Steel and Stainless Steel Industries – Page 11

COLUMN-Stainless steel surge impacts nickel and ferro-chrome – by Andy Home (Reuters U.S. – October 11, 2016)

October 11, 2016

http://www.reuters.com/

LONDON, Oct 11 Global steel demand will rise by a meagre 0.2 percent this year, according to the World Steel Association (WSA). Next year won’t be much better with a forecast of just 0.5 percent growth. But it could have been worse. The WSA has upped its forecasts from April, when it was expecting demand to fall by 0.8 percent this year.

The improvement is all about China, where production and demand have been lifted by the government’s latest stimulus package, another push of the infrastructure and construction buttons. Within the steel universe, however, one sector is faring much better.

Stainless steel production rebounded strongly in the first half of this year, thanks again to China. And that has implications for two of the metallic inputs into the stainless production process, nickel and ferro-chrome.

Rust Never Sleeps: Who killed Stelco? – by Bruce Livesey and Nicole Mercury (Globe and Mail – September 29, 2016)

September 29, 2016

http://www.theglobeandmail.com/

The steelmaker’s corrosion began decades ago. But it took the combined efforts of Bay Street, Ottawa and U.S. Steel to finish it off

As the executives gave their spiel, Tony Clement’s blood began to boil. It was a cold Ottawa morning in the winter of 2009, and Clement was sitting in a boardroom on the 11th floor of the C.D. Howe Building, a couple of blocks from Parliament Hill. As the Harper government’s newly minted minister of industry, Clement was listening to a couple of managers from U.S. Steel Corp. indicate that they had no intention of upholding their end of a deal with Ottawa, made only two years earlier, that allowed U.S. Steel to take over Stelco, Canada’s iconic steelmaker.

The visiting executives said that brutal conditions in their business gave them no choice but to renege on their commitments to maintain Stelco in robust health.

What ticked off Clement was their cockiness. “I felt they were belligerent. They were waltzing into the office and dictating terms and not looking for any kind of mutually acceptable halfway point,” he recalls. “So I didn’t like their attitude. I didn’t like the way they were treating Canadian workers. I didn’t like the way they were treating our agreement with them.”

U.S. Steel Canada receives $500-million lifeline – by Greg Keenan (Globe and Mail – September 22, 2016)

September 22, 2016

http://www.theglobeandmail.com/

A U.S. metals and mining company is offering to invest about $500-million to purchase U.S. Steel Canada Inc. and keep the troubled steel maker operating. Bedrock Industries LP has emerged from among several contenders as the Ontario government’s preferred candidate to complete the restructuring of U.S. Steel Canada, which is now into its third year.

Miami-based Bedrock is prepared to restructure the company with a cash infusion, a pension contribution and payments to the province of Ontario and U.S. Steel Canada’s former parent, United States Steel Corp., said sources familiar with a deal reached between the province and Bedrock.

The deal is supported by the national office of the United Steelworkers union (USW) and gained qualified support from other stakeholders that have participated in the company’s saga of protection under the Companies’ Creditors Arrangement Act.

Coking coal bubble to deflate, unlikely to burst – by Clyde Russell (Reuters U.S. – September 13, 2016)

September 13, 2016

http://www.reuters.com/

LAUNCESTON, AUSTRALIA – When the price of a commodity rises by 117 percent in a mere 15 weeks, it’s generally a sign that something is amiss in the market, and coking coal’s recent stellar run is no exception to this rule. The spot price of Australian premium hard coking coal has surged from $83.40 a ton on May 31 to $180.90 on Sept. 9.

So far this year, the price of the fuel used mainly to make steel has leapt by 131 percent, making it the best performer among significant commodities. As with any price surge, there are solid reasons for a rally, but the gains have now reached a point where they have entered the realms of silliness.

Before looking at the reasons why coking coal has rallied so strongly, and why the gains will start to reverse, it’s worth noting that there are several prices for the fuel.

G20 kicks steel overcapacity can down the road again – by Andy Home (Reuters U.S. – September 7, 2016)

September 7, 2016

http://www.reuters.com/

LONDON – When G20 leaders met in the Chinese city of Hangzhou this week, they did so under, if not quite blue skies, at least smog-free skies. That’s because the Chinese authorities had ordered hundreds of industrial plants in and around the city to close.

A survey of 32 construction-steel mills in the region by industry consultancy Mysteel found almost half had either halted or curbed output since July. Such is the nature of a command economy.

