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voda 2 augustus 2019 16:22

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Nippon Steel Cuts FY Guidance on Weaker Q1 Results

Nippon Steel Corp has forecast a 56% drop in business profit in the year through March 2020, as surging iron ore prices and slumping demand are eroding its margins. For the April-June quarter, it reported a 33 percent drop in business profit to JPY 60.6 billion. Nippon Steel said “Business profit is forecast at JPY 150 billion in FY ending March 2020, down from JPY 336.9 billion a year earlier. Nippon Steel EVP Mr Katsuhiro Miyamoto told “The iron ore market’s rally was triggered by Vale’s accident, but is now bolstered by strong demand from China. Steel markets have been falling due to weaker demand, hit by the prolonged US China trade war, but materials markets have been rallying on the back of China’s economic stimulus. This is a new form of China risk.”

He added “We will need to raise prices of our products for industrial customers to meet surging costs.”

Source : Strategic Research Institute

voda 2 augustus 2019 16:24

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Mr DK Mohanty Assumes Charge as Director Commercial of RINL-VSP

Mr Deb Kalyan Mohanty assumed charge as the new Director (Commercial) RINL-VSP on 1st August, 2019. Prior to this assignment, Mr Mohanty worked as Executive Director, Chairman Secretariat in Steel Authority of India Ltd (SAIL). He holds an M Tech degree from Institute of Technology, Banaras Hindu University in Materials Science and Technology.

Mr Mohanty started his career in SAIL as a Management Trainee (Technical) in 1986. He has worked in various assignments in SAIL starting with Bhilai Steel Plant and as a Branch Manager, Regional Manager and Head of Export Group in Marketing Division during his long tenure of 33 years in SAIL.

Source : Strategic Research Institute

voda 2 augustus 2019 16:25

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ArcelorMittal Hopeful that Ilva Steel Plant Will Not Shut Over Pollution

Reuters reported that ArcelorMittal is confident that the Ilva operations in Italy will not have to shut after the firm lost immunity over the plant’s pollution. CFO Mr Aditya Mittal told “At that point in time it is very difficult for us to operate the facility further. We are working with the Italian government to institute legal safeguard measures and our expectation is that those measures would be in place before the 6th of September.”

When asked by an analyst if the company would walk away from the plant if the legal immunity was not renewed, Mr Mittal said the company had certain protections under its contract, but declined to give details.

The Italian parliament in late June revoked the legal immunity that ArcelorMittal received when it bought the operations, granting a grace period until 2023 to bring the plant up to environmental standards. Under the new law, the legal protection at Ilva ends at midnight on September 6.

Source : Reuters

voda 2 augustus 2019 16:29

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Vale Announces Financial Results for Q2 of 2019

Vale announced financial result for the second quarter of 2019. Eduardo Bartolomeo, Chief Executive Officer, commented: "As we progress towards full and effective reparation, 2Q19 has been a transitional quarter for the business. Our response to dam´s breach started to bear fruit to ensure the safety of people and of the company’s operations, as well as to reduce uncertainties and to deliver sustainable results through the supply of a high-quality product portfolio, which will already be reflected in the next quarter".

On 2Q19, the Ferrous Minerals EBITDA totaled USD 4.2 billion, USD 621 million higher than 1Q19.

Base Metals EBITDA totaled USD 465 million in 2Q19, USD 40 million lower than 1Q19, mainly as a result of lower copper prices, as well as lower VNC (Vale at New Caledonia) production resulting in lower fixed cost dilution.

Vale´s Production Report for the second quarter of 2019 was announced on July 22. Vale’s iron ore fines production totaled 64.1 million tonne in 2Q19, 12.1% and 33.8% lower than 1Q19 and 2Q18, respectively. Vale pellet production 1 totaled 9.1 million tonne in 2Q19, 25.5% and 29.3% lower than 1Q19 and 2Q18, mainly as a result of the impacts following the Brumadinho dam rupture and the unusual weather-related conditions in the Northern System in April and early May. Iron ore fines and pellet sales volume was 70.8 million tonne in 2Q19, 4.5% higher than in 1Q19 and 18.2% lower than 2Q18. Although the production volumes decreased quarter over quarter, sales volumes increased 3.2 million tonne due to the consumption of offshore inventories.

Source : Strategic Research Institute

voda 2 augustus 2019 16:29

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Rio Tinto 2019 Half Year Results

Rio Tinto chief executive J-S Jacques said “We have delivered strong financial results with underlying EBITDA of $10.3 billion and EBITDA margin of 47%. Our financial performance was driven by our Pilbara operations with a 72% EBITDA margin, underpinned by strong iron ore prices. We are taking actions to protect the Pilbara Blend and optimise performance across our iron ore system, following the operational challenges which emerged in the first half. Our world-class portfolio and strong balance sheet serve us well in all market conditions. This, together with our disciplined capital allocation, underpins our ability to continue to invest in our business and deliver superior returns to shareholders in the short, medium and long term. Our delivery is in evidence today, with our record interim returns of $3.5 billion.”

