|From the CEO's Desk
As we all know, there are many sub-sectors within iron & steel industry
and interestingly, their response to recession is quite different.
Steel mills catering to the requirement of automotive industry are worst
hit. Automobile production in last quarter is drastically reduced. This
is because of the uncertainty prevailing in the industry has forced
individual as well as corporate buyers to postpone their buying plans.
Though the banks have reduced the interest rates, it will probably take
few more months to change the mood and mindset. There is a slight
increase in auto production in Jan 09 as compared to Dec 08 but is too
small to be happy about. Further, lot of steel was going to forging
units for auto component manufacturing. Forging industry was doing
exceedingly well in last few years. Many companies had increased their
capacity and were catering to developed world along with the domestic
auto companies. India was all set to become forgings hub of the world
but all these projections got shattered due to present unforeseen slump
in the world economy. Today the overseas business is drastically reduced
and even the domestic auto companies are operating at a very low
capacity utilization. Forging companies and also steel mills are in a
soup. I am told most of special steel producers are operating at less
than 50 % capacity and are making huge losses every day. If this
situation prevails for next few months, their accounts books will become
The situation with flat producers is slightly different. Their
applications are quite diversified and thus, though they have reduced
their production earlier, there is a gradual pick up. In fact, I am told
JSW had made record production in CR and coated division in Jan 09.
These mills may have kept their expansion plans on hold but I am sure
once the situation is some what favorable, they will go ahead with their
I must say that small and medium units based on sponge iron are doing
comparatively better. Firstly, the raw material cost has substantially
reduced and secondly, they are catering mainly to housing construction
requirement which is less affected by worldwide recession. Also, they
cater locally to nearby areas so that the logistic is also under
control. The states like Chhattisgarh, Jharkhand and Orissa have many
such units and I believe that in such testing period, they will perform
better than others.
Editor & CEO
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SAIL expansion cost slip on downturn
Steel Authority of India
Limited (SAIL), India's largest steel producer, expects the current
slowdown in the global economy may reduce cost of its Rs 80,000-crore
worth expansion plan to double its capacity. SAIL had originally planned
to double its capacity by 2010, with an investment of Rs 54,000 crore.
However, the cost of the plan rose to Rs 80,000 crore early last year
when overbooked Europe- based equipment suppliers increased the prices.
However, with the changed dynamics, SAIL expects to meet its target at
costs close to the original estimate.
"The global economic slowdown has had a positive impact on SAIL.
Equipment suppliers are now willing to offer larger discounts and are
also promising timely delivery. According to initial calculations, this
could reduce our expansion cost substantially," said an official of
Ministry of Steel. Now, the state-owned company has started
renegotiating equipment purchase deals that have not yet been finalised
and is even exploring the possibility of getting discounts on existing
supply deals. The company is trying to get best deal from suppliers who
are also facing demand compression and looking desperately for buyers.
Under the expansion plan, SAIL will increase its capacity from 15
million tons (mt) to over 26 mt by 2010. Roughly half of the orders for
equipment have been placed and work on the remaining lot is being
Equipment is a big cost element in SAIL's expansion projects as it
involves expanding production lines, putting up new ones and erecting
new state-of-the-art blast furnaces. SAIL sources almost 80 percent
equipment from the domestic market while the remaining comes from a
select band of overseas suppliers.
JSW slashes investment in phase I of WB plant
Faced with a liquidity crunch, the country's
second largest steel producer JSW has revised its Rs 350 billion steel
project in West Bengal and it has slashed investment in the first phase
of project by 60 percent to Rs 40 billion.
As per the company's original plan, it was to set up a 10 million ton
per annum in the state in three phases by 2020. JSW had planned to
invest Rs 100 billion in the first phase which was to be completed by
2012. However, the waning demand for steel products and lack of
liquidity have forced JSW to push the proposed steel plant the next
phase. JSW Steel said that it is going slow on projects where financial
closure has not been achieved. Unless rates come down they will not like
to borrow any money. Therefore, they have not gone further with any
syndication of loans for the West Bengal project. It said that they
hoped the Phase 1 of the West Bengal project will achieve financial
closure by March. They expect the interest rates to come down to below
10 percent by then from around 12 percent now.
MVS Seshagiri Rao, Director of finance, JSW, said that the firm will set
up a beneficiation unit to purify iron ore, a pellet plant and develop
coal mines with an investment of Rs 40 billion in its first phase. "We
are implementing the Bengal project in phases. Phase-1, we are working
on the raw material side. By end of this quarter, we hope to achieve
financial closure for it." Rao added.
In November, JSW Steel laid the foundation of the 10 million ton steel
plant, which is expected to be operational by 2020. The company, which
acquired 4,500 acres of land for the plant, owns 89 percent of the
equity in the Bengal unit while the remainder is held by the state
CIL may hike coal prices next fiscal
State-owned Coal India (CIL), the country's
largest coal producer, may increase coal prices from the next financial
year due to a 24 percent increase in its wage bill. Most of the thermal
plants, who purchase coal from CIL, will be hit by the move.
"CIL may be forced to increase coal prices as it will end up this fiscal
with a liability of close to Rs 5,000 crore after adjusting new wages
for its workers retrospectively from June 30, 2006." said CIL Chairman
Partha S. Bhattacharyya. Santosh Bagrodia, Minister of State for coal,
also said that a decision on these lines might be taken for the next
financial year. Increase in coal prices would hike the cost of power
generation, which would be ultimately hampered on the end consumer.
Currently, the variable cost of generation at a pithead thermal power
station is Rs 0.75 per unit. "In case there is a price rise of domestic
coal, it will be passed by the regulatory authority only in the
following financial year, which will be 2010-11," according to Puneet
Goel of KPMG Advisory Services.
According to a CIL estimate, the company will have a liability of Rs
8,500 crore for a five-year period starting 2006 on account of wage
arrears. The Rs 5,000-crore liability for the current financial year
includes gratuity cost burden of Rs 1,200 crore. CIL had revised coal
prices by 10 percent in December 2007 due to implementation of the
previous round of the national coal wage agreement retrospectively.
JSW delays blast furnace commissioning
Commissioning of JSW Steel Ltd's massive blast
furnace is unlikely to take place before March.
“We are delaying commissioning in view of the present crisis in the
steel industry. The current market is not conducive to absorb any extra
production." said JSW director Dr S.K. Gupta Claimed to be the country's
largest, the blast furnace (4,300 cubic metres) has the capacity to
produce 2.8 million tons (mt) of hot metal annually. It is the third
blast furnace at the JSW plant.
