Hasco expands flat steel range with P5600 grade

Customers have a choice of more than 3,000 available sizes.
All dimensions are grouped together under one order number, enabling the required ready-to-use sizes to be found easily and quickly.

Hasco's range of flat steel products has also been extended by many new materials.
Two examples are the highly-polishable case-hardening steel 1.2162 and the through-hardening cold-work steel 1.2363, which is additionally noted for its high-wear resistance.

The pre-hardened and tempered chromium stainless steel 1.2099 is also available as precision flat steel.

This material has good machining properties, dimensional stability and corrosion resistance.

All the dimensions and tolerances are oriented to practical applications and conform to DIN 59350.

Power supply contract protects steel production

ABB has won a US $28 million contract for equipment to provide a new steel plant in Turkey with the reliable power supply needed to ensure high-quality production.
The project is the largest single private investment in the iron and steel industry in Turkey and will have the capacity to produce 2.5 million tons of hot flat-rolled products and 1.2 million tons of cold-rolled products.

The plant will also produce galvanising steel, dyed sheet steel and rolled steel.
ABB will supply technology including a Static Var Compensator (SVC), which compensates for fluctuations in the voltage and current of power supplies that can harm production quality in industrial plants.

The contract was awarded by MMK-Atakas, a joint partnership between Atakas Metallurgy and Port Management (Turkey) and Magnitogorsk Iron and Steel Works (MMK), a Russian company.

"This is an excellent example of 'one-stop' shopping", said Peter Leupp, Head of ABB's Power Systems division.

"The technical support provided by ABB experts in the initial phase proved extremely worthwhile for the customer and we collaborated closely on the development of a tailored solution".

The order includes transformers, high and medium-voltage switchgear, a substation Scada (supervisory control and data acquisition) system and FACTS (flexible AC transmission system).

In addition to the SVC system, ABB will supply four 155MVA power transformers, a 380/34.5kV complete turnkey switchyard and a 72.5kV open switch yard.

The company will also supply and install medium-voltage panels along with the Scada and communications system.

The initial phase of the project is scheduled to be operational by 1st, April 2009.

Sberbank and MMK sign credit facility agreement

It is reported that Mr Herman Gref chairman of the board and CEO of Sberbank and Mr Victor Rashnikov chairman of the board of directors of OAO signed a nonrenewable 2 year credit facility for RUB 3.0 billion.

The credit facility is provided to finance the construction of the plate mill complex at MMK with a design capacity of 1.5 million tonnes of plates per year. The plates are intended for production of pipes, building of ships, vessels and bridges.

The implementation of the plate mill complex is bound to further significantly strengthen the general operational efficiency of MMK. It will secure state of the art production of high quality plates meeting international standards and capable to successfully compete both in the domestic and export markets.

In its turn, Sberbank considers the credit line for MMK as another major step towards effective support of Russian strategic enterprises.

Production pruning - US weekly raw steel production dips by 51% YoY

American Iron & Steel Industries reported that in the week ending December 20th 2008, US's raw steel production was 1.022 million tons while the capability utilization rate was 42.9%. Production was 2.102 million tons in the week ending December 20th 2008, while the capability utilization then was 88.1%. The current week production represents a 51.4% YoY decrease from the same period in 2007.

Production for the week ending December 20th 2008 is down by 12.5% WoW from the previous week ending December 13th 2008 when production was 1.168 million tons and the rate of capability utilization was 49%.

Adjusted YTD production through December 20th 2008 was 99.319 million tons, at a capability utilization rate of 82.1%. That is a 5.6% YoY decrease from the 105.206 million tons during the same period last year, when the capability utilization rate was 87%.

District wise production for the week ending December 20th 2008
1. Northeast Coast: 94
2. Pittsburgh/Youngstown: 105
3. Lake Erie: 24
4. Detroit: 29
5. Indiana/Chicago: 269
6. Midwest: 117
7. Southern: 342
8. Western: 42
(In thousands of net tons)

AISI's estimate is based on reports from companies representing about 75% of the US's raw steel capability and includes revisions for previous months.