Highlights

Underlying EBITDA of $10.3 billion (excluding the contribution from the coking coal assets divested in 2018), was 19% above 2018 first half, with an EBITDA margin7 of 47%.

Operating cash flow of $6.4 billion is presented net of $0.9 billion of tax paid in 2019 first half relating to the 2018 coking coal disposals.

Free cash flow2 of $3.9 billion was 35% higher than 2018 first half.

Cash returns of $3.5 billion announced, comprising record interim ordinary dividend of $2.5 billion, equivalent to 151 US cents per share, and special dividend of $1.0 billion, equivalent to 61 US cents per share.

$4.9 billion underlying earnings3, 12% higher due to a strong contribution from Iron Ore .

Source : Strategic Research Institute

voda 5 augustus 2019 16:19

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ArcelorMittal SA Announced H1 Financial Results

ArcelorMittal South Africa’s operating profit decreased from a profit of ZAR 1224 million in June 2018, the first half-year profit in almost a decade, to a loss of ZAR 222 million. This was largely as a result of lower sales prices and volumes, higher electricity, rail and port tariffs, and sharp increases in primary raw material prices, notably iron ore. This resulted in a headline loss of ZAR 638 million compared to headline earnings of ZAR 54 million for the same period last year. Mr Kobus Verster, Chief Executive Officer of ArcelorMittal South Africa said that “After a positive 2018, the global steel industry is again facing extremely challenging market conditions in the current year as a result of weaker international steel prices, lower demand and significant increases in primary raw materials costs. In the first quarter of the year, the South African economy saw the largest contraction in a decade, mainly due to the decline in the mining and manufacturing sectors. Our results for the first half of the year reflect this challenging operating environment.”

H1 Result Highlights:
2% reduction in South Africa’s apparent steel consumption
4% decrease in liquid steel production with a 9% reduction in steel sales volumes
13% lower international steel prices
15% increase in the cost per tonne of liquid steel driven by sharp rises in the iron ore price and increases in electricity, rail and port tariffs
Business Transformation Programme - to improve international cost competitiveness - is gaining momentum
Aggressive focus on cash generation containing cash outflow to ZAR 1 266 million resulting in higher net debt of ZAR 1 741 million
EBITDA decreased by ZAR 1420 million to ZAR 167 million
Successfully completed the interim stave repair at the blast furnace at Vanderbijlpark
Works, and restarted the Vereeniging electric arc furnace
Improved health and safety record with LTIFR decreasing from 0.83 to 0.38
ZAR 4 500 million borrowing-based facility renewed
Acquiring of the Highveld Structural Mill

Source : Strategic Research Institute

voda 5 augustus 2019 16:20

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Graftech Reports Q2 2019 Results

GrafTech International Ltd announced financial results for the quarter ended June 30, 2019, including net income of USD 196 million, or USD 0.68 per share, and Adjusted EBITDA from continuing operations of USD 284 million. Net sales for the quarter ended June 30, 2019 increased to USD 480 million compared to USD 456 million in the second quarter of 2018. The improvement was due to higher sales volumes and prices of GrafTech manufactured graphite electrodes. These sales volumes increased to 45 thousand tonnes from 42 thousand tonnes in the prior year period. The weighted average realized price of these graphite electrodes was USD 10,014 per metric ton, up slightly from the prior year period.

Net income for the second quarter of 2019 decreased to USD 196 million, or USD 0.68 per share, compared to USD 201 million, or USD 0.67 per share in the second quarter of 2018. Adjusted EBITDA from continuing operations also decreased to USD 284 million in the second quarter of 2019 compared to USD 292 million in the second quarter of 2018. Higher graphite electrode sales volumes were offset by higher cost of sales due to higher prices for third party needle coke.

Cash flow from operating activities decreased to USD 202 million in the second quarter of 2019 from USD 237 million in the comparable period of 2018 primarily due to timing of working capital changes.

Production of 48 thousand tonnes in the second quarter of 2019 increased from 45 thousand tonnes in the second quarter of 2018 due to the completion of debottlenecking projects.

Mr David Rintoul, President and Chief Executive Officer said that "GrafTech reported another successful quarter including net sales of USD 480 million and net income of USD 196 million. Solid financial results enable us to continue to return cash to shareholders and strengthen our balance sheet. To that end, this morning, we announced that our Board of Directors has authorized the repurchase of up to USD 100 million of our common stock on the open market. This equates to the repurchase of up to 15% of our public equity float based on the current market price.”