Asked if there was already a production cut, Gupta said one of the two
operating blast furnaces - producing at a rate of about 3,000 tons of
hot metal a day - was closed but it was being put back into operation.
Total capacity of the two blast furnaces is 4 mt of hot metal annually.
Gupta said there was little activity now over the group's proposed West
Bengal plant in Salboni. "In view of the present situation, we're going
slowly over our new investment plans," he added.
Orissa clears power, steel sector projects worth Rs 37,989
Orissa government has cleared the projects
worth Rs 37,989 crore in the power and steel sectors.
This includes five projects in the power sector-with a combined
investment of Rs 28,704 crore and an aggregate generation capacity of
6,120 MW- and one steel project at an additional investment of about Rs
9,285 crore. "Ind-Barath Energy Utkal Ltd would set up a 700-MW (2x350)
thermal power plant at Sahajbahal near Banaharpali in Jharsuguda
district at an investment of Rs 3,150 crore. Visaka Thermal Power Pvt
Ltd would set up a 1,100 MW coal-based power plant at Bhandaripokhari or
Banto block in Bhadrakh district at an investment of Rs 4,800 crore."
said Orissa industry secretary Saurav Garg and energy department
secretary Pradeep K. Jena. The High Level Clearance Authority approved
the 1,680-MW thermal power project proposed by L&T Ltd. at an investment
of Rs 10,200 crore near Dhamra in Bhadrakh district.
Jindal Steel & Power Ltd will set up a 1,320-MW thermal power plant at
Athamallik tehsil in Angul district with an investment of Rs 5,940
Steel production up marginally in 10 months
The country's steel production rose to 46.8
million tons in the first 10 months of the financial year 2008-09 that
ends in March, up 1.1 percent from a year earlier. Among the large
producers that control about a third of the domestic market, output at
state-run Steel Authority of India was down, while Tata Steel remained
steady. There has been a growth in long products used mainly in housing,
but flat products were down owing to slower off-take from the
engineering sector. India, which makes about 53 million tons of the
metal a year, is the world's fifth largest steel producer .
JSW's steel sales growth may shrink to 10% this year
Sluggish sales in third quarter are likely to
pull down steel giant JSW Steel's sales growth to 10 percent this fiscal
as against the expected 30 percent. "October-December was a very
difficult quarter. People did not know about what was happening in the
economy. For the full year, our growth could be at 10 percent as against
the earlier expected 30 percent," JSW Steel Vice-Chairman and Managing
Director Sajjan Jindal said. The steel major has seen a pick up in sales
volumes in January that would help it clock an around 50 percent growth
in the fourth quarter of the 2008-09 fiscal. The steel-major doesn't
have any plans to raise debt as of now and it was trying to reduce its
dependence on debt over a period of time. Noting that the steel prices
have stabilized in global markets, Jindal said he did not expect any
remarkable improvement in prices in the forseeable future. Banks have
increasingly turned risk averse in the wake of the global financial
crisis and corporates, which are not performing well, may face issues in
RINL cuts production by 30 % on demand slowdown
State-run steel maker Rashtriya Ispat Nigam
Ltd (RINL) has cut its production by nearly 30 percent due to slackening
demand of the commodity from consuming sectors like automobile and
manufacturing. Its current level of production is restricted to 70
percent in view of the global financial crisis that has led to a dip in
demand from automobile and manufacturing sectors. RINL has an annual
production capacity of about 3 million tons. Owing to the dip in demand
over the months, the steel major is left with a huge 6 lakh ton of
inventory worth about Rs 1,800 crore. The company managed to clear about
33 percent (2 lakh tons) of its stockpiles in January by way of
“aggressive selling and foregoing the premium” that it used to charge on
its products earlier. During April-January period of the current fiscal,
the company's saleable steel production stood at 2.35 million tons,
which it claims is 93 percent above the planned target and 106 percent
of the rated capacity. The company's turnover for the ten-month period
stood at Rs 7,994 crore, up two percent compared to Rs 7,827 crore of
the corresponding period in the last financial year.
Tata Steel's January sales up 26%
The country's leading steel producer, Tata
Steel, reported 26 percent rise in January sales to 5.1 lakh tons on
account of revival in demand. Amid the global economic downturn, the
steel major's sales volume had dipped by about 14 percent to 1.07
million tons in the third quarter ending December. Beginning the fourth
quarter on a buoyant note, Tata Steel saw its January sales improve by
1.1 lakh tons to 5.1 lakh tons. The company's hot metal production in
the reporting month also increased by 32 percent to 5.7 lakh tons
against 4.3 lakh tons in the same month of 2008. Its crude steel output
also increased by 25 percent to 5.2 lakh tons from 4.1 lakh tons. The
company said its steel melting shops and 'H' blast furnace at Jamshedpur
unit recorded their best-ever production of 5.24 lakh tons (crude steel)
and 2.57 lakh tons (hot metal) respectively. Besides reporting an
increase in sales volume and output in January, the firm said it started
civil construction work at its proposed 6-million-ton integrated steel
project at Kalinganagar, Orissa. The world's sixth largest steel
producer Tata Steel plans to invest about Rs 22,000 crore in its Orissa
project. Tata Steel has already undertaken brownfield expansion to
enhance production capacity to 10.5 million tons by 2010. At present,
the company's Jamshedpur plant has a capacity to produce about 6.8
million tons of steel annually. In addition to increasing the capacity
of its existing unit, the steel major is in process of setting up
greenfield projects in Jharkhand, Orissa and Chhattisgarh. While in
Jharkhand it proposes to invest about Rs 42,000 crore for a 12-MTPA
integrated steel plant, in Chhattisgarh it intends to pump in Rs 18,000
crore for setting up a 5-MTPA steel plant. For all the proposed
greenfield projects, the company claims it is in the process of
acquiring land and raw material resources.
Essar to set up 6-MTPA steel unit in Karnataka
Ruias-promoted Essar Steel is planning to set
up a 6-MTPA steel unit in Karnataka at an investment of Rs 17,760 crore
as it looks to increase its annual capacity to 25 million tons by 2015.
The Karnataka government has already cleared investment proposals. The
plant is to be set up at Bagalkot in the state. Initially, the plant
would have a 3 MTPA capacity which would be doubled to 6 MTPA in the
second phase. The proposal is to set up a pellet plant, a coke oven
plant and a battery in the first phase for which the company has asked
the state government to lease an iron ore mine for uninterrupted supply
of the raw material. At present Essar Steel's production stands at 4.6
MTPA at Hazira in Gujarat and plans to increase the capacity to 9 MTPA.