What the rest of the G20 would really like to see is that same draconian action extended permanently to more Chinese steel capacity. Ideally around 300 million tonnes of it.

Because while everyone is agreed that overcapacity in the steel sector is “a global issue” requiring “a global solution”, to quote the U.S. government Fact Sheet on the G20 meet, the fact of the matter is that a large part of that steel overcapacity is in one country.

NEWS RELEASE: Trudeau Must Act to Avert ‘Irreversible Harm’ to Canadian Steel Sector

September 2, 2016

http://www.usw.ca

Steel producers, Steelworkers union call for action from Prime Minister

OTTAWA, Sept. 1, 2016 /CNW/ – Canadian steel producers and the United Steelworkers (USW) are jointly urging Prime Minister Justin Trudeau, during his official visit to China, to strongly pursue a multinational solution to a steel crisis caused by global overcapacity and unfair trade.

In an open letter to the prime minister, the Canadian Steel Producers Association (CSPA) and the USW warn of “irreversible harm” to Canada’s steel industry, which supports more than 120,000 jobs.

Meaningful solutions must be adopted internationally and on the domestic front, states the letter, signed by CSPA President Joseph Galimberti and USW National Director Ken Neumann.

STELCO SALE: Locals outraged at Ottawa’s “deafening silence” on steel industry – by Steve Arnold (Hamilton Spectator – August 23, 2016)

August 23, 2016

http://www.thespec.com/

Union leaders, Opposition MPs and even the Chamber of Commerce are pressing the federal government to help Canada’s struggling steel industry. Two Hamilton Members of Parliament, three chambers of commerce and union leaders at the local and provincial levels separately have called for help for the industry and especially for retirees and workers in Hamilton.

NDP MPs Scott Duvall (Hamilton Mountain) and Dave Christopherson (Hamilton Centre) have written to Economic Development Minister Navdeep Bains, saying the federal government has stayed on the sidelines too long.

“To date, your government has not been tangibly involved in any way to help protect the jobs, benefits and pensions of current and former employees of USSC/Stelco despite commitments previously made by colleagues and the Prime Minister,” they wrote. “Workers, pensioners, the business community and the City of Hamilton have all appealed for your help. So far, you and your government have been missing in action.”

Ontario Steel Investments bids on Hamilton plant – by Elaine Della-Mattia (Sault Star – August 9, 2016)

August 9, 2016

http://www.saultstar.com/

Ontario Steel Investments Ltd. has submitted a formal binding offer to purchase U.S. Steel Canada (Stelco). The total proposed purchase price of the offer has not been disclosed.

But the offer does include the assumption at closing of $954 million of employer liabilities under Stelco’s defined benefit registered pension plans and commitment to contribute $25 million per year towards post-employment benefits for active and retired employees, a press release states.

Ontario Steel Investments Ltd. is a new company established by Essar Global that includes a consortium of steel specialists. Ontario Steel Investments has also indicated they are interested in bidding on Essar Steel Algoma but a bid has not yet been formally presented.

Wynne says steel important to Ontario economy – by Elaine Della-Mattia (Sault Star – August 9, 2016)

August 9, 2016

http://www.saultstar.com/

Ontario Premier Kathleen Wynne said the province needs a strong steel industry – especially one that can help build infrastructure for all Ontarians.

“We are building so much in Ontario right now – $160 billion over 12 years – and there is a lot of steel in that build,” she said in an exclusive interview with The Sault Star.

She was in Sault Ste. Marie Monday as part of an 18-stop, week-long tour of Northern Ontario communities. Monday’s formal announcement dedicated an additional $120 million to modernize Northern Ontario schools, bringing a total commitment to $300 million.

KPS withdraws bids for Essar Algoma, U.S. Steel Canada – by Greg Keenan (Globe and Mail – July 15, 2016)

July 15, 2016

http://www.theglobeandmail.com/

KPS Capital Partners LP has abandoned its bids for Essar Steel Algoma Inc. and U.S. Steel Canada Inc., ending its effort to combine two Canadian steel mills that have been operating in creditor protection.

The New York-based private equity fund withdrew the bids because it was unable to reach agreements with the Ontario government, a source familiar with the matter said Thursday. The Ontario government was involved because of combined pension liabilities that exceeded $1-billion at the two steel makers, as well as unknown environmental costs.