Downsizing deals - Severstal Warren layoffs total about 300

It is reported that about 300 steel workers at the OAO SeverStal Warren mill began a temporary layoff last Monday with the total expected to reach 500.

Mr Gary Steinbeck director of the USW sub district office in Niles said that the company didn't give a timetable when the furloughs might peak. He said that ''Some people are using vacation time. They'll go into layoff as they come off vacation.''

Mr Steinbeck previously said that 100 of workers will remain on the job to do maintenance and other jobs.

A top executive said earlier this month that the number of laid off workers could change but would be substantial. About 100 salaried workers also were expected to be idled. The mill then known as WCI Steel had a total work force of about 1,200 when Russia based OAO SeverStal bought it in July.

Severstal is cutting staffing and production throughout its global operations as it tries to adjust to plunging orders during a worldwide economic meltdown.

Venezuela urges aluminum firms to present recovery plan

BNamericas quoted Mr Arquímedes Hidalgo spokesperson for the Sintralcasa union as saying that Venezuelan aluminum producers are required to present a sector recovery plan to the country's basic industries and mining ministry during the first quarter of 2009.

Mr Hidalgo said that "The plan will be drawn up under the premise that no more raw materials will be produced for export. It will all be tagged for diversifying what we already have. A Mibam committee in charge of the issue said that USD 1.9 billion will be needed for getting companies up to date."

A mining ministry official said that the ministry has allegedly approved a recovery plan that includes paying off debt and updating technology at companies in the sector.

It may be noted that unions from the four state companies in Venezuela's aluminum production chain namely Alcasa, Venalum, Bauxilum and Carbonorca, have been asking the government for several months to invest in technological upgrades at their plants to overcome the operational crisis they are currently experiencing.

Thainox to halt production for 1 month on weak demand

Thainox Stainless PCL, Thailand's largest stainless steel producer, said on Tuesday it planned to stop production for one month due to weak global demand.

The shutdown would help the firm save costs at its plant in Rayong on Thailand's eastern seaboard, and allow it to carry out maintenance work, it said in a statement. It had sufficient inventory to serve the market, it added.

"However, during this period, the customers will still be able to place an order and we continue to deliver the finished products as usual as the Bangkok office and other departments not directly related to production continue to work," it said.
Thainox, Southeast Asia's largest stainless steel maker, has an annual capacity of 300,000 tonnes of stainless steel, widely used in the construction, automobile and household sectors.

Around 60 percent of its output is sold on the domestic market and the rest exported, according to the company's website. Thainox gets its raw materials, including hot-rolled coils, from abroad.

Kim Eng Securities said in a research note the company was now running at a low utilisation rate of 53 percent, mainly due to a lack of hot-rolled coils.
Thailand's Mahagitsiri family, which founded the company, recently raised its stake to 58 percent. South Korea's POSCO owns 15 percent, and other major shareholders include Nippon Steel .

Recession reports - Russia sets aside USD 340 billion for package

RIA Novosti reported that Russia's government has earmarked RUB 10 trillion for an anti crisis package which is comparable to the country's annual budget. The press office said that "In total, RUB 10 trillion have been set aside for anti crisis measures. This money will come from the federal budget, the Central Bank and reserve funds."

This is almost double the amount of Russia's overall reserves. As of December 1st, Russia's Reserve Fund was RUB 3.6 trillion and National Wealth Fund, RUB 2.1 trillion.

The government is also ready to provide RUB 92 billion from the federal budget in financial assistance to the so called core enterprises, as well as up to RUB 200 billion worth in state guarantees. The government issued on last Thursday a list containing the names of 295 companies that will receive state support including companies working in transport, energy, oil and gas, communications, media and other sectors.

Mr Alexei Kudrin finance minister of Russian said last Saturday that the country would have a budget deficit of RUB 1.5 trillion to RUB 2.5 trillion, which is almost 6% of GDP. He said that spending would not be cut even if oil prices plunged below USD 20. In the 2009 budget approved by parliament, revenue exceeded expenditure by RUB 1.9 billion but the document assumed an average oil price of USD 95 a barrel. Mr Kudrin said that "Even if oil plummets to USD 20 per barrel, we will not slash spending at least not at the federal level. The government would restructure its spending projections but there would be no reductions. He added that public sector employees, pensioners have nothing to fear.