Its Indian operations also include an 8 MTPA beneficiation plant at
Bailadilla in Chhattisgarh and an 8 MTPA pellet complex in Visakhapatnam
in Andhra Pradesh. The company is also working on putting up a 6 MTPA
integrated steel plant at Paradeep in Orissa. The project would be
developed in two phases. In addition to its Indian operations, Essar
Steel has a presence in Canada, US and Indonesia. Essar Steel Algoma has
4 MTPA capacity. PT Essar Indonesia, the second largest producer of
cold-rolled steel in the private sector in the country, has a rolling
capacity of 400,000 tons per annum. Minnesota Steel, which Essar
acquired in 2007, plans to set up a 2.5 MTPA integrated steel plant with
an estimated cost of USD 1.65 billion. Already the fifth largest steel
producer in the world, India in its National Steel Policy has envisaged
production of the alloy to reach to 110 MTPA by 2019-20. However, based
on the assessment of ongoing projects, the Ministry of Steel has
projected that the country's steel capacity is likely to be 124.06 MTPA
As per the status of MoUs of private producers with various state
governments, India's steel capacity would be nearly 293 MTPA by 2020.
Orissa defers decision on TATA Steel proposal
Orissa government has deferred a decision on
according permission to a proposal of Tata Steel for setting up a 1.5
million ton per annum steel unit. The decision was taken at the state
level single window clearance authority meeting.
Ashok Meena, MD of the Industrial Promotion and Investment Corporation
Limited, said that "TATA's proposal is deferred for decision in view of
difficulties in acquiring land." The meeting also discussed TATA's
Kalinganagar project which has not yet come up though the MoU for the 6
million ton per annum steel plant was signed way back in 2005.
A senior industry department official said that "Delay in implementation
of the Kalinganagar project was also a factor for not giving the go
ahead to the steel major's new proposal." Though the state owned
Industrial Development Corporation said that land was available near
TATA's sponge iron factory, it said that it would be difficult to
acquire for the proposed new unit.
TATA which has a sponge iron unit at Bileipadar under Joda tehsil in
Keonjhar district had evinced interest to set up a 1.5 million ton per
annum steel plant adjacent to its old factory. The steel major which
asked for 100 acre for setting up a second steel mill, also demarcated a
huge open space near its sponge iron plant.
SAIL plans steel processing unit in Himachal
The state-owned Steel Authority of India
(SAIL) is planning a new steel processing unit in Kangra district of
According to a report, the 1, 20,000-tons per annum (tpa) plant would
produce TMT steel rods, drawn wire and corrugated sheets with an
investment of Rs 1.06 billion. SAIL had recently announced plans for
building a similar 1,00,000 tpa unit in Uttar Pradesh for processing
billets into TMT rebars. It has also started setting up a bar rolling
unit in Gwalior in August and another in Pulwama in September.
The company has also started work on a 2,6,000 tpa processing plant for
bar and pipes in Betiah and a 2,50,000 tpa unit in Mahnar for galvanised
tubes and bars in Bihar.
CIL rejects Rio Tinto's offer for developing coal mines
Coal India Ltd. (CIL) has rejected global
major Rio Tinto's bid for developing its abandoned and underground mines
of coal, saying the company “falls short of expertise” to take up the
"Rio Tinto has not developed any abandoned mines. Their experience in
underground mining and DPR also falls short of what our 'Notice Inviting
Tender´ (NIT) stipulates,” Coal India (CIL) chairman Partha S
Bhattacharyya said. Besides seeking a turn-key contract for the
underground mines, Rio Tinto India had shown interest in partnering with
CIL for developing its 18 abandoned mines which have an estimated coal
reserve of 1,647 million tons. While Rio Tinto MD Nik Senapati said, "
We participated in the E0l (expression of interest) and are waiting for
a decision to be made by CIL." Navratna PSU CIL plans to produce about
100 million tons of coal from its underground operations by 2016-17. The
seven underground mines on offer by for revival possess about 20 million
tons of coal.
Though the mines are to be awarded on a turn-key basis, Bhattacharyya
said CIL will invest about Rs4, 000 crore in it. The country's largest
coal producer has already prepared NIT for the underground mines and is
seeking comments from the nine short-listed companies out of the total
17. It is likely to float a tender for awarding the project next month.
Besides Rio Tinto India, the companies vying for the underground mines
include Reliance Infrastructure, Indo Australian Mining and Bucyrus of
For the abandoned mines, being eyed by 12 corporate majors, including
ArcelorMittal, Reliance, Sterlite, Essar and JSW Steel, the technical
bids are under evaluation with Central Mining and Planning Development
SAIL inks JV pact with CIL, RINL, NMDC, NTPC
Steel Authority of India (SAIL) has signed a
joint venture agreement with Coal India (CIL), Rashtriya Ispat Nigam
(RINL), NMDC and NTPC for setting up of a special purpose vehicle i.e.
International Coal Ventures (ICVL) for acquisition of coal mines and
block overseas for securing coal supplies.
The company will have its registered office in the National Capital
Territory of Delhi and will be incorporated with an authorized capital
of Rs 10 million, which shall be increased from time to time depending
upon needs of the joint venture company.
Welspun bags orders worth Rs 500 crore
Welspun Gujarat Stahl Rohren Ltd (WGSRL), the
world's second largest pipe producer, has bagged orders for LSAW pipes
worth Rs 500 crore from the Gas Authority of India Ltd (GAIL).
Now WGSRL's existing order book position will reach over Rs 10,000 crore
in comjuction with other significant orders obtained by the company in
the last few months. The order book position is almost double the
company's revenue of Rs 4,000 crore in fiscal 2008-09. “Welspun takes
pride to deliver this prestigious order in the Indian soil. These orders
not only reaffirm our position as a global supplier, but also reiterates
its reach in the premium segment of the Indian pipe market,” said B. K.
Goenka, vice chairman and managing director of Welspun.