Source : Strategic Research Institute

voda 5 augustus 2019 16:21

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US DoC issues AD Determination on Threaded Steel Rod from Thailand

The US Department of Commerce announced an affirmative preliminary determination in the antidumping duty investigation of imports of carbon and alloy steel threaded rod from Thailand, finding that exporters from Thailand have dumped steel threaded rod in the United States at a margin of 20.83%. As a result of today’s decision, Commerce will instruct U.S. Customs and Border Protection to collect cash deposits from importers of carbon and alloy steel threaded rod from Thailand based on the preliminary rate noted above. Because Commerce also preliminarily determined that critical circumstances exist, we will instruct CBP to begin suspending entries 90 days before the publication of the preliminary determination in the Federal Register.

In 2018, imports of carbon and alloy steel threaded rod from Thailand were valued at an estimated USD 5.8 million.

The petitioner is Vulcan Threaded Products Inc.

Commerce is scheduled to announce the final determination on or about October 15, 2019.

If Commerce’s final determination is affirmative, the US International Trade Commission will be scheduled to make its final injury determination on or about November 28, 2019. If Commerce makes an affirmative final determination of dumping, and the ITC makes an affirmative final injury determination, Commerce will issue an AD order. If Commerce makes a negative final determination of dumping, or the ITC makes a negative final determination of injury, the investigation will be terminated and no order will be issued.

Source : Strategic Research Institute

voda 5 augustus 2019 16:22

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Kobe Steel Cuts FY Profit Forecast by 66%

Japan’s third biggest steelmaker Kobe Steel Ltd cut its recurring profit forecast for the year to end March 2020 by 67% as the escalating US-China trade war battered steel demand for automobiles and aluminium and copper demand for chips. The company’s recurring profit for the year to March 31, 2020, is now predicted at JPY 10 billion (USD 94 million), down from earlier guidance of JPY 30 billion. A Kobe Steel executive said “Weaker steel demand for overseas automobiles, lower sales of aluminium and copper products used in semiconductor and IT-related segments and system glitches in a US aluminium suspension unit, are also behind slumping profits.”

The company said it will skip dividend payments this year due to the deteriorating profits.

Source : Strategic Research Institute,

voda 5 augustus 2019 16:24

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India’s DGTR Recommends AD Duty on High Speed Steel of Non Cobalt Grade from Brazil, China, Germany

Indian’s commerce ministry’s investigation arm Director General Trade Remedies, after concluding its probe on alleged dumping of High Speed Steel of Non Cobalt Grade being imported from Brazil, China, and Germany, has recommended imposition of anti dumping duty. This steel is used for making high-speed steel-cutting tools. It has concluded that the product has been exported to India from these nations below its normal value, which was resulting in dumping of the product. DGTR said that “The authority considers it necessary to recommend imposition of anti-dumping duty on imports” of the goods from these countries for a period of five years. The recommended duty ranges between USD 1,902.34 and USD 3,263.68 per tonne.”

The final decision to impose the duty will be taken by the finance ministry.

The anti-dumping probe was conducted following a complaint from Graphite India Ltd. It had asked for imposition of the duty on the imports.

Source : Strategic Research Institute

voda 5 augustus 2019 16:26

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Mr Pramod Mittal Arrest in Bosnia Part of GIKIL Hostile Takeover Plan - Global Steel Holding

Moneycontrol News reported that Global Steel Holdings said that Mr Pramod Mittal's arrest in Bosnia was part of a conspiracy to mount hostile takeover of Global Ispat Koksna Industrija. The statement from GSHL pointed to collusion in GIKIL Bosnia with the objective of hostile takeover by dislodging the present management and causing loss of value for its stakeholders and their investments. Alleging that the detention was illegal and against international norms, GSHL asked the Government of BiH to respect foreign investment treaties and vigorously maintain the human rights of any foreign national in Bosnia.

The statement alleged that the detention followed a complaint on July 17 that was lodged by a lawyer and four other employees who had been fired for bad conduct.

Mr Mittal was released on July 30, a week after he was detained for an alleged fraud involving a unit of GIKIL. Apart from Mr Mittal two other senior officials Mr Rajib Das and Mr Paramesh Bhattacharyya were also arrested. Mr Mittal heads the supervisory board of the company.

Source : Money Control

voda 5 augustus 2019 16:27

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JSW Steel USA Files Case with US Court of International Trade over Steel Tariff Exclusion Denial

On July 30, 2019, JSW Steel (USA) Inc filed a complaint against the United States and, specifically, the Department of Commerce for denying its product exclusion requests for certain steel imports that otherwise are subject to a 25 percent tariff under President Donald Trump’s March 2018 proclamation implementing such tariffs under Section 232 of the Trade Expansion Act of 1962. The complaint seeks declaratory relief from the U.S. Court of International Trade determining that the Department’s denial of JSW’s product exclusion requests was arbitrary and capricious and that the requests should have been granted and ordering the Department to provide JSW a refund of any tariffs paid. Alternatively, JSW asks that the matter be remanded to the Department for proper review and consideration. The case is JSW Steel (USA) Inc v. United States, Court No. 19-00133, before the US Court of International Trade.

