| January 2006 |  |
| Metal Industry News | |
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Arcelor,
ThyssenKrupp Increase In
late December, Arcelor S.A. offered to up its bid for Dofasco, based
in Hamilton, Ontario. Luxembourg-based Arcelor made an all-cash
offer of $63 (Canadian) per share, above the $61.50 offered by ThyssenKrupp
AG earlier in the month. On
Jan. 3, ThyssenKrupp matched Arcelor’s bid at $63 per share. ThyssenKrupp’s
decision to increase its offer reflects the “quality and strategic
value of Dofasco,” says Dr. Ekkehard Schulz, chairman of the
executive board of ThyssenKrupp. “We will continue to pursue
the acquisition of Dofasco, recognizing the significant growth opportunities
for our combined North American steel operations.” Dofasco’s
board had previously voted to recommend that shareholders accept
the $61.50 offer from ThyssenKrupp, which was solicited by Dofasco.
The ThyssenKrupp bid came on the heels of an unsolicited takeover
attempt by Arcelor of $56 per common share. The
board again recommended the ThyssenKrupp offer after the latest
round of bids. “The
special committee of Dofasco’s board of directors is continuing
to support the ThyssenKrupp offer in its recommendation to Dofasco
shareholders primarily on the basis that it is less conditional
than the Arcelor offer, while offering the same cash price to shareholders,”
says Brian MacNeill, specialty committee board chairman. Before
the ThyssenKrupp response, Arcelor CEO Guy Dolle said his company’s
latest offer reaffirms that “expansion into North America is
a key strategic objective for Arcelor. We believe that Arcelor is
an excellent partner for Dofasco. As a partner of the Arcelor group,
Dofasco will become a stronger, more competitive steel producer
in the North American steel market.” Dofasco
has 35 days to respond to the bid from Arcelor. ThyssenKrupp extended
the date of its offer to Jan. 25. Its original offer expired Jan.
10. Dofasco
is a leading North American steel solutions provider with lines
that include hot-rolled, cold-rolled, galvanized, Extragal, Galvalume
and tinplate flat-rolled steels, as well as tubular products, laser-welded
blanks and Zyplex, a proprietary laminate. World
Steel Production Tops Total
world production for the first 11 months of 2005 was 1,011.6 million
metric tons, according to the International Iron and Steel Institute.
This is an increase of 6.1 percent compared to the first 11 months
of last year. Excluding China, world crude steel production was
694 million tons, 0.9 percent lower than for the same period of
2004. World
crude steel production for the 61 countries reporting to IISI was
estimated to be 94.1 million metric tons in November. This is 4.1
percent higher than for the same month of 2004. Chinese
production was 30.5 million tons in November, an increase of 17.4
percent compared to November 2004. Total crude steel production
in China was 317.7 million tons for the first 11 months of 2005.
This is an increase of 25.5 percent over the same period of 2004.
Crude
steel production in Japan was 9.1 million tons in November, 3.3
percent lower than for the same month of 2004. Total Japanese production
for 11 months of 2005 was 103.4 million tons, up 0.2 percent from
the same period of 2004. Preliminary
crude steel production in the United States was 7.7 million tons
in November, a decrease of 5.6 percent compared to November 2004.
Production in Canada was 1.3 million tons, 5.2 percent behind November
2004. France
produced 1.6 million tons of crude steel in November, 4.5 percent
lower than for November 2004. Production in Germany was 3.6 million
tons for the month, 10.4 percent lower than the same month in 2004.
Production in the United Kingdom was 1.1 million tons in November
2005, 0.1 percent higher than November 2004. Buyers
to Increase Purchases, Survey
respondents—steel end-users—are looking for a steady environment
over the next three to six months. The majority expect incoming
orders, receipts and economic activity to remain about the same.
