Archive | Steel and Stainless Steel Industries

POSCO to revamp non-steel ops, shun major steel investment – new CEO – by Hyunjoo Jin (Reuters India – March 14, 2014)

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SEOUL – (Reuters) – POSCO’s (005940.KS) new chief executive said the South Korean steelmaker will restructure non-steel businesses and not make any major investment in increasing steelmaking capacity, in a marked break from the strategy of his predecessor.

Incoming CEO Kwon Oh-joon, a former POSCO chief technology officer, will sell non-core assets and list affiliates after a wave of investment and acquisitions left the world’s fifth-biggest steelmaker with high debt and credit-rating downgrades.

POSCO, once one of the industry’s star performers, posted its third straight year of profit decline last year as it continued to grapple with steel oversupply and reduced customer demand brought about by recent global economic downturn.

“POSCO’s biggest task is to improve its financial structure,” Kwon said at a news briefing after starting a three-year term as chief executive and chairman. “First of all, we have to improve our core competitiveness in steel and generate profit.”

To that end, POSCO will restructure its materials and energy businesses, and focus on lithium, nickel, fuel cells and clean coal, Kwon said. Continue Reading →

UPDATE 1-India PM: POSCO to start work on steel plant in coming weeks – by Krishna N Das (Reuters India – January 16, 2014)

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NEW DELHI, Jan 16 (Reuters) – South Korea’s POSCO will be able to start work on its planned $12-billion Indian steel plant over the coming weeks, India’s prime minister said on Thursday, ending an eight year delay for environmental and legal clearances.

Manmohan Singh said the firm’s request for an iron ore mining licence – the final regulatory hurdle for the project which would be the biggest foreign direct investment in India – was at an “advanced stage of processing”.

The 12 million-tonnes-per-year plant in the eastern state of Odisha, formerly Orissa, will help world No.4 steel producer India to expand output.

India produced 77.6 million tonnes of crude steel in the past fiscal year, a fraction of top producer China’s nearly 800 million last year. India’s total iron ore reserve was estimated at 28 billion tonnes as of 2010 by the Indian Bureau of Mines.

India’s new Environment and Forest Minister Veerappa Moily last week gave approval to the plant but asked POSCO to spend 5 percent of the total investment on social commitments, which would raise the project’s cost to $12.6 billion. Continue Reading →

Japan nickel users face higher costs, supply hunt after Indonesia ban – by Yuka Obayashi (Reuters U.S. – January 13, 2014)

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TOKYO – Jan 13 (Reuters) – Japan, home to some of the world’s biggest stainless steel producers, will face higher costs and a scramble to find new nickel supply after Indonesia enforced an export ban on the raw material.

Global nickel prices and mining shares rallied a day after Indonesia banned unprocessed exports of nickel and bauxite, in a move aimed at getting higher returns for its resources by forcing companies to refine the minerals on Indonesian soil.

The law was first announced in 2009 but only a handful of firms made the downstream investments needed, betting on Indonesia backing down on the policy. Jakarta tweaked its rules on Saturday to allow copper, zinc, lead, manganese and iron ore concentrate shipments to continue.

Japan’s biggest nickel smelter, Sumitomo Metal Mining Co Ltd (SCM), said it had enough nickel ore to maintain its current production level of ferro-nickel only till May. Continue Reading →

Return of fourth player shakes EU stainless steel recovery hopes – by Silvia Antonioli, Maytaal Angel and Tom Käckenhoff (Reuters U.S. – December 11, 2013)

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LONDON/DUESSELDORF, Dec 11 (Reuters) – Just as long-awaited consolidation in Europe’s stainless steel sector seemed to offer hope of recovery in prices and profits, Finnish producer Outokumpu’s surprise sale of two plants back to ThyssenKrupp threatens to undo such gains.

Outokumpu last month announced the sale of large Italian stainless steel mill Acciai Speciali Terni and of specialty high-performance alloy unit VDM to ThyssenKrupp , their previous owner.

The deal, part of a package of measures dictated mostly by Outokumpu’s financial needs, partially reverses its acquisition of Thyssenkrupp’s stainless steel business Inoxum in 2012, a move that gave a fillip to all major European producers’ shares.