Steel demand to hinge on auto, shipbuilding industries
The automobile sector is expected to lose 7
percent in volume in 2009. Michael Pfitzner, Executive Vice-President,
ArcelorMittal, said, "Only in 2010 and onwards will we see a resumption
of the sector." He anticipated that the present crisis would result in a
general production of cars and steel used in car manufacturing. Pfitzner
added that a crisis in shipbuilding plates would also redesign global
steel consumption. "Capesize freight rates have dropped dramatically in
2008 and the order books of shipyards are shrinking by the day,” he
"There will be a major change for the supply and demand situation for
shipbuilding plate and this product will probably face overcapacity in
the coming years," he added. The impact of the crisis in the automotive
industry and the coming plate market difficulties will be a readjustment
of steel prices and volumes.
SAIL's steel production down 2% in January
The country's largest steel producer, Steel
Authority of India Ltd (SAIL) reported a marginal 2 percent decline in
its January production at 1.12 million tons. In the corresponding month
of the last fiscal, the steel major's production stood at 1.14 million
tons. Nevertheless, the capacity utilisation of SAIL plants was 110
percent in January and its inventory position is for 30 days. There were
no production cuts December and the output of December-January was
completely sold off, not adding to the inventory levels.
JSW Steel reports 41% jump in steel output in Jan'09
JSW Steel, the country's second largest
private steel producer, reported its crude steel output surge by 41
percent to 3.21 lakh tons in January 2009 over the previous month as the
steelmaker recommenced operations from closed furnaces in view of
improving demand. However, the production in last month was down by 3
percent compared to its output of 3.30 lakh tons in January 2008.
Recommencement of two (blast) furnaces last month, which were
temporarily shut down during November and December 2008, led to higher
output. First few days, it (production) took time to pick up and that is
why there is a difference (when compared to the last year's level). JSW
steel undertook capacity revival of its mills in January as its demand
scenario improving in coming months. In December 2008, the company's
crude steel output stood at 2.28 lakh tons. The output of specific steel
products such as flat products, and long steel items stood at 2.60 lakh
tons and 38,000 tons, respectively, in last month against 2.13 lakh tons
and 29,000 tons in December 2008. However, the firm failed to meet last
year's production level of 2.65 lakh tons of flat steel items.
JSL sets up logistics arm to curb costs
The country's largest stainless steel producer
JSL has set up a logistics arm and will be investing up to Rs 100 crore
in the firm in the next two years to curb cost on its cargo movement.
Initially, the company would invest Rs 25 crore. JSL Ltd spends up to Rs
800 crore per annum on movement of inbound and outbound cargo, including
raw materials and finished alloy products. Through its new logistics
firm, the company intends to save the 20-30 percent margins that hired
transporters make on ferrying cargo. Initially, JSL Logistics will cater
to the phase-I of the company's eight lakh ton stainless steel project,
which is being set up in Orissa with an investment of about Rs 6,000
crore. Among the suppliers of heavy commercial vehicles, JSL Logistics
is favoring Tata Motors, as the auto major is offering a better deal.
NMDC eyes over 25% production growth in Q4
The country's largest iron
ore producer, the public-sector National Mineral Development Corporation
(NMDC), expects its fourth quarter production to surge by over 25
percent to 8.5 million tons on the back of an improved demand for the
mineral from domestic steel sector. As demand from the steel sector has
started reviving, the company hopes to achieve over 25 percent growth in
iron ore output in the fourth quarter. In the third quarter ended
December 31, 2008, NMDC had produced about 6.6 million tons of iron ore.
The proposed increase in production would negate the effect of the 25
percent cut in iron ore prices announced by NMDC for its long-term
domestic customers from December 1. Though realisations from the sales
in the fourth quarter will be low, its effect would be offset with
increased output. Owing to slackening demand for steel from sectors like
housing and automobile, steel companies like Essar, JSW, RINL and Ispat
had reduced their iron ore offtake from NMDC by over 35 percent from
October onwards. Navratna PSU produces about 30 million tons of iron ore
per annum, of which it exports 3.5 million tons to Japanese and South
Korean steel mills, while the rest is consumed by domestic steel
Emirates Steel says rebar demand drop by 30% in UAE
The steel demand in the UAE may fall by over
30 percent in 2009 in the wake slowdown in the construction sector, said
Sridhar Krishnamoorthy, CEO, Emirates Steel Industries. He forecasts the
demand in 2009 in the UAE for rebars would be about 4.5-5 million tons,
around 17-31 percent down from 6-6.5 million tons in 2007. However, he
also said," In the first three week of the January there is a
considerable bounce back in demand, with a lot of production cuts taking
affects and the inventories have gone down, so we feel healthy demand."
Krishnamoorthy expects the price to recover by about 5-10 percent. He
said, "I suspect the price will start moving up as we see a bounce back
in demand, more than we expected. In most regions the price has gone up
marginally, 5 to 10 percent and the same is likely to happen in the
High stockpiles and dwindling demand has resulted in rebar prices
falling to around USD 500 per ton, a third of what they were at their
peak in mid 2008.
South Steel Co project inks with BSF
Banque Saudi Fransi signed a SR912.25 million
deal to finance the South Steel Co project, one of the largest steel
projects in the Gulf region.
The first phase of South Steel Co. project, which has a paid-up capital
of SAR 450 million, will get total investment of SAR 1.3 billion. The
BSF has poured SAR 912.5 million for the project, which will start
production in 2011. This project is being promoted by SPKH, which own 60
percent of the project, while rest of the project-40 percent- is shared
by three partners including the UAE based Dubai Investments Industries,
which has acquired a 10 percent stake. The project would be built up on
6,000 sqmt out of a total area of one million sqmt in Jazan Economic
City. Promoted by SPKH, the new steel plant will be set up with
technological assistance from Germany-based SMS Group, to produce
top-quality steel billets and reinforcement bars in accordance with
international standards. Jean Marion, MD of BSF, said," The BSF is a
strong bank and it continues to lend funds for good projects even in
this period of global economic downturn.” Al-Harbi said that the project
will be set up in three distinct phases. The first phase, on which the
construction will start soon, will produce 1.5 million tons of steel of
different kinds. the deal was inked by Mr Jean Marion MD of BSF, while
Sulaiman Saleem Al-Harbi chairman of Saudi Pan Kingdom Holding Co
signed, on behalf of South Steel Co. The event was attended by several
senior bankers and SPKH executives including Abdulrahman Al-Jawa, BSF's
deputy MD and Mohammed Al-Jedia MD of South Steel Company.
Emirates Steel Industries to start new billet plant
Emirates Steel Industries will start operation
of a new steel billet plant in Musaffah. The company is planning to
launch the country's first integrated steelmaking operation in the
spring and control a third of the local market.
