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Steel and Stainless Steel Industries

U.S. Steel Canada may become independent again – by Greg Keenan (Globe and Mail – October 8, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

TORONTO — The 100-year-old steel maker once known as Stelco Inc. may become independent again after United States Steel Corp. gave up on trying to restructure the company it purchased in 2007.

U.S. Steel Canada Inc., possessing the youngest integrated steel mill in North America and an idle steel-making mill in Hamilton, would proceed on its own or be sold after U.S. Steel and its stakeholders failed to reach a deal on the future of the Canadian unit within its troubled Pittsburgh-based parent company.

U.S. Steel will not bid for the Canadian assets, but will maintain all services and arrangements that the Canadian unit requires for up to 24 months under a transition agreement the parent company put forth Wednesday at an Ontario Superior Court hearing.

“Absent a consensual restructuring or a [sales and restructuring process] transaction at this time, U.S. Steel Canada needs to bring stability to its operations while it starts the process to disengage itself from U.S. Steel as well as to work toward developing new markets and customers for its steel products,” court-appointed monitor Alex Morrison said in a report.

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U.S. Steel Canada threatens to leave Canada if court rejects request – by Greg Keenan (Globe and Mail – September 18, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

U.S. Steel Canada Inc. is threatening to cease operating in Canada by the end of the year if an Ontario Superior Court judge rejects its request to stop paying municipal taxes, halt payments into pension funds, and cut off health care and other benefits to 20,000 retirees and their dependents.

A decision by the company’s parent, United States Steel Corp., to shift production of high-value-added steel to U.S. mills means the Canadian unit requires a “business preservation order” that will allow it to keep operating, U.S. Steel Canada said in a court filing.

Unless the court approves U.S. Steel Canada’s motion to conserve cash by slashing spending, “we don’t see any way to avoid ceasing operations at the end of 2015,” the company’s president, Mike McQuade, said in a separate memo to employees.

The prospect of a shutdown of operations in Hamilton and Nanticoke, Ont., comes as U.S. Steel and its Canadian unit prepare to enter mediation efforts after a year of protection from creditors under the Companies’ Creditors Arrangement Act.

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Cheap Australian iron ore feeding China steel glut ‘like a bad virus’ – by Jasmine Ng (Bloomberg/Sydney Morning Herald – August 21, 2015)

http://www.smh.com.au/

Steel exports from China will surge to more than 100 million metric tons this year as local mills benefit from cheap iron ore to produce more than Asia’s top economy needs, according to Cliffs Natural Resources.

“It’s like a bad virus,” Lourenco Goncalves, chief executive officer of the largest US iron-ore producer, said in a phone interview from the company’s headquarters in Cleveland. “Australia continues to give iron ore to China almost for free, allowing them to produce more than they need.”

Shipments from the biggest producer are headed for a record this year as slowing local demand prompts mills to seek overseas buyers, driving down prices and spurring trade tensions from the US to India.

At the same time, the largest iron-ore miners including Australia’s Rio Tinto Group are boosting output to expand sales. China’s steel shipments were called extraordinary by Credit Suisse Group, which said last month they were now in line with total output from Japan, the No. 2 producer.

“What China is exporting alone is bigger than the second-biggest producer of steel in the world: it is crazy,” Goncalves said on Wednesday.

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Essar Steel places big bet on US iron ore – by Aaron Stanley (Financial Times – August 18, 2015)

http://www.ft.com/intl/

Hibbing, Minnesota – On an abandoned iron ore deposit just outside of Hibbing, Minnesota — the boyhood home of Bob Dylan — India’s Essar Steel is ramping up construction on a $1.9bn mining and processing facility.

On planned completion in the second quarter of 2016 it hopes to produce 7m tonnes annually of high-grade iron ore pellets for 70-80 years.

After being delayed several times by financing problems during the recession, the project — one of the largest greenfield construction projects in North America by capital expenditure — will be the first new facility in 40 years on Minnesota’s Mesabi Iron Range. The 150km stretch of the richest iron ore deposits in North America has powered the Great Lakes steel mills and US industrialisation for more than a century.