Economic Development Ministry official earlier said that budget expenditure could be cut by 8% but that the figures did not include the anti crisis measures adopted by the government. Ms Yelena Lebedinskaya of the Economic Expert Group said that anti crisis expenditure could push the total deficit to RUB 9.5 trillion. She said that “Deficit would have to be made up with borrowing limited by the budget code to 1% of GDP and tapping the Reserve Fund.”

ArcelorMittal's $400 price hike on offer in 2009 US tinplate deals

ArcelorMittal USA has offered a price increase of $400/ton in its tinplate sales negotiations with various can manufacturers in the USA for shipments in 2009, it was learned in Tokyo Wednesday. As a result, other US tinplate producers are expected to follow suit for their domestic shipments in 2009.

The US steel industry has been operating at less than 50% of capacity since the beginning of December. Its steel capacity utilization was 49% last week. In the USA, domestic demand for steel products is way down in consuming sectors ranging from autos to building materials. As a result, local transaction prices of steel products face a steep fall as a whole.

Under the existing circumstances in the USA, it is a matter of attention that ArcelorMittal USA is trying to win a considerable price increase in its tinplate contract negotiations for shipments in 2009. The price increase is believed to have stemmed from the company's policy to meet a surge in the costs of raw materials.

In the USA, most of the domestic tinplate shipments are usually negotiated under annual supply contracts, for which negotiations on contract renewals start from the October-December quarter of each year. For shipments in 2008, the contract renewal negotiations started in the October-December quarter of 2007 and a price increase of $100/ton was agreed after the beginning of 2008. At the time, though, the price terms settled were devoid of a pass along to meet a surge in raw materials costs because there were no forecasts that prices of raw materials such as iron ore, coking coal and tin would soar to an abnormal level.

In the USA, consumer spending is considerably declining in the repercussions of the financial crisis, a situation that applies to foodstuffs as well. But canned foodstuffs are an exception. Among general households, more of them are opting to avoid purchasing perishable foods while stocking up on canned nonperishable in large amounts for thrifty life. Accordingly, tinplate demand for canned foods is described as favorable.

A major price increase for tinplate shipments in the USA will exert a favorable influence on tinplate exports out of Japan, Europe and the USA to Latin America, market sources forecast. As far as US steelmakers are concerned, they are expected to exercise moderation in reducing what they charge for tinplate exports to Latin America.

Meanwhile, Japan's integrated steelmakers find it difficult to respond with active tinplate exports to the USA even if local transaction prices of tinplate have advanced considerably in 2009. For the main bottleneck, Japanese tinplate imports into the USA are subject to the existing 95% anti dumping duty. Back in June 1999, the US steel industry filed an anti dumping case against tinplate imports from Japan. Then, the US International Trade Commission admitted injury of the imports to US steel mills in its final determination, under which the 95% AD duty was imposed on the imports. The AD duty came under a sunset review in 2006, which led to its continuance.

Baoshan raises prices to trim its losses

BAOSHAN Iron & Steel Co has raised product prices for February delivery to trim losses, its first increase in five months, trade sources said yesterday.
Analysts said the rise is based on a stabilized market sentiment but may not be sustainable. Domestic steel prices stabilized last month after plunging more than 50 percent from June's peak as mills reduced output to sustain the market as demand dropped.

Prices for cold-rolled products were raised by 300 yuan (US$44) a ton, or more than 8 percent, while those for hot-rolled coil were raised by between 100 yuan and 200 yuan a ton, a gain of up to 6.2 percent, according to trade sources and industry consultancy Mysteel.

Prices for zinc-galvanized sheets were raised by 250 yuan a ton while those for color coated sheets went up by 450 yuan a ton, they said.

"Not only Baosteel, several other mills have been gradually raising prices by small margins," said Xu Xiangchun, director of Beijing Lange Steel Informaiton Research Center, an industry data provider.