The plant will serve as a middle link in the integrated chain by turning
reduced iron pellets into 1.4 million ton of rectangular billets, the
raw material for adjacent rolling mills, which cast rebar and wire rod.
Ahmed al Dhaheri, Assistant VP for projects at ESI, said, “when a third
plant starts up in April 2009 to make the pellets, it will be able to
transform iron oxide directly into usable products in a USD 820 million
operation, an investment that will boost its profit margin and shield it
from the volatile prices for steel inputs.”
He added “We were basically dependent on the international market for
securing all our raw materials, so the management decided we should
become an integrated plant. By being integrated, it gives the company an
advantage to compete with other players in the market.” Al Dhaheri
however said that he was confident that prices had already hit bottom,
and the firm was proceeding with plans to get two new mills up to full
production, raising the company's output capacity to 2 million tons per
year. He noted that “The volume has increased, and the prices in the
last two weeks have turned the corner.”
The ESI facility currently uses imports of billet to produce more than
700,000 tons of rebar a year. It controls about 20 percent of the steel
market in the UAE, but as the two new mills ramp up production, ESI will
potentially hold 35% of the market. It is also constructing an adjacent
USD 1.5 billion plant that will be a copy of the first integrated
complex, but produce 1 million tons of structural beams when it opens in
2010. A third integrated operation, planned for Taweelah, will produce
flat steel products, which will serve as raw material for the
development of a downstream industry, fashioning anything from boilers
to car parts to piping.
A fourth plant will transform up to 10 million tons of iron ore into
usable pellets, allowing the company to source materials directly from
mines. Final investment decisions have not yet been announced for the
third and fourth projects.
Egypt Holding to buy 0.2% of Egyptian Iron and Steel
Egypt Holding Company for Metallurgical
Industries is seeking to buy 1 million, or 0.2 percent of Egyptian Iron
& Steel shares at price of EGP 13 million.
The Capital Market Authority is currently reviewing the offer. The
holding firm already owns 97.60 percent of Egyptian Iron & Steel while
the remaining 2.40 percent are free float.
Egyptian steel importers may reduce prices
Egyptian steel importers will reduce price
between EGP 3100 and EGP 3250 per ton, after the average price has
reached EGP 3800. The move would put domestic producers in trouble amid
of recessionary period.
The move came in response to Ezz Group announcing a price reduction to
EGP 3400 ex factory and EGP 3520 for the consumer so as to beat Beshay
Steel that sells for EGP 3700 and El Garhi Steel that sells for EGP
3600. According to a report, Beshay and Garhi would compensate through
the imported shipments arriving in the coming days. The Ezz Group
domestic market share amounts to 200,000 tons per month, with 90,000
tons accounted by Beshay and 20,000 tons by Garhi.
The report said it is expected more declines in prices when the
quantities from Turkey arrive in February 2009, especially since most of
these quantities were bought for EGP 2800. A number of local producers
accused the Egypt's ministry of Industry of not supporting that national
industry by allowing the dumping of Turkish steel. Rafiq el Daw, VP of
Egypt National Steel said that “The Turkish steel is sold in Turkey for
USD 600, while it is exported to Egypt for USD 500, which means that
there is suspicion of dumping the Egyptian market, and which requires
the intervention of the ministry of commerce to legalize import and
protect the national industry.
Turkish square billet prices comedown
Due to high prices of square billet in
domestic market, Turkish still mills pruchased the square billets from
CIS. However, the current CIS and Turkey's square billet prices have
started to comedown in wake of dropping scrap price. Turkish electric
furnace mill have cutting down the purchasing volume of scrap and
focusing on CIS and Europe's square billet recently. Besides, the scrap
demand dips due to weak demand of global finished products.
Iran to reach self sufficiency in coal production
Ali Akbar Mehrabian, minister of industries &
mines of Iran will inaugurate a development project at the Hamkar coal
mine, Kerman Province, which will increase its annual output by 17,000
tons, bringing the country to self sufficiency in coal production, said
Mehrabian said that the project has cost 250 billion, generating some
1,000 direct and 2,500 indirect job opportunities. The report added that
70% of the related machinery and equipment are domestically made.
Vietnam inks rare minerals supply deal with Japan
will provide a stable supply of rare earth minerals, which is required
for manufacturing high tech products, to Japan.
According to a report, the trading companies Toyota Tsusho Corporation
and Sojitz Corporation, and the Vietnamese government run resource
development company will form a joint venture (JV) to start developing a
major earth mineral site in Vietnam in the next fiscal year. More than
90 percent of raw minerals are imported from China. The JV will start
commercial mining operation as early as 2011, supplying about 5,000 tons
of the minerals, or about a quarter of Japan's annual consumption, for
about 20 years.
Toyota Tsusho and Sojitz plan to acquire 49 percent of the deposit
rights, but the economy, trade and industry ministry official said
that," The majority of the unearthed minerals are highly likely to be
exported to Japan." Rare earth minerals, such as the elements lanthanum,
cerium and neodymium, are indispensable in the manufacture of permanent
magnets for products such as hybrid vehicle motors and computer hard
disks. Demand for the minerals is expected to continue growing. Japan
plans to provide resources development project by having Japan Oil, gas
and Metal National Corporation conduct geological surveys of the planned
area and have official development assistance used to build roads and
bridges. Now gaining the rights for rare earth minerals deposit in
Vietnam, Japan is will get stable supply of the minerals. In 2008,
Vietnam government drew up a framework to support efforts by domestic
companies to secure supplies of natural resources to the country.
However, even if all of Viet Nam's rare earth mineral production was
imported, it would only cover about a quarter of Japan's annual
consumption. Further efforts to diversify mineral supplies are needed.
Malaysian steelmakers urge for lower electricity and gas
Malaysian Iron and Steel
Industry Federation has requested the government to cut electricity
tariff and reduced the gas prices. The federation urged to revert to the
level of the previous rates before July 1, 2008.
According to MISIF, the lower prices will help the steel industry to
better manage costs. The Malaysian steel industry has been suffered a 60
to 70 percent demand and also a serve reduction in prices of materials
and products from August 2008. The federation said that the reduction in
energy cost will assist the manufacturing sector, especially steel for
which energy and gas contributed about 16 percent of production cost, to
bring costs. The government increased the gas prices to the Malaysian
power sector and a corresponding to the adjustment to the electricity
tariff, both effective from July 1, 2008. The gas price for industrial
users consuming less than 2 million standard cubic feet per day was
increased from MYR 9.40 per million British thermal units to MYR 32.56
per million British thermal units, while for consuming above 2 million
standard cubic feet per day, it was raised from MYR 11.32 per million
British thermal units to MYR 32.56 per million British thermal unit. The
electricity tariff went up by 26percent.