The complaint alleges, among other issues, that the BIS ignored record evidence establishing that the steel slab JSW USA imports are not presently available in the US market, and instead issued the same boilerplate denial to each and every one of JSW USA’s exclusion requests. JSW said “In doing so, the complaint alleges, the BIS yielded to the objections of three competitive domestic steel producers, United States Steel Corporation, AK Steel Corporation, and Nucor Corporation, and undertook no effort to verify their claims, ignored the conclusive evidence that these companies are unable to produce the subject products in the required quality or quantity, and failed even to offer any reasoned basis for its decisions. The resulting denial of JSW’s product exclusion request was arbitrary and capricious or otherwise unlawful in violation of the Administrative Procedures Act, the complaint claims.”

JSW alleges that the president’s proclamation and the Department’s regulations concerning the review and processing of Section 232 exclusion requests direct that an exclusion be granted for imported steel products that are not immediately available in sufficient quality and quantity in the United States.

JSW references the implementing rule for the Section 232 steel tariffs and exclusion request process in which the term immediately means whether the product is currently produced or could be produced within eight weeks in the United States in order to support its position that the volumes needed by the domestic steel user described in the exclusion request cannot be satisfied unless the request is granted. Arguing that the Department’s rule places the burden on an objector to show that it can produce a substitute product within the requisite timeframe, JSW alleges that the three objectors simply filed blanket objections with no meaningful supporting evidence that they could in fact produce the identified steel products in a sufficient and reasonably available amount.

While other complaints have been filed at the US Court of International Trade concerning the Trump administration’s Section 232 actions, they have unsuccessfully challenged the president’s application of the Section 232 national security provisions to steel imports. Instead, this complaint challenges the administrative process and manner in which the Department’s Bureau of Industry and Security reviews product exclusion requests and denied JSW’s request.

Source : Strategic Research Institute

voda 5 augustus 2019 16:28

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Outokumpu Reports Strong H1 Operational Result

Outokumpu half-year report strong operational execution secured satisfactory performance in the second quarter, Group adjusted EBITDA at EUR 91 million. Mr Roeland Baan President & CEO said that “Outokumpu’s second quarter adjusted EBITDA of EUR 91 million was a satisfactory result in a very tough market environment. I am particularly pleased with our commercial and operational performance in business area Europe – our product mix was strong, and we maintained our market share. In addition, our continued self-help measures including cost-savings and selected development activities yielded tangible results. Our ongoing focus on working capital resulted in strong operating cash flow, and our net debt decreased to EUR 1.3 billion. The stainless steel market remains difficult. In Europe, we are still battling with cheap Asian imports despite the permanent safeguards that became effective in February. The import penetration is back at 30% and the start of the new quota period on July 1 has already led to a further jump in imports. The steel industry is in continuous dialogue with the European Commission to improve the effectiveness of the safeguards. Conversely, imports into the US have stayed at relatively low levels, however, due to the continued distributor destocking, we don’t see significant volume upside in the short term in the Americas.”

Highlights in the second quarter of 2019
Stainless steel deliveries were 584,000 tonnes (668,000 tonnes)1.
Adjusted EBITDA was EUR 91 million (EUR 136 million).
EBITDA was EUR 91 million (EUR 136 million).
Operating cash flow was EUR 177 million (EUR 71 million).
Net debt decreased to EUR 1,307 million (March 31, 2019: EUR 1,370 million).
Gearing was 49.8% (March 31, 2019: 51.6%).
Return on capital employed (ROCE) was 2.9% (March 31, 2019: 4.3%).
In June, Outokumpu signed a EUR 400 million secured term loan to extend debt maturities.

Highlights in the first half of 2019
Stainless steel deliveries were 1,205,000 tonnes (1,312,000 tonnes)
Adjusted EBITDA was EUR 145 million (EUR 269 million).
EBITDA was EUR 131 million (EUR 276 million).
Operating cash flow was EUR 216 million (EUR 110 million).
Net result was EUR -33 million (EUR 74 million).
1 Figures in parentheses refer to the corresponding period for 2018, unless otherwise stated.

Outokumpu’s sales decreased to EUR 1,701 million (EUR 1,883 million). The second-quarter adjusted EBITDA of EUR 91 million was lower than EUR 136 million in the second quarter of 2018 mainly due to a 13% drop in stainless steel deliveries. Spot base prices were substantially lower year-on-year but Outokumpu’s realized prices remained relatively flat driven by improved customer and product mix in all business areas. Ferrochrome profitability was negatively impacted by the lower benchmark price. Raw material-related inventory and metal derivative losses were EUR 16 million compared to gains of EUR 1 million in the second quarter of 2018. Other operations and intra-group items’ adjusted EBITDA decreased to EUR -11 million (EUR 5 million).