But the massive construction project comes as other US iron and steel companies cut production in the face of low global iron ore prices and cheap steel imports.

Essar, a $39bn conglomerate whose Canadian steelmaking operation recently emerged from bankruptcy protection, is placing a large bet on a new boom in US manufacturing that will create more demand for high-grade, domestically produced steel.

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Essar has been to the Sault everything that U.S. Steel has not to Hamilton – by Steve Arnold (Hamilton Spectator – August 14, 2015)

http://www.thespec.com/

Call it a tale of two steel companies. One has a record of broken promises, shuttered plants and labour relations based on confrontation. The other has a legacy of investment in a struggling company, expansion and a deep commitment to its community.

The contrasts between Essar Steel, of India, and U.S. Steel, of Pittsburgh — the foreign owners of the Algoma and Stelco mills, respectively — are stark. Small wonder then that news this week Essar is a likely bidder for the Stelco plants has caused such excitement in a mill that has endured little but bad news for the last eight years.

Both companies came to Canada in 2007 — Essar bought Algoma in April and U.S. Steel acquired Stelco in August. The prices of both deals were about the same — $1.9 billion in cash and assumed debt for Stelco and $1.8 billion in cash for Algoma in Sault Ste. Marie.

That’s where the similarities end, however. Stelco was just out of a tortured two-year restructuring under creditor protection and was owned by three hedge funds anxious to take their profits and move on to the next deal.

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U.S. Steel may have interested buyer in India-based steel maker: Report- by Jeff Green (CBC News Hamilton – August 12, 2015)

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

Essar Steel interested in bidding for both Hamilton and Nanticoke plants, according to a report

A foreign steel maker that has previously purchased a Sault Ste. Marie steel plant is interested in U.S. Steel’s Canadian operations, according to a report in the Hamilton Spectator.

Essar Steel Holdings, an India-based steel company, purchased Algoma Steel in 2007 for $1.85 billion. The company’s name curiously appeared in bankruptcy court documents a month earlier as a party to be notified about the progress and proceedings.

But the news should be met with “cautious optimism” as a formal bid has yet to be announced, said Ward 4 Coun. and steel sub-committee member, Sam Merulla.

“That would be a dream come true for our city,” Merulla added. “At this point it’s speculative.”

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Essar receives $60 M from governments – by Elaine Della-Mattia (Sault Star – July 27, 2015)

http://www.saultstar.com/

It’s being billed as the largest joint funding announcement Northern Ontario has seen in decades and could be the first of its kind since the Second World War.

And its being hailed by Essar Steel Algoma executives as an investment that will take the steelmaker into the next century, increase its output and competitiveness in the global markets, and create jobs.

In more than one year of planning and negotiations, the federal and provincial governments have joined together to provide Essar Steel Algoma with $60 million for its $240 million modernization plan.

The money includes a $30 million interest-free loan from the federal government’s Advanced Manufacturing Fund and a $30 million grant from the province’s Ministry of Northern Development and Mines and Northern Ontario Heritage Fund Corp. The company has 10 years to repay the loan.

The money will be used namely for three projects defined in the Plant Optimization and Expansion project, said Kaylan Ghosh, CEO of Essar Steel Algoma.

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POSCO may scrap planned $12 billion India steel project – by KRISHNA N. DAS AND JATINDRA DASH (Reuters India – July 16, 2015)

http://in.reuters.com/

NEW DELHI/BHUBANESWAR, INDIA – South Korean steelmaker POSCO could scrap plans for a $12 billion project it agreed to set up in India a decade ago, after a new law made it costlier to source iron ore for the plant, a company spokesman told Reuters.

The U.S.-listed shares of POSCO fell as much as 3.3 percent to their lowest in more than six and a half years after the report.

The 2005 project to set up a steel plant in Odisha state was billed as India’s biggest foreign direct investment at the time, but it has encountered a series of delays.

The company waited almost a decade to acquire land for the proposed 12 million-tonnes-a-year steel plant due to opposition from local tribal groups.