The Shanghai Securities News reported on Tuesday that several mills including Angang Steel Co, Beijing Shougang Co and the private-sector Shagang Group had raised prices for January. Angang raised prices for cold-rolled products by 230 yuan a ton, it said.

But Xu said he didn't see price rise by major mills spreading into February and March as there were uncertainties over market trends.
"Mills raised prices as they are eager to trim losses, given their expensive inventories of both products and raw materials," Xu said. "Even after hikes, the products would still be sold below cost."

Baosteel, the domestic industry leader, has warned it may post a loss for the current quarter. It fell 2.22 percent to 4.85 yuan yesterday.

Iron ores at China's ports decrease

The amount of iron ore stocked at China's 19 ports dropped to 59.99 million tons as of December 19, down 19 percent from the previous month, according to MySteel.
Meanwhile, prices of spot iron ores have risen periodically.

Zeng Jiesheng, analyst with MySteel, attributed the current situation to steel price rise and the subsequent production resumption of a number of steel plants in recent time.

Currently, CIF price of Indian powder iron ore has increased to 80 US dollars/ton, up 20 percent from early November.

Chinese domestic spot ore prices have risen correspondingly. One example is factory price of powder iron ore in Tangshan up 14 percent to 722 yuan/ton.

Some analysts noted that such trend of iron ore stock drop, and price rise won't maintain long since the downstream steel market hasn't come to a real recovery.
Most steel plants that resume production currently are small and private ones, while large steel enterprises still keep output cut by 50~60 percent since they have overstocked imported iron ores under long-term agreements, according to Du Wei with Umetal.com.

Gazprom Q2 net profit triples

Russia's Gazprom announced that its net profit almost tripled in the second quarter of 2008 as the world's largest gas producer reaped earnings from record commodity prices before the global economic crisis took hold.

Gazprom said that “Its net sales of gas increased by RUR 331,171 million or 44% to RUR 1,089,464 million in the 6th months ended June 30th 2008 as compared to the 6th months ended June 30th 2007. This increase was primarily due to the increase of the volume of gas sold to Far Abroad countries and higher prices of gas sold in each geographical segment.”

It added that “For the 6th months ended June 30th 2008 net sales of gas to Far Abroad countries increased by RR 251,348 million or 61% to RUR 661,554 million as compared to the 6th months ended June 30th 2007. This mainly results from the increase of the volume of sold gas by 26% or 20.3 billion cubic meters and the growth of average prices. Net sales of gas to FSU countries increased by RUR 29,850 million or 22%, to RUR 163,637 million in the 6th months ended June 30th 2008 compared to the 6th months ended June 30th 2007. The increase of sales in this segment is explained by higher average realized prices, which was compensated by the decrease of the volume of sold gas by 2% or 0.9 billion cubic meters.”

Gazporm said that “Net sales of gas in the domestic market increased by RUR 49,973 million or 23%, to RUR 264,273 million in the 6th months ended June 30th 2008 compared to the 6th months ended June 30th 2007. This is explained primarily by increased average domestic price for gas set up by the Federal Tariffs Service. Net sales of refined products increased by RUR 131,540, or 59%, in the six months ended 30 June 2008. The increase was mainly due to the increase of refined products prices.”

It added that “Net sales of crude oil and gas condensate increased by RUR 59,622 million, or 80%, in the six months ended 30 June 2008. The increase of net sales of crude oil and gas condensate primarily resulted from the Gazprom Neft activities: net sales of crude oil increased by RUR 55,277 million or 85%, to RUR 120,081 million in the six months ended 30 June 2008 compared to the six months ended 30 June 2007.”

Wugang to invest 180 millionn Au dollars for 50 pct shares of Australian iron ore mine

Wuhan Iron and Steel Corp., parent of Wugang, will invest 180 million Australian dollars (or 127 million US dollars) to jointly exploit iron ore resources in south-central Australia with the local company Centrex Metals Ltd. (CXM).