Commenting
on the ISM figures, analyst Michelle Applebaum of Michelle Applebaum
Research Inc., Highland Park, Ill., noted that steel inventories
had reached historic lows at year’s end. Yet respondents said
they were relatively comfortable with this level, as their receipts
closely matched shipments. Supplies
of hot- and cold-rolled sheet may tighten, Applebaum says. A significant
number of buyers forecast a tightness in supply over the next six
months, though their worries about a shortage of plate have eased. Increasingly,
greater numbers of end-users are indicating plans to order steel
from foreign sources, according to the survey—in fact, nearly
five times the number who sought offshore supplies in August, the
recent low. Carpenter,
Universal Raise Prices on Carpenter
said that demand continues to be very strong for its premium melted
alloy products used in the aerospace, automotive, electronics, medical,
power generation and oil and gas markets. Universal
Stainless & Alloy Products Inc., Bridgeville, Pa., announced
base price increases on all premium melted steels consisting of
vacuum-arc remelted and electro-slag remelted steels. The increases
are 7 percent on all stainless steel remelted grades and 8 percent
on all high-strength low-alloy remelted grades. These price changes
are effective with shipments scheduled for Jan. 30. The company
also noted that it is evaluating its pricing for air melted stainless
and tool steel products. Its surcharge policy remains unchanged. Kaiser,
Boeing Reach Deal “We
are witnessing a significantly increasing need for Kaiser’s
high-quality aluminum products in aerospace manufacturing. In response,
we’re stepping up our commitment to meet our customers’
need for high-quality aluminum sheet and plate products,” says
Jack A. Hockema, Kaiser president and chief executive officer. Kaiser
recently announced a $75 million capital investment to expand its
Trentwood facility, including the addition of a heavy-gauge stretcher,
horizontal heat-treat furnaces and other ancillary equipment, such
as an ultrasonic inspection system, to complement existing capabilities.
The expansion is slated to proceed over the next three years with
full online capacity available in 2008. Alcoa
Receives Contract Contract
monies will be utilized by Alcoa’s technical personnel in conjunction
with the Army’s Tank-Automotive Research, Development and Engineering
Command and through collaborative relationships with major military
land vehicle original equipment manufacturers such as General Dynamics,
BAE Systems, Oshkosh Truck Corp. and Stewart & Stevenson. According
to Alcoa Chief Technical Officer and Vice President Mohammad A.
Zaidi, “We are pleased that the U.S. Army has found value in
our technical and product expertise and believes that aluminum has
the ability to contribute to vehicle transformation by reducing
weight and enhancing structural integrity.” In
other news, Alcoa has purchased the 30 percent interest in the Alcoa
Closure Systems International (Tianjin) Co. Ltd. joint venture currently
owned by its partner China Suntrust Investment Group Co. Ltd. The
joint venture was established in 1994 to produce plastic closures
for beverages. Stainless
Production Asia
is the only region to show positive growth over the first nine months
of 2005. Asia produced 9.4 million tons of crude stainless steel,
up 7.8 percent on the first nine months of 2004. Driving forces
were China and India. Other Asian producers are showing flat or
lower production figures. The
Americas produced 2.1 million tons of crude stainless steel for
the first three quarters of 2005. This is a decline of 5.4 percent
compared to the first nine months of 2004. Stainless
steel production in the Western Europe/Africa region was 6.7 million
tons for the first three quarters of 2005. This is 4.8 percent lower
than for the same period of 2004. Production
also fell in the Central and Eastern Europe region. Production was
191,000 metric tons for the first three quarters, a drop of 16.3
percent compared to the same period of 2004. Analysis
of the 2005 quarter by quarter shows a clear downward direction
in crude stainless steel production. At the end of the first quarter,
global output was 7.5 percent higher than for the same period of
2004. The second quarter also showed an increase of 3.6 percent
compared to the same quarter of 2004. However,
the third quarter of 2005 shows a significant decline in crude stainless
steel production when compared to the same period of 2004. Production
in the third quarter was 5.4 million tons, a decline of 8.2 percent