During the first half of 2019, Outokumpu’s sales decreased to EUR 3,415 million (EUR 3,553 million). Adjusted EBITDA decreased to EUR 145 million (EUR 269 million), heavily impacted by weaker stainless steel demand. Deliveries during the first six months of the year were 8% lower compared to the same period last year. Graphite electrode and other input costs were higher on average and the Ferrochrome result was lower due to the lower benchmark price. Raw material-related inventory and metal derivative losses were EUR 29 million (losses of EUR 4 million). Other operations and intra-group items’ adjusted EBITDA amounted to EUR -10 million, EUR 25 million lower than during the first half of 2018 which was positively impacted by gains from emission allowance derivatives. EBIT was EUR 16 million (EUR 176 million) and net result amounted to EUR -33 million (EUR 74 million) during the first half of 2019.

Outlook for Q3 2019 - The third-quarter stainless steel market is expected to be challenging. In addition to typical seasonal slowdown in Europe, the underlying stainless steel demand is expected to be further burdened by high import volumes from Asia and weakness in certain customer segments. Consequently, Outokumpu expects its third-quarter stainless steel deliveries in Europe to be lower compared to the second quarter. In the Americas, deliveries are expected to remain at a stable level. The Ferrochrome result will be negatively impacted by the lower ferrochrome benchmark price, as well as weaker demand. The planned maintenance shutdown of a ferrochrome furnace scheduled for September-October is expected to have a total cost impact of up to EUR 10 million during the second half of the year. Outokumpu expects its third-quarter adjusted EBITDA to be lower than in the second quarter of 2019 (Q2/19: EUR 91 million)

Source : Strategic Research Institute

voda 5 augustus 2019 16:29

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AK Steel Announces Second Quarter 2019 Financial Results

AK Steel reported net income of USD 66.8 million for the second quarter of 2019. For the second quarter of 2018, net income was USD 56.6 million. The company’s adjusted EBITDA was USD 151.5 million, or 9.0% of net sales, for the second quarter of 2019. Adjusted EBITDA increased 2% from USD 148.4 million, or 8.5% of net sales, in the second quarter a year ago. Adjusted EBITDA in the recent second quarter included mark-to-market gains of USD 35.4 million from iron ore derivatives, about half of which will offset expected higher costs for iron ore later in the year. For the same period in 2018, the company recorded mark-to-market gains of USD 2.1 million. Not included in the financial results for the second quarter of 2019 were realized gains of USD 8.7 million for iron ore derivatives contracts that settled during the period for which the company had recognized mark-to-market gains in its financial results in prior quarters, compared to USD 9.2 million for the same period in 2018.

Net sales for the recent second quarter were USD 1.7 billion, a 4% decrease compared to the second quarter of 2018. The decrease was primarily due to lower shipments to the automotive market, as expected, and lower spot market selling prices, partly offset by higher selling prices to the automotive market.

Mr Roger K Newport, Chief Executive Officer said that “We reported solid earnings for the second quarter, despite a dramatic decline in carbon spot market pricing from a year ago. This reflects our strategy to focus on value-added products with fixed-price contracts and to deemphasize sales to the volatile commodity spot market. As a result, we generated strong free cash flow that allowed us to meaningfully reduce debt in the quarter.”

Outlook - Based on the change in hot-rolled carbon spot market pricing from approximately USD 690 per ton in April to about USD 555 per ton, the company is updating its annual guidance. The company’s annual guidance had indicated that for every USD 10 change in the carbon hot-rolled coil spot market price, annual earnings would be impacted by USD 5 to USD 7 million. Accordingly, the company now expects net income to be in the range of USD 41 to USD 61 million. Excluding the impact of the Ashland Works closure, adjusted net income is expected to be in the range of USD 118 to USD 138 million and adjusted EBITDA to be in the range of USD 470 to USD 490 million. This updated guidance aligns with the company’s previous guidance.

Source : Strategic Research Institute

voda 5 augustus 2019 16:33

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Vietnam Spends Less Importing More Steel In 7 Months

Vietnam spent nearly 5.7 billion US dollars importing 8.4 million tonnes of steel and iron between January and July, down 2.4% in value but up 4.5% in volume against the same period last year. In July alone, the country imported nearly 1.3 million tonnes of the products worth 848 million US dollars, up 6.7% in volume but down 3.9% in value against July 2018.

Vietnam Steel Association said that Vietnamese steel sector annually imports 90-95% of materials for production, including iron ores, metal scraps, and coke fuel, mainly from China, South Korea and Japan.

In 2018, Vietnam poured nearly 9.9 billion US dollars into importing roughly 13.6 million tonnes of steel and iron, down 9.6% in volume but up 9% in value against 2017.