A mining law enacted in March by India means the company would now also have to buy a mining license in an auction. Originally, the Odisha government had promised to help the company obtain the licence for free.

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India overtakes US as 3rd largest steel producer, says Narendra Singh Tomar (Business Today India – July 7, 2015)

http://businesstoday.intoday.in/

India has overtaken the US to become the world’s third-largest steel producer and is working towards achieving 300 million tonnes (MT) target in the next 10 years, said Union Steel and Mines Minister Narendra Singh Tomar on Tuesday.

“So far, India was the fourth-largest steel producer in the world only after China, Japan and the US. However, during the first five months of this calendar year, India has achieved the 3rd position in the global steel production,” Tomar said.

Addressing a meeting of the Parliamentary Consultative Committee, attached to his Ministries, in Bengaluru, Karnataka, the Minister said Indian steel industry is growing at a reasonably good pace and last year the growth in crude steel production in India was more than 8 per cent.

“However, per capita steel consumption is quite low, 60 kg as against the world average of 216 kg. The low consumption no doubt indicates huge growth potential for Indian steel industry. India has fixed a target of 300 MT production capacity by 2025 and the steel ministry is working out action plan and strategies to achieve this target,” he said as per an official statement issued in New Delhi.

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Port of Algoma plan shows promise – by Elaine Della-Mattia (Sault Star – June 13, 2015)

http://www.saultstar.com/

The idea of turning Sault Ste. Marie into a transportation or trade hub has been around for more than 100 years.

Strategically located in the heart of the Great Lakes, in the centre of Canada and in close proximity to the Midwest, Sault Ste. Marie was created as a trading post.

And over the past century, the city has been mainly industry-focused, with its port locations at the city’s western edge, already well utilized to ship product and materials in and out of Sault Ste. Marie and area.

Developing A Port of Algoma, which would have direct access to rail, road and barge connectivity and utilize the expertise of Essar Ports management, could create vast regional economic potential.

The historical value of Sault Ste. Marie’s strategic location is not lost on Anshumali Dwivedi, chief executive officer of the Port of Algoma.

Dwivedi has only been in Sault Ste. Marie for a year but, as an expert on port development, he already sees the economic development potential.

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Retaining Posco in India-a challenge for Centre? – by Ashok B Sharma (The Echo of India -June 5, 2015)

http://echoofindia.com/

Prime Minister Narendra Modi’s hopes for mobilising foreign direct investments (FDIs) for bolstering growth and job creation may meet with the first casualty if the South Korean steel major POSCO takes a firm stand on withdrawing from its proposed project in Odisha. The main reason for this sorry episode would be not providing mining lease on out-of-turn basis in the spirit of the Bilateral Investment Promotion and Protection Agreement signed between the two countries way in 1996.

South Korean investments in India surged after signing of this agreement and touched $ 3.8 billion by December 2014. South Korean companies forayed into India much before the Make in India programme was officially launched by PM Modi. South Korean companies sources large parts of local contentment, thereby facilitating indigenisation.

From its manufacturing base in Chennai, Hyundai Motor India has exported about 2.2 million cars to 123 countries in five continents. Its success story is that with a total investment of $2.7 billion, its yearly turnover is about $5 billion and it has created about 1,50,000 direct and indirect employment including dealers and vendors.

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Up North Report: Inside North America’s biggest construction project – by Aaron Brown (Minneapolis Star Tribune – May 25, 2015)

http://www.startribune.com/

Construction is accelerating at the long awaited $1.9 billion Essar Steel Minnesota mine near Nashwauk, while Essar now says it’s optimistic about producing direct reduced iron products here.

In a tour of the Northern Minnesota site on May 21 with Mitch Brunfelt, Essar’s assistant general counsel and director of government and public relations, I took pictures and observed progress at the site of the biggest construction project on the Mesabi Iron Range in a generation.

This is currently the largest greenfield construction project on the continent, and it’s hard to understate the sheer size, commontion, and labor involved. The site produces a steady drone, easily heard from my home eight miles away.