KPS had teamed up with Essar Algoma’s term lending syndicate to make an offer that was anointed by Essar Algoma as the preferred bid. Its withdrawal from the U.S. Steel Canada sales process leaves Bedrock Industries Group LLC, another private equity fund, as the only bidder remaining in that auction.

U.S. Steel: Essar inks deal with union to buy Algoma – by Steve Arnold (Hamilton Spectator – July 12, 2016)

July 13, 2016

http://www.thespec.com/

The Indian conglomerate planning to merge Stelco and Algoma into a new Canadian steel company is refusing to surrender its dream despite being defeated in bids for both companies.

Essar Global announced this week it has signed a deal with the United Steelworkers in Sault Ste. Marie to negotiate a framework deal to acquire Algoma through a subsidiary called Ontario Steel Investment Limited.

Gaining support of the union is a requirement for a successful bid for both struggling steelmakers. Essar is the union’s preferred bidder because it has promised to maintain jobs, pay up pension deficits and restore retiree health benefits. A competing bid by a New York-based hedge fund, however, is said to have rejected paying off pension shortfalls in favour of higher returns for debt holders.

China is running out of time to cure its steel problems – by Andy Home (Reuters U.S. – June 28, 2016)

June 30, 2016

http://www.reuters.com/

China is frantically trying to apply the brakes to its runaway steel juggernaut. Targets are being set for capacity closures, 45 million tons nationally this year and 100-150 million tons over the next three to five years.

Regional governments are heeding Beijing’s call. Yunnan province, for example, has committed to eliminate 4.5 million tons of capacity by 2018. Local authorities are being urged to crack down on energy usage in the sector with those that fail to meet efficiency targets facing forced closure if they cannot improve.

A drive to consolidate the country’s fractured steel production landscape has begun with Baosteel, the second-largest Chinese operator, being pushed into a forced marriage with its smaller and financially weaker peer Wuhan Iron and Steel.

U.S. Steel Canada sale behind-the-scenes maneuvers have workers worried – by Kelly Bennett (CBC News Hamilton – June 28, 2016)

June 29, 2016

http://www.cbc.ca/news/canada/hamilton/

Steelworkers call for government intervention in sale process

Unionized steelworkers are nervously eyeing the bidders that remain in a months-long process to buy U.S. Steel Canada and take over its Hamilton and Nanticoke operations.

One bidder has reportedly been knocked out of the running to buy U.S. Steel Canada, which has been operating under bankruptcy protection through the Companies’ Creditors Arrangement Act since 2014.

A spokesman for U.S. Steel Canada said the company “won’t discuss the identity or number of participants currently involved in the process” in order to abide by a non-disclosure agreement. But spokesman Trevor Harris said the process had winnowed out at least one party due to concerns about sufficient financial strength.

China Eyes Steel Merger to Create Rival to ArcelorMittal (Bloomberg News – June 27, 2016)

June 28, 2016

http://www.bloomberg.com/

China’s second- and sixth-largest steelmakers by output have entered restructuring talks, which analysts say could presage a merger that would create the nation’s biggest mill, and a company with the scale to rival the likes of ArcelorMittal SA.

Trading was suspended in the listed units of state-run Shanghai Baosteel Group Corp. and Wuhan Iron & Steel Group Corp. as their parents discuss “strategic restructuring,” the companies said in statements on Sunday, without elaborating.

The two companies had a combined market value of $16.3 billion as of Friday’s close, and capacity of more than 70 million metric tons. Analysts including those at Citigroup Inc. and Mysteel Research cited the news as heralding a potential merger of the companies.

Stelco suitor shown the door by U.S. Steel Canada, sources say – by Steve Arnold(Hamilton Spectator – June 27, 2016)

June 27, 2016

http://www.thespec.com/

Essar Global looks to be out; two investment funds said to be contenders

The pool of suitors for the former Stelco has been cut to two. Sources confirm the board of directors of U.S. Steel Canada has rejected a bid for the troubled company from Essar Global, the India-based conglomerate that owns Essar Steel Algoma in Sault St. Marie.

USSC spokesperson Trevor Harris said in an email exchange: “We continue to respect the integrity of the process and the (non-disclosure agreements) so won’t discuss the identity or number of participants currently involved in the process.

“However, I can confirm that certain parties previously involved are no longer involved in the sales and investor solicitation process, following a conclusion that they would not be able to complete a qualified bid that could result in a going-concern solution.”