The two sides have recently signed a framework agreement, under which the two will set up a joint venture and each holds 50 percent shares. The joint venture will exploit 11 iron ore areas in Eyre Peninsula, with an estimated deposit of 2 billion tons.

Besides, CXM will sell 15 percent shares to Wugang at a price of 0.25 Australian dollars per share. As a result, Wugang will become the second largest shareholder of CXM and owns a seat on the latter's board.

Under the agreement, the two sides will jointly build a deepwater port 60 kilometers away from the mine area, for exporting products.

According to Wugang's general manager Deng Qilin, Wugang will form an annual steel production capacity of 50 million tons in the next few years, but the company only yields 4.5 million tons of iron ores per year, far from its annual demand of 80 million tons.

Deng also said, Wugang will accelerate its pace in building iron ore bases at abroad in the next few years.

Australian CXM, a local listing iron ore producer, is mainly engaged in production of hematite and magnetite, with a licensed exploration area of over 2000 square kilometers.

AK Steel to cut salaries by 5 percent next year

Steel producer AK Steel Holding Corp. said Wednesday it will cut pay for salaried employees by 5 percent starting next year and implement other cost-cutting measures, including offering retirement incentives, to save on costs.

The company said the moves, presented to employees in a letter on Monday, are in response to the slumping economy, which has lessened demand for its products.

The 5 percent pay reduction will start Jan. 1 and last indefinitely. It will affect AK Steel's chief executive officer and all executives. The company has 1,500 salaried employees, who are located at the company's headquarters, a research center in Middletown, field sales offices and at seven steel operations in four states.

AK Steel said it also plans to freeze the defined benefit plan for salaried employees and replace it with a defined contribution retirement benefit. It also plans to offer temporary incentives for voluntary retirements through Feb. 6. AK Steel said there are about 350 salaried employees currently eligible for a company-provided retirement benefit.

It said that it may have to implement involuntary cut to salaried jobs if the pay reduction and voluntary retirements do not yield enough savings.

On Tuesday U.S. Steel Corp., the largest U.S.-based steelmaker, said it will temporarily idle three plants and lay off 3,500 union and nonunion workers in its latest bid to cut production amid falling demand for steel products.

Last month, the company said it was laying off 675 workers in the U.S. and Canada because of lower demand. U.S. Steel has 26,840 employees in North America.

AK Steel has about 6,500 employees.

Prices of steel have dropped sharply this year and demand is slumping as the global economy slumps. Analysts have called the steel industry bleak and regions that were once sources of strong demand for steel are pulling back on their spending.

RBC Capital Markets analyst H. Fraser Phillips wrote in a note to clients Wednesday that weaker-than-expected demand growth from China "adds up to a tough year for metals and bulk commodities in 2009."

ArcelorMittal to cut 1,000 jobs in Poland

In what seems to be a deviation from its stated policy to cut only non-production jobs and also an indication of demand contraction worldwide, the world's largest steel maker, the ArcelorMittal Group, has decided to cut 1,000 production employees from its plants in Poland, which have the lowest production costs among all group plants.

'The job cuts have become necessary as demand has fallen sharply,' ArcelorMittal Poland president Gregor Muenstermanna said.

The company has submitted a request to the Labour Office here to cut jobs in its Dobrowa Gornicza plant, Muenstermanna said.

“The demand for steel from this plant has gone down by 10 percent in October alone,” he said.

Last week, however, the company had announced that it would slash up to 9,000 jobs across the globe, approximately three percent of its total workforce, but they would be all non-production jobs.

“The focus is primarily on non-production employees, in particular those in SG&A (selling, general and administrative) functions across the globe,” a company statement announcing the job cuts had said.

The job cuts would help achieve the company's stated aim of reducing SG&A expenditure by USD 1 billion in response to the current economic situation, the statement had said.

The Polish job cuts are, however, those of production employees as the company is cutting production in the face of falling demand.

Moreover, the company is preparing itself for even tougher times to come when more jobs may have to go, Muenstermanna said.

“December is, as a rule, a very poor month; so we should be prepared for a further decrease in orders,” he added.

The job cuts are being seen as a worrying move also for another reason.