compared to third-quarter 2004. ISSF
expects world crude stainless steel production in the final quarter
of 2005 to be the same or slightly above the fourth quarter of 2004. Rusal
Begins Production at Modernized Plant The
revamp at Armenal will include installation of direct casting and
rolling equipment, plus full-scale modernization of blank-producing
and foil-rolling mills, widening the range of products Rusal can
manufacture at the plant. Eurofer
Forecasts Modest Eurofer
forecasts 1.9 percent growth in the European Union’s GDP for
2006, which would represent an increase over the 1.4 percent GDP
growth estimated for 2005. Growth
rates in Japan may be down slightly due to higher oil prices, Eurofer
reports, but the prospects for the Japanese economy are now brighter
with domestic demand growing based on robust investment growth and
healthy developments in private consumption. The
outlook for the emerging economies remains good. Government measures
this year to dampen explosive growth in China, even if only partially
effective, may well have led to a deceleration of Chinese import
demand, but should have improved the chances for sustained growth
in the immediate future. China’s GDP in 2005 declined only
slightly from the previous year, but may return to around 8 percent
in 2006. Additionally,
India has a structural internal growth dynamic and strong export
growth. Others, notably Brazil and Mexico, have significantly improved
their macro policies and continue to benefit from commodity prices,
as does Russia, notes Eurofer’s market analysis. These
better conditions in several parts of the world should lead to an
improvement in demand conditions for European manufacturers and
steel producers, Eurofer says. Nonetheless,
certain factors pose threats to the steel market in Europe, starting
with energy prices, Eurofer claims. Energy prices remain a downside
risk, though the impact of higher prices has been reduced since
the economy has become less oil intensive. The price rises are essentially
driven by world demand intensified by refinery shortages in the
U.S. Thus far, this situation has not triggered monetary tightening,
though it remains a risk to GDP development. Manufacturing
and industrial indexes have shown signs of improvement in business
confidence. Indicators of current orders and new orders also are
improving. However, the forecast for industrial production in the
EU is for growth of only 0.8 percent in 2006. This is a substantial
downwards revision and follows a near-halving of the forecast growth
made in Eurofer’s last report. The
fall of the euro over recent months has helped European exporters.
Equally, production of intermediate goods, nondurable goods and
capital goods has shown a modest rise. However, manufacturing output
continues to be hit by the combination of weakening domestic demand
in Europe and the return to trend growth of the global economy following
the strong recovery of 2004. Higher
energy and commodity prices will hit corporate profitability and
may affect investment levels, though durable goods orders are expected
to show slight improvement. The
rise in energy prices following Hurricane Katrina affected the purchasing
power of consumers in Europe and dimmed prospects for private consumption
growth. Unemployment in the EU shows, at best, only marginal improvement.
Fiscal policy is unlikely to be of much help in bringing the EU
out of this low-growth phase, Eurofer reports. Conversely, while the hurricanes knocked world GDP growth below trend in 2005, post-hurricane reconstruction should provide a boost to growth this year. Even without this, prospects for conditions internationally look good for 2006, which bodes better for export-oriented manufacturing in Europe, Eurofer concludes. Briefs Nucor
Steel has added a new side trimmer and scrap chopper to its Decatur,
Ala., cold-mill pickle line. Installed by Butech Bliss, Salem, Ohio,
the new equipment will trim and chop 65,000 psi hot-rolled carbon
steel up to 0.375-inch thick at a maximum line speed of 700 feet
per minute. Southland
Tube, Birmingham, Ala., earned ISO 9001:2000 Quality Management
System certification from SRI Quality System Register. Southland
Tube manufactures and supplies ERW steel tube. “Our entire
management team has been involved with the process and to receive
it as our new mill comes on line producing our larger sizes is especially
gratifying,” says John Montgomery Jr., Southland vice president. Hamilton
Specialty Bar Corp., formerly a division of Slater Steels, and the
United Steelworkers have ratified a new collective labor agreement.
