iron & steel

By Vladimir Lisin, Chairman, NLMK

In the first few weeks of 2014 it has become clear that the global economy is entering a new phase of uncertainty. Emerging markets have come under renewed scrutiny, leading to volatile movements in currencies and stock markets, reflecting concerns among investors about the impact of the Federal Reserve’s “taper” programme and financial stability in China.

These issues come at a time when the underlying trends suggest that China has passed the point of its fastest growth. Those metals and mining companies who budgeted for years of accelerating consumption to come have already been caught out by the new realities and the pressures on them can only intensify in 2014 driven by the increased funding costs. Read more

If it’s not iron ore, then Vale is not interested, it seems. In its latest attempt to slim down and rid itself of non-core assets, the Brazilian miner said on Monday that it will sell at least half of its stake in Norway’s aluminium producer Norsk Hydro. The sale could fetch as much as $1.1bn. Read more

Ferrexpo, a London-listed Ukrainian iron ore miner, said on Wednesday it had bought a 14.4 per cent stake in Brazilian mining group Ferrous Resources do Brasil for $80m.

The announcement marks Ferrexpo’s first significant expansion outside Ukraine and comes weeks after Kostyantin Zhevago, its majority owner, said the company was on track to continue supplanting its Brazilian rivals – including Vale, the world’s biggest iron ore exporter – as a supplier to Asian steelmakers. Read more

Russia’s far flung steel producing regions are feeling the pinch as industrial growth slows down, reducing the income regions get from corporate income tax. So it’s heartening to see that the billionaire co-founders of Evraz have decided to register as tax payers in the remote Siberian town that is home to the Russian steel group’s biggest rolling mill, hoping their own mammoth personal tax payments will make up some of the shortfall. Read more

First Posco, now Mittal. It’s not looking good for Indian FDI.

ArcelorMittal, the global steel company, said on Wednesday it was pulling out of a planned investment in Keonjhar, in the Indian state of Odisha, because of third-party delays and the bleak economic outlook. The news came a day after Posco, the South Korean steelmaker, said it was dropping plans to build a $5.3bn steel mill in Karnataka after long-running issues on land acquisition. Read more

Generating at its peak 13 per cent of Serbia’s export earnings, Zelezara Smederevo steel mill on the banks of the Danube is a symbol of the supposed glory days of Serbian industry.

So when the plant’s government owners restarted one of its two furnaces on April 22 after nine months of inactivity, it seemed to bode well for Serbia’s manufacturing sector – and the rest of the country’s economy, which slipped back into recession last year. But the uneconomical mill’s future will be dependent on finding foreign investors, and reliable customers for its output. Read more

Anglo American may have passed on this one, but Nippon are up for it. Japan’s largest steel company, Nippon Steel and Suminato Metal Corp, was given the go-ahead on Thursday to develop the Revuboè coal project in Mozambique’s Tete province. It now hopes to begin production by 2016, nestled in among other major extractors in one of the world’s most important new mining regions.

The announcement comes little over a week after the London-listed mining giant, Anglo American, said it had dropped plans to acquire a $555m majority stake in the Revuboè venture, which is situated adjacent to Vale’s Moatize mine and Rio Tinto’s Zambezi and Benga mines. Read more

Severstal on Tuesday kicked off the reporting season for Russian steel makers with a bit of a whimper, posting its worst quarterly results for more than three years.

The metals and mining group controlled by billionaire Russian tycoon Alexey Mordashov suffered a net loss of $150m in Oct-Dec 2012, as falling steel demand and prices weighed on the sector. Read more

Not so long ago, everything he touched turned to gold. Now Eike Batista’s bad luck seems to be contagious.

Anglo American’s $4bn writedown on Minas-Rio in Brazil comes about five years after it bought the cursed iron ore project from Eike in two transactions totalling $5.1bn. Read more

It’s been a(nother) tough week for CSA, ThyssenKrupp’s vast Brazilian steel mill.

Rio de Janeiro’s city council ordered the company on Monday to halt operations at the iron and steel plant just outside the city. Apparently, they did not have all the correct licences. If CSA did not comply with the order, the council said, they would have to pay a fine of R$570.65 ($280.28) per day.