Japanese December steel output lowest in 60 yrs
Japanese crude steel
production in December dropped by 27.9 percent YoY to 7.48 million tons,
registering the lowest fall since January 1949.
Japan Iron and Steel Federation said the country's steel production
reduced for the third consecutive month in the view of declining demand
for automobiles amid the worsening economy. The federation also added
that the production at Japan's blast furnace in December 2008 plunged by
24 percent YoY to 5.91 million tons while output from electric arc
furnaces dropped by 40 percent to 1.57 million tons. In 2008, Japan's
crude steel production fell 1.2 percent YoY to 118.7 million tons, the
first annual decline in three years. JISF said that steelmakers are
reducing the production as steel demand from housing and electric
products is coming down.
NPS increases stake in POSCO to 6.3%
South Korean's National
Pension Service (NPS) bought 1.76 million shares in steelmaker POSCO to
increase its stake in the world's No.4 steelmaker to 6.3 percent. NPS
already a top shareholder of POSCO now owns 5.5 million shares of POSCO.
Lee Ku-taek, Chief Executive, POSCO, had offered to resign as the
company brace for its worst monthly results in January due to faltering
steel demand globally as a result of steepening global economic
recession. Lee, who has been at the top job since 2003, said his
decision was to make way for a new leader helping POSCO go through the
worst crisis in its 40-year history. Other big shareholders of POSCO
include Japan's Nippon Steel and South Korea's top mobile operator SK
Prior to announcement, NPS, which had steadily increased its investment
in POSCO since 2007, had a 4.3 percent stake.
Indonesian steel imports double in 2008
Indonesia's imports of iron
and steel doubled in 2008 as rising prices in the first half prompted
steelmakers and users to boost stocks.
According to data from the country's Central Statistics Bureau, imports
of steel raw materials and products rose to USD 11.6 billion last year
from USD 5.5 billion in 2007.
The data showed, billet, slab, pig iron and scrap totaling 9.8 million
tons and worth USD 8.29 billion were imported last year as compared with
7.13 million tons valued at USD 4.17 billion in 2007.
Purchases from overseas of iron and steel products, such as coils,
plates, nails and pipes, rose to 1.52 million tons valued at USD 3.35
billion, compared with 836,064 tons valued at USD 1.37 billion the
Nippon Steel cut prices of chrome sheets
Nippon Steel & Sumikin
Stainless Steel Corp., Japan's largest maker of the alloy, cut the price
of chrome-based sheets for a fourth month on lower costs for
ferrochrome, an ingredient in steel. Sheets will sell for 301,000 yen
($3,298) a ton under February contracts, compared with 304,000 yen a
month earlier, the Tokyo-based company said. The price of nickel-based
sheet remains at 350,000 yen a ton. The deepening recession is reducing
demand for steel from builders and makers of cars and appliances. Nippon
Sumikin is 80 percent owned by Nippon Steel Corp. with the remainder
held by Sumitomo Metal Industries Ltd.
POSCO cuts stainless steel prices by 14 %
South Korea's POSCO, the
world's No.4 steelmaker, cut stainless steel price by up to 14 percent
in its second price reduction in six months in the wake of weak demand
and falling input costs.
"The move is to respond to imports of cheaper stainless products from
Japan and Taiwan as well as to reflect falling ferrochrome prices,"
POSCO said. POSCO has cut prices and production of stainless steel
products since the third quarter of last year as buyers delay purchases
on expectations of lower prices.
But it had to expand production cuts in the fourth quarter, cutting
output by 38 percent from the previous quarter, as a deepening global
economic downturn hit the steel industry hard and weakened demand for
rustproof stainless steel, used in products ranging from kitchenware to
machinery and aircraft.
Indonesia may curb cheaper steel imports
"Indonesian government will
intensify steel imports barriers following the dumping of cheap iron ore
from outside the country." said Anshari Bukhari director general of
metal, machinery & textile industry.
Protecting the local industry is a policy that must be made by the
government, said Anshari. He cited that hot rolled coils are sold at USD
700 per tonne, while imported steel are sold under USD 600 per tonne.
The price of imported products is considered irregular.
He explained that steel imports can only be done by registered
producers. Meanwhile, the entry point for imported steel will not be
limited by the government. He said, "This applies for upstream to
downstream products, from hot rolled coils to nails." Anshari said that
the government's policy requiring the procurement of government services
to use local products will help the national industry. This policy
includes steel products. He added,"The policy can support the weakening
steel industry caused by declining orders. Some industries have begun
cutting their production.
China Coal production up 10.9% in 2008
China Coal Energy Co Ltd of
China produced 100.37 million tons (mt) of raw material coal in 2008, up
by 10.9 percent from the previous year.
The company's sales rose by 3 percent to 87.75 mt during the year. Out
of the total sales, 72.07 mt were shipped to the domestic market while
the rest 15.66 mt went for exports. The growth was also visible in its
coal coke production which reached 3.67 mt, up by 8.8 percent from the
previous year, stated a Tex Report data.
Chinese steel industry to recover by 2009 end or early 2010
The first half of 2009
would be the hardest period for the steel development as well as the
most important time for steel industry to run into stable operation with
state stimulating policies take effects." said Song Jijun,
Vice-Chairman, Hebei Metallurgical Industry Association. He anticipated
that the Chinese steel industry would recover on later this year or
early next year, boosted by the actualization of national policies.
Songs said that crisis has not touched to the bottom, and the worst
period yet to come and serious results will appear in future. Under this
situation, the international economy will come into correction period,
so will China's industries. China is expected to continue the recurrent
winter in economic development.
Owing the current situation of the industry, he said that steel process
gradually recover while the overcapacity becomes more obvious in 2009.
Songs said, “The current trend will change market structure and
competitive systems. And steel makers have to change their strategic
transformation and optimizing structure.
SinoSteel and E United Group ink strategic tie pact
SinoSteel, the largest steel producer service provider, and
Taiwan-based E-United Group inked an agreement for strategic
E-United Group, owns four lines-production, medical care, education and
real estate, is entering in steel business. Both in the mainland and
Taiwan, it has built YIEH United Steel, Yieh Phui Enterprise and
Under the agreement, SinoSteel plans to set up a branch in Taibei to
coordinate with E-United and help organise work there. SinoSteel will
supply raw materials, fuel, accessories, equipment for subsidiaries of
E-United and both companies may jointly build steel service centers and
strengthen exchange of technology as well as hold shares in the
affiliates each other.
