overall steel production in the region from around 20 million tonnes in 2009 to 30 million tonnes in 2014.
In recent comments, an Arab industry official said regional nations are considering the creation of a giant steel company that will ensure the growing domestic needs of the metal and face strong foreign competition.
"The Arab iron and steel companies are planning to set up a giant alliance to invest in steel and iron so it will be an influential force in providing the region's needs of these metals and market its products," said Chairman of the Algiers-based Arab Iron and Steel Union (AISU) Hilal Al Tuwariki "Scores of Arab iron and steel firms have agreed on the general principle of this company and its future plans, which include expanding its market share and competing with foreign companies...more Arab firms are expected to join it."

Courtsey news via Emirates 247 2011.