After years of starts and stops, Essar now says it is finally fully financed and has increased its contractor workforce at the site. About 400 workers were on site the day I visited. Brunfelt said they will soon see 600-800 workers on site each day as summer arrives in force.

Essar has officially amended its construction timeline to reflect the realities of the company’s progress. Brunfelt said Essar engineers are now eying production of taconite by late June or July of 2016.

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Indian PM breathes life into Posco’s stalled project – by Ajoy K Das (MiningWeekly.com – May 21, 2015)

http://www.miningweekly.com/page/americas-home

KOLKATA (miningweekly.com) – South Korean steel major Posco’s plans for securing iron-ore resources for its $12-billion Indian investments have been thrown a lifeline through the intervention of Indian Prime Minister Narendra Modi.

The project, which has been hanging fire for over a decade, was given a nudge following the Prime Minister’s two-day Seoul summit with Korean President Park Geun-hye, followed by a meeting with Posco CEO Kwon Oh Joon earlier this week.

Senior officials in the Steel Ministry said that the Indian Prime Minister held a series of talks on bilateral economic issues with Korean political and business leaders, but Posco investments, almost on the verge of being scrapped, did not specifically figure during this visit.

This initially was considered a disappointment, as Posco’s plans to set up a 12-million-tonne-a-year steel plant in the eastern Indian port town of Paradip, in Odisha, linked to the Khandadhar iron-ore reserves, represented the single largest foreign direct investment in the country, the official said.

However, soon after his return, Modi was reported to have pushed for several initiatives aimed at getting the stalled project off the ground.

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Steel ‘dumping’ blamed for Iron Range layoffs – Jon Collins (Minnesota Public Radio – April 1, 2015)

http://www.mprnews.org/

Politicians and mining company officials are blaming unfair foreign competition for more than a thousand recent layoffs in the state’s iron ore industry.

U.S. Steel announced Tuesday that it would idle part of its taconite plant in Mountain Iron, Minn., starting on June 1. Earlier last month U.S. Steel announced plans to idle a plant in Keewatin, which will result in more than 400 layoffs. Magnetation also recently announced that it was closing an Iron Range plant and laying off more than 40 people.

The closing of plants and mills comes from a glut of steel supplies and the steady decline of prices over the last few months.

Following news of the most recent plant closing, Rep. Jason Metsa, DFL-Virginia, blamed the low prices on “foreign countries for dumping state-sibsidized steel on American shores.” U.S. Steel officials have also pointed to illegal trade practices by Chinese companies.

Dumping is a frowned upon international trade practice, said Tony Barrett, a professor of economics at the College of St. Scholastica. It’s when a company sells steel abroad for cheaper than the cost to produce it because they don’t need to make the same level of profits as American steel companies.

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India’s $18 Billion Mistake? – by Dhiraj Nayyar (Bloomberg News – April 1, 2015)

http://www.bloombergview.com/

A decade ago, Korean steelmaker Posco’s proposed $12 billion investment in the eastern Indian state of Odisha (then still known as Orissa) was hailed as the country’s biggest-ever foreign investment commitment, as well as a vote of confidence in India as a potential manufacturing power. Ten years later, Posco’s reported pullout is a PR debacle and a blow to Prime Minister Narendra Modi’s hopes to convince companies to “make in India.”

Worse, it’s the government’s success rather than its policy failures that appear to have driven out the steelmaker. On the heels of a lucrative auction of telecom spectrum, which garnered bids totaling a record $18 billion last week, the government is set to sell off iron ore and the rights to limestone mines by auction as well. Under the old regime, the state would have allocated these kinds of resources to industry at a nominal price. Now that the government is looking to maximize profits by putting them up for bids instead, Posco has apparently decided that the additional costs make the Odisha project unappealing.

The political logic of auctions is obvious. Under the previous Congress-led government, the opaque process of allocating resources to private companies quickly led to accusations of cronyism and corruption. Anger over the 2G spectrum scandal of 2008 and the coal scandal of 2009 played a huge role in Modi’s landslide victory last year.

Unfortunately, criticism has focused on the idea that the government gave away India’s resources too cheaply.

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