It raises the number of major European players in the loss-making industry back to four from three, which is likely to create an even tougher market environment for them as they face low prices, heavy overcapacity and competition from determined Asian exporters.

While a big player like Outokumpu can cut capacity or mothball the least efficient of several operations, ThyssenKrupp, with only two plants in the stainless sector, is likely to make use of them to keep its foothold in the market. Continue Reading →

ThyssenKrupp Is Stuck in Steel – by RENÉE SCHULTES (Wall Street Journal – December 2, 2013)

http://online.wsj.com/home-page

It Isn’t Clear How Costly Retaining Some of Its Assets Recently Might Be Longer Term

For ThyssenKrupp, TKA.XE -2.32% it is hard to escape steel. Shares in the loss-making German conglomerate dropped 8.5% Monday after it said it would raise up to a 10th of its market value in fresh equity, equivalent to about €900 million ($1.22 billion).

ThyssenKrupp’s more than decadelong project to shift its focus from volatile steelmaking to producing finished goods such as elevators has run into trouble. The company this weekend announced the sale of its U.S. steel mill but was forced to retain Brazilian mill CSA. Separately, a deal with troubled Finnish steelmaker Outokumpu OUT1V.HE -6.51% means ThyssenKrupp takes back two European assets it sold only a year ago.

Investors can hardly feel galvanized to buy in.

ThyssenKrupp had few alternatives. Selling its Americas business would have drawn a line under a misplaced attempt to make steel cheaply in Rio de Janeiro and ship it to the U.S. for processing, a strategy undone by rising production costs in Brazil. But CSA’s onerous supply contract with iron-ore miner Vale made potential buyers wary. Continue Reading →

UPDATE 2-Finland’s Outokumpu announces major financing plan, divests assets – by Jussi Rosendahl (Reuters India – November 30, 2013)

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HELSINKI/FRANKFURT, Nov 30 (Reuters) – The world’s No. 1 stainless steel maker Outokumpu said it planned to raise 650 million euros through a rights issue and divest assets back to ThyssenKrupp in an unexpected package of steps aimed at shoring up its finances.

The move will partly reverse Finnish Outokumpu’s 2012 acquisition of Thyssenkrupp’s stainless steel business Inoxum as it transfers a large steel plant in Terni, Italy, and high-performance alloy unit VDM back to the German group.

Outokumpu has been hit hard by Europe’s economic slowdown and by overcapacity in the industry, pushing up its debt and leading to speculation that it may need more cash from its shareholders.

The assets will be transferred to ThyssenKrupp in exchange for the cancellation of a 1.25 billion euro ($1.7 billion) loan note that Thyssen granted to Outokumpu when their original deal was done in 2012. Continue Reading →

Mittal’s Aperam ups bid for Outokumpu’s Italian steel mill – by Silvia Antonioli (Reuters U.K.- November 21, 2013)

http://uk.reuters.com/

LONDON – (Reuters) – A consortium led by stainless steelmaker Aperam APAM.L has raised its bid for Italian steel plant Terni that its competitor Outokumpu has to sell, a deal that would reshape the European stainless steel industry.

The consortium, including Italian steelmakers Arvedi and Marcegaglia, submitted the higher bid last week – because Outokumpu sees all bids so far as too low – and it is valid until Friday, two sources with knowledge of the situation said.

Finland’s Outokumpu (OUT1V.HE) agreed to sell the Acciai Speciali Terni plant more than a year ago to gain approval for its purchase of ThyssenKrupp’s (TKAG.DE) Inoxum unit.

The plant – considered one of Europe’s most advanced stainless steel mills – is of strategic importance due to its vicinity to steel buyers in Italy, a major steel market, but its profitability has been hard hit by a slump in the steel market.

Loss-making Outokumpu faces a massive writedown on Terni, which is valued at more than 560 million euros ($750 million) on its book but is expected to sell for a fraction of that. Continue Reading →

PRESS RELEASE: Outokumpu Chief Medical Officer Markku Huvinen’s long-term study published in British Medical Journal

OUTOKUMPU OYJ

November 21, 2013 at 3.30 pm EET

British Medical Journal has published an article by Outokumpu’s Chief Medical Officer Markku Huvinen. The article is based on his 30-year study and reports its findings on cancer incidence among ferrochrome and stainless steel production workers in Kemi and Tornio, Finland. The study shows that there is no added risk of cancer to individuals working in steel mills and living nearby.