Hangzhou Steel unveils production targets for 2009
Hangzhou Iron & Steel Group
Company plans to achieve sale revenue of CNY 50 billion and profit of
CNY 1 billion in 2009.
In this year, the company plans to produce 2.6 million tons of pig iron,
3.4 million of crude steel, 3.3 million tons of steel products and 0.41
million tons of coke at Banshan steelmaking plant and 3.5 million tons
of pig iron, 3.5 million tons of crude steel, 2.2 million tons of steel
products in Ningbo plant.
Hangzhou Iron & Steel Group Company achieved sales revenue of CNY 65.087
billion, pre-tax profit of CNY 2.338 billion and profit of CNY 0.763
billion in 2008, when steel market met with severe challenge caused by
global financial crisis.
Shougang boosts pipeline steel product output
In the mid of gloomy
market, Shougang, a leading Chinese pipe producer, supplied about
500,000 tons of pipeline steel products to domestic pipe manufacturers
which primarily produce ERW 610 pipe and large diameter SSAW pipe.
Meanwhile, the company's sales of the pipe steel products reached
500,000 tons in 2008 from 30,000 tons in 2007. It's said that China
National Petroleum Corporation is one of major buyers who require large
quantities its pipeline steel products per year.
Chinese steel market survey reflects positive trend
Over 80 percent of Chinese
steelmakers and traders see the steel industry will back on track after
Chinese Spring Festival. Since January, the steel prices are stabilising
and trending up amid no heavy inventory pressure, but most of insiders
feel there are many uncertainties to be concerned.
A survey conducted by a consultancy institution on rebar and HRC
prospect says, 64 percent steelmakers believed in correction in rebar
segment, while 49 percent of traders held rebar market will be adjusted,
48 percent, be pushed up and 3 percent, pulled down. On HRC, 55 percent
of the steelmakers predicted it will stay in correction, 30 percent,
move up and 15 percent go downward; while 58 percent of the traders
believed in upside and 42 percent in correction. Steel prices showed up
trend in January that started in mid of November. The composite steel
price increased some 10 percent, however longs and flats price increased
7 percent and 13 percent respectively. In general, the supply is staying
low and inventory at the traders is not much. Leading steelmakers had
lifted ex-w price for some products before the holiday, which also lent
supports to the up-trending market. With a capacity of about 650 million
tons of crude steel, China produced some 500 million tons in 2008. The
numbers show a big room for possible change of the output this year. A
steel analyst said that cut in production was the prime reason behind
decreasing supply and up-trending market at the moment. But this may in
turn stimulate more startups and resumptions and threaten the market
again if the demand recovery lags behind. According to PPI, port
throughput and power generation figures, Chinese economy is improving,
but no considerable signals have noted in real estate, auto and other
major steel consuming industries. Though construction steel and railway
steel may have a better future on the nation's expansion of
infrastructure construction, flats appears lackluster due to bygone of
the fast-growth of machinery and decrease in new ship orders etc.
Chinese steel market see heavier pressure this year than last year on
steel export is possible worsening of economies in US, Europe and the
emerging ones. Steel export is poorly driven this period by narrowing
price gap as the overseas price remains low while domestic price starts
rising. Moreover, protectionism, change of exchange rate etc would all
dim the prospect of steel export and force some enterprises to sell at
home the products originally made for export.
Vanishing of export advantage indicates the home market is facing
heavier pressure of import, risking more volatility.
Hebei Steel moving forward on consolidation
Hebei Steel Group, the
result of a merger of two local steel mills, Tangshan Iron and Steel and
Handan Iron and Steel, intends to go ahead with the consolidation from
raw materials purchasing, production and sales respectively.
The group has set up a mining subsidiary in last September in a bid to
merge the mineral assets of its three listed subsidies. The ore mine of
Chengde Xinxin Vanadium and Titanium, now part of the group, has already
been transferred to the group for free. Moreover, Hebei Iron and Steel
Group is in early talks with Australian iron ore prospector Aurox
Resources to finance the Aurox's 6-million-ton iron ore project in last
Senior official of the group said that "Hebei Steel Group is set to look
for raw materials overseas as it ramps up production and beefs up
competitiveness. Three listed companies would focus on their own
specialty after the merger. Tangshan Steel has an edge in medium plate
production, and produces substantial tonnage of construction Steel.
Handan Steel focuses on steel plate, while Chengde Steel's advantage
lies in vanadium and titanium products. And the group plans to
consolidate the sales departments of its three subsidies into a unified
one to take up the marketing and sales of the whole group. Nevertheless,
three listed companies have their independent financial operation since
the local government is reluctant to suffer the loss of great sum of tax
revenue. However, analysts greeted the deal with skepticism and warned
that consolidation in China's steel industry faced huge hurdles and
would proceed slowly at best. They doubt the fate of the smaller mills
of the group like Wuyang Steel, Xuhuan Steel, and how the Caofeidian
project, a joint venture between Tangshan Steel and Shougang, would
The small mines controlled by the group are very scattered, thus, it
would be a tough task to consolidate the fragmented mining assets in the
US stainless steel consumption down 12%
The US consumed about 12
percent less stainless steel in the first ten months of 2008, compared
with same period of 2007 and imports also slipped about 1 percent.
According to a media report, US consumption of stainless sheet, plate,
bar, rod and wire totaled nearly 1.66 m short tons (s.t) from January
through October. Imports of those products reached 650,500 s.t, bringing
ten-months import penetration to 39 percent - an increase of four
percentage points from the previous year period. Import penetration was
greatest for stainless wires, with imports of 37,000 s.t accounting for
nearly 59 percent of total US consumption (63,200 s.t). Stainless bar
imports penetration was also high (52 percent), with imports at 1,04,500
s.t and consumption at around 2,01,000 s.t. Import penetration was high
too, just under 50 percent, for stainless rods, with imports of 26,200
s.t within total consumption of over 54,300 s.t.Import penetration was
lowest (35 percent) for the most imported and most consumed product -
stainless sheets and strips. Ten-month imports totaled just over
4,00,000 s.t while consumption reached nearly 1.13 m s.t.