Meanwhile, the country reaped 4.6 billion US dollars from exporting 6.3 million tonnes of the products, seeing respective surges of 44.8% and 33.5 percent, according to its General Statistics Office.

Source : Xinhua

voda 5 augustus 2019 16:36

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Evraz Q2 2019 Trading Update for Steel Segment

In Q2 2019, EVRAZ pig iron and crude steel output remained mostly flat QoQ at the Russian mills. Output of iron ore products fell by 2.8% QoQ to 3.5 million tonne, mainly due to unscheduled downtime of burning machine no. 1 at EVRAZ KGOK and a planned maintenance outage of the Tashtagol mine at Evrazruda.

In Q2 2019, external sales of steel products rose by 6.3% QoQ, primarily due to higher demand. Sales of semi- finished products were mostly flat QoQ. Sales of finished products grew by 11.4% QoQ, mainly driven by higher sales of construction products, which rose by 10.8% QoQ following an uptick in demand due to the construction season. Sales of final vanadium products climbed by 29.7% QoQ, as lower prices and FeV stocks at end users have stimulated spot demand, particularly in the EU, Asia and North America.

In Q2 2019, total output of steel products surged by 10.0% QoQ, with EVRAZ Pueblo’s output up 13.1% QoQ amid greater downstream demand following the rail mill restart after unplanned downtime in Q1 2019. Sales of semi-finished products jumped by 82.1% QoQ following higher demand from customers. Sales of construction products rose by 4.5% QoQ due to higher demand and favourable weather. Railway product sales climbed by 18.8% QoQ, as production volumes recovered after the rail mill outage in Q1 2019. Sales of flat-rolled products went up by 5.0% QoQ as a result of a planned maintenance outage and a railcar supply shortages in Q1 2019. Tubular product sales edged up by 1.6% QoQ due to the restart of coating operations at EVRAZ Regina.

Prices for construction products went down in Q2 2019, primarily driven by falling scrap prices and sluggish market demand. Prices for flat-rolled products were lower during the period as service centres temporarily curtailed purchases amid rapidly falling scrap prices and market uncertainty, which in turn was driven by soft demand. Prices for tubular products decreased slightly during Q2 2019, reflecting softening oil country tubular goods markets in addition to a seasonal decline in demand.

In Q3 2019, crude steel output is expected to remain at the average level seen in Q1-Q2 2019. Tubular sales volumes should increase compared with Q2 2019, as OCTG is expected to show healthier volumes. Meanwhile, volumes of line pipe and large-diameter pipe are expected to benefit from delayed coating and delivery recognition in Q2 2019. Sales of flat-rolled products are forecast to marginally improve over the Q2 2019 volumes, driven by customer production schedules and an expected uptick in purchasing activity from service centres.

Source : Strategic Research Institute

voda 5 augustus 2019 16:36

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MMK Group Announces Financial Results for Q2 of 2019

Q2 2019 highlights vs Q1 2019 - In Q2 2019, revenue grew 8.9% QoQ thanks to seasonal growth in sales of finished products, improvements to the sales mix and growth of prices on the domestic market. In Q2 2019, the cost of sales grew 9.8% QoQ, faster than revenue, mainly due to higher iron ore prices on global markets. EBITDA increased by 13.0% QoQ. The EBITDA margin amounted to 24.9%. Growth of prices for steel products on the domestic market exceeded growth of cost of sales; as a result, EBITDA per tonne of steel products increased to USD 168 (up 13.5% QoQ). The net profit for Q2 2019 amounted to USD 272 million, up 20.9% QoQ. One-off factors affecting net profit included an FX loss of USD 6 million.

H1 2019 highlights vs H1 2018 - In H1 2019, revenue declined by 7.8% YoY due to lower sales volumes as a result of maintenance work at blast furnace No. 7 and the converter, as well as the reconstruction of hot-rolling Mill 2500 and lower prices (down USD 40 per tonne, or by 5.1%). EBITDA declined by 22.6% YoY and amounted to USD 937 million. This was due to lower production volumes amid a decline in global prices for steel products, an increase in prices for raw materials, and the weaker ruble. At the same time, the margin was supported by an increase in share of HVA products of the overall sales mix to 49.0% and growth of domestic sales (including the CIS region) by 7.4% YoY. The Company’s profitability over the period saw a positive effect from the operational efficiency and cost optimization program of USD 40 million in H1 2019 (including USD 22 million in Q2 2019).

Capital expenditure - In Q2 2019, capital expenditure amounted to USD 246 million, up 55.7% QoQ and in line with the investment programme schedule. This growth QoQ was due to payment for equipment to be used at the new coke battery. The Company expects that capex for 2019 as a whole will be in line with the investment programme, with major investment projects are being implemented at a faster pace than envisioned in the initial plan. MMK Group’s capex in H1 2019 amounted to USD 404 million, down 18.2% YoY.