Says Outokumpu CEO Mika Seitovirta: “We are extremely proud of Markku’s research and the work done by our health and safety team. Markku initiated the first systematic measurement in the world on the exposure to chromium and other compounds connected with stainless steel production. Safety comes first in all our operations – we want our employees to return home safely at the end of their working day. If we cannot remove all risks, we make every effort to control them.”

The study assesses the risk of cancer, especially cancers of the lung and nose, since the start of the production in 1967 until 2011. The overall cancer incidence was similar as in general in the same region, and the lung cancer risk was actually lower.

Says Markku Huvinen: “When I started as doctor at Outokumpu in 1970s, one of the ferrochrome smelter workers came to my office, blew his nose and asked me, ‘What does this dust do to my health?’ Continue Reading →

US Steel ends 103 years of steelmaking in Hamilton – by Meredith MacLeod (Hamilton Spectator – October 30, 2013)

http://www.hamiltonnews.com/

Hopes that Hamilton’s U.S. Steel blast furnaces will fire up again have burned out, along with more than a century of steel production at the plant.

The announcement Tuesday that U.S. Steel will permanently cease making iron and steel in Hamilton has been feared since the company idled the mills in October 2010. The final blow came when CEO Mario Longhi told investors Tuesday those operations will wrap up Dec. 31.

“Decisions like this are always difficult, but they are necessary to improve the cost structure of our Canadian operations,” he said. Tuesday’s announcement does not affect rolling, coating and finishing operations, along with coke making, according to Pittsburgh-based U.S. Steel.

Forty-seven non-union jobs will be lost, but company spokesperson Courtney Boone said it would try to move staff into other positions. That leaves approximately 600 members of United Steelworkers Local 1005 and about 228 salaried positions at the Hamilton plant. Continue Reading →

U.S. Steel ends an era in Hamilton – by Greg Keenan (Globe and Mail – October 30, 2013)

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 — United States Steel Corp. will permanently cease steel production at its Hamilton mill at the end of the year, ending an era that goes back more than a century.

The blast furnaces at the massive Hamilton Works site have been on what U.S. Steel calls “temporary idle” since late 2010. The permanent closure will leave just a coke-making operation, a cold mill that processes steel from the Nanticoke, Ont., operations and the company’s Z-line galvanizing operation, which finishes steel for automotive customers and others.

“Decisions like this are always difficult, but they’re necessary to improve the cost structure of our Canadian operations,” Mario Longhi, president of U.S. Steel said on a conference call for the company’s third-quarter financial results Tuesday.

The permanent end of steel making in what was the cradle of the Canadian steel industry is the latest step in what has been a troubled history for U.S. Steel with the operations of the former Stelco Inc., which it took over in 2007. Each set of negotiations with members of the United Steelworkers union in Hamilton or Nanticoke, Ont., led to lockouts of workers. Continue Reading →

Outokumpu asks EU to let it keep Italian steel plant: sources – by Silvia Antonioli and Maytaal Angel (Reuters India – October 22, 2013)

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LONDON, Oct 22 (Reuters) – Finnish stainless steel maker Outokumpu has asked the European Commission to let it keep the Italian steel plant the company agreed to sell to gain approval for its purchase of ThyssenKrupp’s Inoxum unit.

The Acciai Speciali Terni plant has been valued at more than 500 million euros ($677 million) by Outokumpu, but is now expected to sell for less than that due to weakness in the global steel market.

Two sources familiar with the matter told Reuters that Terni, one of Europe’s biggest and most modern plants, will lose 80-100 million euros this year, and that Outokumpu believes it is not anti-competitive to keep it under current conditions.

The Terni plant, about 100 km (62 miles) north of Rome, was valued by one analyst at up to $1 billion over a year ago. “They have been trying to convince the EU that they should keep Terni since the market situation has completely changed from last year – the sector got much worse,” an industry expert said.

Refraining from selling the plant could allow more flexibility in valuing it, the expert said, leading to a lower writedown in the company’s books. Continue Reading →

Small stainless steel industry in Canada – by Stan Sudol (Sudbury Star – October 17, 2013)

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

Re: From ore to steel, column by Stan Sudol — Aug. 31.