A Solidarity trade union leader Jerzy Goinski, told the Puls Biznesu financial daily here that the cuts were a worrying sign, considering that production costs in Poland were the lowest in the entire ArcelorMittal group.

That means global demand is so badly affected that ArcelorMittal is being forced to cut production jobs even in its lowest cost plants, a steel industry observer said.

ArcelorMittal Poland controls four plants in the country - Krakow, Dobrowa Gornicza, Sosnowiec and Swietochowiec. It has already shut down its two large furnaces in Krakow and Dabrowa Gornicza.

The Mittal group entered Poland in 2003 and has since then come to control some 70 percent of steel production in this country. It has invested more than four billion euros (USD 5.05 billion) in Poland and till June this year it was making handsome profits from its operations.

ArcelorMittal is the world's largest steel maker with over 326,000 employees in more than 60 countries and has an industrial presence in over 20 countries spanning four continents. The company covers all of the key steel markets, from emerging to mature ones.

Incidentally, company chairman Lakshmi Mittal has reportedly lost more than 50 billion pounds (USD 73.7 billion) in the current financial meltdown although the loss is notional as it refers to the market value of the shares and other assets he owns.

LN Mittal sees steel demand rebounding soon

Bloomberg quoted Mr LN Mittal CEO of ArcelorMittal as saying that he expects demand to rebound on very low inventories and it may ramp up output in 2009.

He said that "If the demand will start improving in the first quarter or the second quarter, we will increase production volumes. We cut output by 35% and it was very aggressive for us."

Mr Mittal said that "Inventory levels are very low in the system. I do not think there will be an additional production cut. We need to continue watching the market."

It may be noted that steelmakers in Europe, Asia and the US have cut production as demand slumped amid the global economic recession. Worldwide crude steel production declined 12.4% in October.

STEEL PRICE DOWNTURN EXTENDING INTO ALL DEVELOPING COUNTRIES

Turkish long product producers are now seeking a higher price for reinforcing bar and merchant bar to reflect rising production costs. Smaller re-rollers have opted to stop producing altogether and have brought forward maintenance work. On the flat products side, heavy discounting of unsold material has failed to invigorate buyer interest. Some end-users have started purchasing material on a cash-basis but volumes are low and fall short of what is required to deplete stockpiles.

The outlook for the long and flat products markets in the Russian Federation and the Ukraine remains ominous. Demand in these CIS states has been adversely affected by the deteriorating trading conditions. Order intake from the manufacturing and construction industries remain soft. Structurals' production has been reduced again owing to the downturn in construction activity, and producers are now rationalising their product mix to correspond with the new market conditions.

Construction activity continues to support the South African steel industry. The outlook for the flat products segment is less positive. Bookings have temporally risen this month owing to ArcelorMittal’s new offers which are on average 10 percent lower than those in October. Softening downstream consumption remains a concern. Orders from the automotive and household appliance sectors continue to be depressed.

The UAE has not entirely escaped unscathed by the downturn in the global economy. The real estate building activity has been checked by the credit crunch. There are genuine fears of the US style property crash in the region. Pressure is also mounting on distributors to liquidate their holdings of quayside material. Sellers have yet to disclose their response to the Dubai Port Authority's decision to raise its storage fees. Some market participants assert that this could hasten further price corrections.

Local shipments to the Indian market have shown signs of wilting in the back drop of a global recession. Poor order books have left producers with stockpiles of unsold material. The mills have announced various measures to counter the slowdown in demand. So far none of them have revised their output. Steel Authority of India Ltd (SAIL) has reduced steel prices in the range of Rs4,000 to Rs6,000 a tonne across all product categories, and is offering concessions. Other private sector steel companies lowered prices of their products in phases during October but SAIL held their values steady.

The Mexican steel market is still depressed. Domestic orders remain soft and are not expected to improve in the interim. The steel consuming industries have reduced their steel requirements and are looking at ways to cut their costs. Traditionally, these manufacturers would have benefited from a weak Mexican peso but US consumer spending is down to levels not seen since the 1990s.