Steel segment (Russia) - Revenue for Q2 2019 amounted to USD 1,866 million, up 4.6% QoQ. This growth was due to higher sales volumes and positive price trends. It was also supported by improvements to the sales mix and higher sales in the domestic market. The segment’s EBITDA for Q2 2019 amounted to USD 481 million, up 15.1% QoQ. Key factors affecting EBITDA included growth of production volumes amid higher prices and volumes in the domestic market. The Company’s profitability over the period saw a positive effect from the operational efficiency and cost optimization program of USD 40 million in H1 2019 (including USD 22 million in Q2 2019). The cost of sales for a tonne of slab in Q2 2019 amounted to USD 320 (compared to USD 304 per tonne in Q1 2019). Key factors for this growth were higher prices for iron ore amid a higher share of pellets used in the blast furnace charge, as well as the strengthening of the ruble.

Steel segment (Turkey) - MMK Metalurji’s revenue for Q2 2019 amounted to USD 144 million, up 10.8% QoQ. This growth was due to an increase in the volume of sales of finished products by 11.8% QoQ thanks to higher export sales. Sales of finished products in H1 2019 declined by 13% YoY due to lower sales of hot-rolled steel sheet amid high volatility in prices for these products and low margins. HVA products accounted for 97% of the total, up from 91% in H1 2018. External unfavourable factors and the persistently challenging economic situation in Turkey have resulted in a significant decline in demand for construction steel products. MMK Metalurji’s efforts to reduce costs and relocate sales among markets helped limit the EBITDA loss in Q2 2019.

Coal segment - The volume of coking coal production in Q2 2019 decreased by 33.2% QoQ and amounted to 978 thousand tonnes. This decrease was due to maintenance works during the quarter. Coking coal production in H1 2019 increased by 11.6% YoY to 2,442 thousand tonnes. The decrease in revenue for 2Q 2019 of 40% QoQ to USD 48 million was due to a reduction in concentrate output. This in turn was due to the ramp-up of the beneficiation plant towards full capacity following reconstruction. The facility is expected to reach full capacity in 4Q of this year. In Q2 2019, the segment’s EBITDA declined and amounted to USD 12 million. This was due to a decrease in the production and processing of Group’s own coking coal.

Source : Strategic Research Institute

voda 5 augustus 2019 16:37

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TimkenSteel Announces Second Quarter of 2019 Results

TimkenSteel reported 2019 second quarter net sales of USD 336.7 million and a net loss of USD 4.4 million or minus USD 0.10 per diluted share. In the same quarter last year, net sales were USD 413.5 million with net income of USD 8.4 million or USD 0.19 per diluted share. Adjusted EBITDA for the second quarter of 2019 was USD 27.5 million, a decrease of USD 3.4 million over the same quarter last year. Mr Tim Timken, chairman, CEO and president said that "Despite demand weakness in certain end markets, we continue to focus on expanding market share in our key markets while maintaining price and improving product mix. During the quarter we continued to execute our profitability improvement plan which included cost reductions and restructuring in our technical and commercial organizations to further drive innovation and focus on our key growth areas such as value-added components, energy products and government business."

SECOND QUARTER OF 2019 FINANCIAL SUMMARY

Second quarter net sales decreased USD 77 million or 19% compared with prior year.

Ship tons were 248,100, a decrease of 20% from the second quarter of 2018. The decrease was due primarily to lower shipments in the industrial and oil country tubular goods end markets.

The decline in net sales compared with the prior-year period is due to lower volume as well as lower surcharges of approximately USD 26 million. Surcharge revenue represented a 25% decrease from the prior-year period.

Decreases were partially offset by favorable price and mix, as the company realized the benefit of prior period price increases and a focused strategy to sell its higher value products.

Second quarter of 2019 Adjusted EBITDA decreased to USD 27.5 million compared with USD 30.9 million for the same period a year ago.

Improvements in pricing combined with lower OCTG billet volume drove an increase of approximately USD 13 million in price and mix.

The company continues to execute profitability improvement actions aggressively, with a focus on cost savings, improved efficiency, better resource allocation and growth in targeted markets.

Recent restructuring actions were implemented to enhance profitability. This resulted in the elimination of approximately 55 salaried positions which is expected to generate savings of approximately USD 2 million in 2019 and annual savings of approximately USD 7 million beginning in 2020.

The company raised its profitability improvement target to approximately USD 60 million on an annualized basis, with approximately USD 35 million expected to be realized in 2019.