In my column on the potential of a stainless steel industry in Ontario, I mistakenly said that there is no stainless steel industry in Canada. I was given incorrect information. I should have said, “At the present time, there is no ‘major’ stainless steel production in Canada.”

Gratefully, ASW Steel Inc. president Tim Clutterbuck contacted me and indicated that his Welland, Ont.-based specialty steel facility dedicates 30% of its production capacity to stainless steel. The company employs about 95 employees and manufactures roughly 100,000 tonnes of specialty steel products annually, of which 30,000 tonnes are stainless steel ingots and billets, that are exported to the U.S. and Europe.

By comparison, Outokumpu, the biggest international producer, manufactures almost 3.6 million tons of stainless steels worldwide, slightly over 10% of the 35.4 million tonnes of global production last year, according to International Stainless Steel Forum preliminary figures. Continue Reading →

Northern MLA’s: Lead now or leave [northern Ontario stainless steel] – by David Robinson (Northern Ontario Business – October 2013)

Established in 1980, Northern Ontario Business  provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North.  

Dave Robinson is an economist with the Institute for Northern Ontario Research and Development at Laurentian University.[email protected] 

Northern MP’s have come to a time of reckoning. They hold the balance of power in Ontario. The five NDPers and one conservative can change the North. In the next few months we get to see if they have the vision and the guts to act.

The provincial legislature has 107 members. There are 50 Liberals. Any four Northern members can make a deal with Catherine Wynne: Give us one really big win for the north and we’ll give you one more year of power.

There are several policies that are worth breaking party lines for. Leaving resource revenues in the north, creating a regional government, control of Ontario Northland and northern transportation policy, and especially the big one, creating a stainless steel industry for the North based on the Ring of Fire.

If Northern MLA’s deliver any one of these changes they will be heros. They will own their election seats for the next 100 years. If they don’t even try, northerners should throw the toothless pussycats out. They will have thrown away the North’s future. Continue Reading →

Steel firm Outokumpu should help itself: Finland’s state fund – by Jussi Rosendahl (Reuters U.S. – September 30, 2013)

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HELSINKI – (Reuters) – Steel company Outokumpu (OUT1V.HE) should try to solve its own problems even though its heavy debts have raised the prospect it might need more money from shareholders at some stage, the head of Finland’s state investment fund Solidium said.

While Finland is often listed among the most innovative economies and remains triple-A rated, government funding is still badly needed in the country of 5.4 million people which has a limited pool of private capital. Kari Jarvinen, Solidium’s managing director, told the Reuters Nordic Investment Summit that the fund was making its long-term investment decisions independent of political pressure to help out troubled Finnish companies.

“It is better that the company tries to sort out its problems by itself. The company already had a 1 billion (euros) rights issue only one-and-a-half years ago,” Jarvinen said when asked about Outokumpu’s finances. “It is paramount that these companies find ways to be profitable in the future.”

Solidium holds stakes worth in total 7.7 billion euros in 11 Finnish listed companies including paper maker Stora Enso (STERV.HE) and investment and insurance group Sampo (SAMAS.HE). Continue Reading →

PRESS RELEASE: Outokumpu introduces new industrial plan in Europe to improve financial performance

October 1, 2013

Outokumpu announced today plans for further structural changes in its European operations aimed at improving its financial performance and efficiency, and ultimately returning the company to profitability.

While Outokumpu has already implemented significant cost savings as a result of the merger between Outokumpu and Inoxum at the end of 2012, the company’s cost structure continues to be unsustainably high in the current market environment.

Stainless steel market has remained challenging during 2013, mainly driven by the continued economic weakness in Europe and the global overcapacity in the industry. Outokumpu has continued to be heavily loss making in 2013, with a net debt of 3.0 billion euros at the end of June 2013. Industry overcapacity and imports from Asia continue to put pressure on prices and profitability and there are no signs of a material improvement in the market environment. For example, in Europe alone, there are more than 1,500,000 tonnes of overcapacity in cold rolled production. In addition, as previously stated, the Terni remedy requirement by the European Commission resulted in lower synergy potential than originally planned.

Therefore, Outokumpu is now introducing a new industrial plan and efficiency measures for its operations in Europe. Specifically, the planned changes include: Continue Reading →