The new agreement will expire on March 31, 2009. Hamilton Specialty
Bar is a Canadian company manufacturing specialty steel bar products
in carbon and low alloy steels serving a broad variety of markets
throughout the world. Century
Aluminum Co., Monterrey, Calif., signed a memorandum of understanding
with Big Rivers Electric Corp. and Kenergy Corp. to replace the
current electricity service agreement that provides power to the
Hawesville, Ky., reduction plant. The proposed new agreement would
restructure and extend the existing electricity service contract
from 2007 through 2023. Century’s Hawesville facility currently
purchases all of its power from Kenergy, a local retail electric
cooperative, under a power contract that expires at the end of 2010.
BestTransport,
Columbus, Ohio, a provider of advanced network solutions for matching
the needs of shippers and carriers, announced a partnership with
Power2Ship Inc., a web-based, collaborative truckload transportation
exchange. BestTransport and Power2Ship sales teams will cross-sell
both companies’ solutions to current and prospective clients. The
Superior Court of Justice in Ontario has approved the sale of AltaSteel
Ltd. to Moly Cop Steel Inc. as part of the bankruptcy restructuring
of Canadian steelmaker Stelco. Moly Cop is an affiliate of Scaw
International Sarl. As in previous noncore asset sale transactions
during Stelco’s restructuring process, the court agreed to
seal certain terms of the sale agreement until the transaction closes.
Braner/Loopco
delivered a massive, heavy-gauge coil slitting line to the new ITC-AL
LLC structural tube producing plant in Decatur, Ala. The slitting
line is capable of processing 98,000 pound by 74-inch wide hot-rolled
coils in gauges from 1/8th- to 5/8th-inch thick and deliver slit
coil to ITC-AL’s structural mills. National
Bronze and Metals Inc., Houston, has selected Invera to implement
STRATIX at its Houston distribution operation and Ohio foundry.
Invera is a metal industry software specialist. NBM will be live
in July 2006 using the full complement of STRATIX features such
as metal price book, shop floor production recording, WiFi functions,
and automated mill test certificate generation. Icon
Machine Tools was named the exclusive Trumpf distributor for machine
tools in Illinois and Eastern Iowa. Icon represents Trumpf’s
line of fabricating machinery and lasers in Missouri, Kansas, Oklahoma,
Arkansas and Southern Illinois. Sheffield Steel Corp., Sand Springs, Okla., awarded a contract for the engineering, supply and turnkey installation of a ladle furnace to Siemens Group Industrial Solutions and Services. The ladle furnace has a capacity of 85 tons. Sheffield, the only steel manufacturer in Oklahoma, will treat up to 750,000 tons of a full range of carbon and low-alloy steel grades in the furnace. People Terrence
E. Geremski, a senior vice president and chief financial officer
at Carpenter Technology Corp., Wyomissing, Pa., will retire in August,
2006. Geremski will continue to exercise full responsibility until
a new CFO joins Carpenter, which is expected to occur before June
30. Gregory
R. Burnett has joined IPSCO, Lisle, Ill., as corporate treasurer.
Burnett arrived at IPSCO from U.S. Cellular Corp., where he served
as director of treasury. He also worked eight years at Inland Steel
Industries. Bill
Kubik has joined Plymouth Tube’s East Troy, Wis., facility
as technical sales manager. Kubik will focus on Plymouth’s
SEA-CURE tubing, a high-corrosion super-ferritic tube solution. William
E. Durham has joined Alliance Metals as Atlanta branch manager.
Durham will focus on sales, territory development and delivery in
the eight Southern states served by the Atlanta branch of Alliance,
a supplier of painted, anodized and mill finish aluminum sheet and
coil. Wise Metals Group, Baltimore, Md., has appointed D.B. “Chip” Flournoy as vice president of Wise Industrial Services. Flournoy, who previously served as Wise Alloys’ director of maintenance and engineering, is responsible for the management and expansion of Wise Metals Group subsidiary Listerhill Total Maintenance Center and oversight of Wise Alloys’ environmental services. |
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