Steel inventories in US and Canada continue downward trend
Shipments of steel products
from US and Canadian metals services centers dropped by about 30 percent
for a second consecutive month in December, while inventories of the
metal continued a steady decline in year over year comparisons, said the
latest Metals Activity Report from US based Metals Service Center
December shipments of steel products from US metals service centers
dropped 29.3 percent from year earlier volume to about 2.4 million tons.
Full year 2008 US steel shipments of about 46.8 million tons were down
10.6 percent from 2007. Steel inventories at the end of December of 8.6
million tons were 16.1 percent below December 2007 stocks and at current
shipping rates, equal to a 3.6 month supply.
In Canada, December steel shipments from metals service centers of
322,400 tons were down 29.2 percent from December 2007. Full year 2008
Canadian steel shipments of about 6.7 million tons were 10.9 percent
below 2007 annual volume. Canadian steel inventories at the end of
December of about 1.2 million tons were 34 percent below year end 2007
stocks and at current shipping rates, represent a 3.6 month supply.
The Metals Activity Report, based on data from metals service centers in
the United States and Canada, is produced by the Metals Service Center
Institute and a third party econometrics and strategy firm, McCoy, Scott
EU ends tariff threat on Chinese galvanized steel
The European Union ended a
threat of tariffs on galvanized flat steel from China after EU producers
withdrew a complaint alleging price undercutting by Chinese competitors.
The European Commission closed an inquiry into whether Chinese exporters
sold hot-dipped metallic-coated steel in the EU below cost, a practice
known as dumping. EU makers of the product, used in the construction
industry, include ArcelorMittal and ThyssenKrupp AG. The Eurofer steel
industry lobby group withdrew its dumping complaint in December, a year
after the inquiry began, because EU imports from China fell about 37
percent in 2008. “This withdrawal was prompted by the recent market
turbulence,' the commission, the 27-nation EU's regulatory arm in
Brussels,” sources said. The end of the galvanized-steel case removes
one potential source of EU-China friction over steel trade. The EU is
pursuing three other dumping inquiries involving stainless steel, wire
rod and steel wires from China.
Iron ore on recovery path
Vale do Rio Doce, Rio
Tinto Group and BHP Billiton Ltd. are in talks with Asian steelmakers to
set prices for annual supply contracts. Prices rose 33 percent since
October to $84.50 a metric ton for immediate delivery in China's spot
market after stockpiles in the largest consumer of the metal dropped
last month. Reserves fell 22 percent from the record reached in
September, while shipping costs more than doubled this year as orders
picked up. Imports of iron ore into China rose 6.2 percent in December,
customs data show. China's steelmakers, which cut production in the
second half, are benefiting from the government's 4 trillion-yuan ($585
billion) stimulus plan to spark slowing economic growth. Shares of Vale,
Rio and BHP, which ship 75 percent of the world's iron ore and depend on
China for about 20 percent of their sales, rose more than 50 percent
since their lows last year. More than 50 percent of the 889 million tons
exported by sea last year was sold based on annual contract prices
negotiated between mining companies and steelmakers. Talks between
Shanghai-based Baosteel Group Corp., China's largest steelmaker, and Rio
started in January and any changes take effect April 1, the beginning of
Japan's fiscal year. The increase in the spot market may limit the
decline in contract prices, said Michael Rawlinson, head of mining
resources and energy at Liberum Capital Ltd. in London. Mining companies
will probably agree to a 30 percent reduction from last year. Australian
iron ore for immediate delivery is now just 15 percent less than the
2008 contract price. While China's steel industry recovers, the global
recession is reducing demand around the world. The International
Monetary Fund forecast US gross domestic product will shrink 1.6 percent
in 2009, Japan's will contract 2.6 percent and the euro area will
decline 2 percent. The European Confederation of Iron and Steel
Industries said Feb. 5 that the European Union's first-half steel output
will fall 10 percent as demand declines. Steel prices fell 52 percent to
$542 a ton since peaking in July, according to a global index from Steel
Business Briefing. Iron ore contract prices rose every year since 2003.
Chinese exports dropped for the first time in 13 years in 2008 after the
credit crisis caused the global economy to slow and demand for Chinese
goods to diminish. In June 2008, Baosteel Group agreed to pay
London-based Rio as much as $127 a ton, a 97 percent increase from a
year earlier. The gain was the biggest in at least 26 years, according
to Macquarie Group Ltd.
Magnitogorsk resumes operations after repairs
Iron & Steel, Russia's third-largest steelmaker, resumed operations of
its third converter this month after repairs. The facility, which
converts cast iron into steel, can pour as much as 3.5 million tons of
steel a year, the company, based in Magnitogorsk, Ural Mountains, said.
Russian steelmakers rise as Baltic Dry Index climbs on demand
Severstal and Evraz Group
SA, Russia's biggest steelmakers, surged in London trading after a
measure of shipping costs indicated renewed demand for metals. The
Baltic Dry Index, a measure of the cost to ship commodities, has
advanced for 12 consecutive days. It soared 15 percent in London
recently, the biggest daily gain since at least 1985.
Nucor reconsiders $3 bln plant on economy
Nucor Corp., the largest US
steelmaker by market value, may alter or cancel a plan to build a $3
billion iron-making plant in Louisiana because of the recession and
possible climate-change legislation. Chief executive officer Dan DiMicco
said that a drop in metal use and uncertainty over what laws Congress
may pass to limit greenhouse-gas emissions put the project 'in
jeopardy'. The company's hesitation on the Louisiana plant follows its
decision to delay the start of a $150 million galvanized- products plant
in Alabama completed in the fourth quarter. The average price for
hot-dip galvanized steel coil fell to $660 per short ton as of Feb. 1
from $729 on Jan. 4, according to the Steel Index, compiled by Steel
Business Briefing in London. Nucor is waiting for permits for the
proposed Louisiana facility. The first phase of the plant includes a
blast furnace that can produce 3 million tons of pig iron a year. Nucor
chief financial officer Terry Lisenby said that work to build the plant
in Louisiana or an overseas location was continuing.
ThyssenKrupp to save EU340 million after job cuts
AG, the steel unit of Germany's largest maker of the metal, plans to cut
annual costs by 340 million euros ($437 million) by slashing its
workforce and making operations more efficient. The savings will only
take full effect in the fiscal year ending in 2011, Erwin Schneider, a
spokesman for the Duisburg, Germany-based division, said. The first
effects should be felt this year as the unit employs fewer contractors
in favor of ThyssenKrupp personnel.
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