That’s not great news for any company, especially CSA. Read more

Shares in JSW Steel closed down 2.76 per cent on Wednesday on news that India’s Central Bureau of Investigation had named the company’s chairman, along with other executives, among people accused of involvement in illegal iron ore mining that precipitated a ban on mining in the southern state of Karnataka.

The allegations relate to the political-business nexus that’s all too familiar to Indians, especially after a recent spate of graft scandal revelations, and involved the usual allegations of purchasing land at inflated prices, bribery and various forms of illicit political donations. Read more

It’s rare to see an Argentine business leader openly criticise a government with a reputation for bearing grudges.

But Paolo Rocca, CEO of steel giant Techint, did just that this week, slamming what he saw as Argentina’s declining competitiveness and criticising the government for having “lost its way”. The government’s response was swift, and sharpRead more

Evraz, Russia’s largest steelmaker, on Thursday reported a $50m net loss for the six months to the end of June and a 28 per cent decline in ebitda to $1.2bn on a 9.1 per cent drop in revenues to $7.6bn.

With the global steel market in the doldrums, the results came as little surprise, especially after rivals NLMK and Severstal reported their numbers in the last few days. But all three Russian producers are benefiting from reasonably strong infrastructure spending in Russia, not least on the railways. While life is tough, it’s much tougher elsewhere in Europe. Read more

Nothing says “downturn” in China quite like the freefall in prices of iron ore, the key steelmaking ingredient.

Prices for the TSI benchmark 62 per cent Fe iron ore stood at $94.8 per tonne on Tuesday, down 19 per cent in the last four weeks. “Watching this market is like watching the Titanic,” wrote commodity broker London Dry Bulk in a research note. Read more

The crisis in Europe continued to hammer Tata Steel in the quarter ended in June, for which it reported a steep fall in profits, according to its results on Monday.

Tata Steel, India’s largest and Europe’s second-largest steel producer, reported $108m in consolidated net profits, down 89 per cent from $966m during the same period last year (which included one-time gains of $607m) on $6.11bn in revenues. That was up from $78m in profits the company reported during the quarter ended in March. Read more

Few things are as closely linked to the health of the Chinese economy as steel. It goes in skyscrapers, railways, cars, bridges, household appliances – just about everything that makes an economy run.

So when Chinese steel prices sink, they carry a stark economic message. On Tuesday, the world’s most traded steel futures contract – the Shanghai rebar future – hit its 2012 low, with the most-traded January contract reaching Rmb3,848 per tonne, the lowest price the since the rebar future was launched in early 2009. Read more

Russian steel producers have been shielded from the problems besetting their European competitors thanks to their relatively low costs of labour, energy and raw materials.

But a decision by Novolipetsk Steel to idle one of its blast furnaces is a sign that the economic turmoil in Europe is finally reaching deep into Russia’s industrial heartlands. Read more

Minority shareholders in Russia have generally a hard time getting their voices heard. So it’s interesting to say the least that the owner of a miniscule stake in Magnitogorsk Metallurgical Combine has succeeded in derailing the Russian steelmaker’s plan to expand internationally and take over Flinders Mines, the Australian iron ore miner. Read more

Quarterly profits at Sterlite Industries, London-listed Vedanta Resources’ India business,  fell by a third on higher costs, depreciation and soaring interest payments, the company announced Wednesday.

This could well be the metals company’s last results announcement without iron ore miner Sesa Goa – billionaire owner Anil Agarwal announced in February he would merge the two companies, both under the Vedanta umbrella. Read more

Russian steelmakers may have bounced back from the 2008 financial meltdown, but one appears to be heading into fresh trouble as a new wave of the crisis envelops Europe.

Novolipetsk Steel, Russia’s fourth biggest steel producer, said the deterioration in the global steel market and a 20 per cent rise in costs at its Russian operations caused a drop in earnings before interest, taxes, depreciation and amortization in the fourth quarter of the year. Ebitda declined to $383m from $478m in the previous quarter. Read more