THIRD QUARTER OF 2019 OUTLOOK
Shipments are expected to be 10% below the second quarter of 2019.
Net loss is projected to be between USD 17 million and USD 27 million.
EBITDA is projected to be between (USD 5) million and USD 5 million.
Aligning production with demand will result in a decline in planned production levels in the third-quarter 2019 to 47% melt utilization from 57% utilization last quarter. This lower level of production, combined with the second half of planned annual maintenance of approximately USD 6 million dollars, will have a negative impact on fixed cost leverage and profitability during the third quarter.
LIFO is projected to be a benefit of approximately USD 6 million.
2019 capital spending is projected to be approximately USD 50 million.

Source : Strategic Research Institute

voda 5 augustus 2019 16:37

0

Carpenter Technology Reports Fourth Quarter and Fiscal Year 2019 Results

Carpenter Technology Corporation announced financial results for the fiscal fourth quarter and year ended June 30, 2019. For the quarter, the company reported net income of USD 48.9 million. Mr Tony Thene, Carpenter Technology’s President and CEO said that “The fourth quarter marked the end to a successful year as we generated our strongest quarterly operating income performance since fiscal year 2013. Key highlights of the quarter include SAO delivering 20.4% adjusted operating margin, positive total company free cash flow of USD 115.8 million, and our 12th consecutive quarter of year-over-year backlog growth. The fourth quarter’s operating income results were driven by a continued strong product mix as we generated double digit sequential and year-over-year revenue growth in the Aerospace and Defense end-use market given our sub-market diversity and broad platform exposure. Also, growth in the Medical end-use market remained robust as we continued to benefit from our direct customer relationships with leading OEMs and increasing demand for our high-value titanium solutions.”

He added “Our fiscal year 2019 performance demonstrates the value of strong execution of our commercial and manufacturing strategies which drove consistent year-over-year revenue and earnings growth in the Aerospace and Defense and Medical end-use markets. During the year, we made significant progress on obtaining the necessary Aerospace qualifications for our Athens facility. We also continued to look to the future and took innovative steps to strengthen our leadership position through targeted investments in key emerging technologies. This past year we significantly advanced our additive manufacturing platform by adding powder lifecycle management solutions through the acquisition of LPW Technology Ltd. In addition, the expansion of our soft magnetics capabilities remains on track as we seek to capitalize on the disruptive impact of electrification across multiple end-use markets.”

Net sales for the fourth quarter of fiscal year 2019 were USD 641.4 million compared with USD 618.0 million in the fourth quarter of fiscal year 2018, an increase of USD 23.4 million (4%), on 4% lower volume. Net sales excluding surcharge were USD 533.3 million, an increase of USD 38.8 million (8%) from the same period a year ago.

Operating income was USD 67.9 million compared to USD 60.0 million in the prior year period. These results primarily reflect strong commercial execution and improved market conditions in key end-use markets compared to the prior year period.

Cash provided from operating activities in the fourth quarter of fiscal year 2019 was USD 175.1 million, compared to USD 118.5 million in the same quarter last year. The increase in operating cash flow primarily reflects a reduction in inventory coupled with higher sales during the quarter. Free cash flow in the fourth quarter of fiscal year 2019 was USD 115.8 million, compared to USD 55.9 million in the same quarter last year. The increase in free cash flow was primarily due to higher cash from operating activities in the quarter. Capital expenditures were USD 49.7 million in the fourth quarter of fiscal year 2019 compared to USD 54.0 million in the same quarter last year.

Total liquidity, including cash and available revolver balance, was USD 401.3 million at the end of the fourth quarter of fiscal year 2019. This consisted of USD 27.0 million of cash and USD 374.3 million of available borrowings under the Company’s credit facility.

Source : Strategic Research Institute

voda 5 augustus 2019 16:38

0

Tenaris to Contributes CAD 36 million at Canadian Factories

Tenaris, with a contribution from the Federal Government, has announced a 36 million CAD investment to expand its product capabilities and improve its operational performance at its seamless and welded steel pipe mills to support domestic manufacturing for the oil and gas sector. A majority of the funding will go toward the installation of a new premium connections Line, expanded capacity for sour service grades, and new outside diameters at AlgomaTubes in Sault Ste. Marie, ON. The new premium connections Line will thread TenarisHydrill proprietary Wedge and Blue® Series connections, offer sour service grades capacity for all the products Canada demands, and add capacity to produce a more complete diametre range. The infrastructure upgrades are projected for completion by the end of 2020. Once operating and at full capacity, Tenaris will add nearly 90 full-time jobs.

In addition to the AlgomaTubes investment, Tenaris also announced an improvement project at Prudential, its welded pipe mill in Calgary, AB. The funds will be used to upgrade ultrasonic equipment for line pipe testing to supply customer orders with increased inspection requirements.

The Canadian market has been challenged by a decrease in drilling activity of about 30 percent this year vs. 2018, market access pipeline shortages and a surge of non-NAFTA imports to Canada. The contribution from the Federal of government is important to moving forward with this investment at this time.

Guillermo Moreno, Tenaris President, Canada said that “The development of Canada’s energy resources requires high quality OCTG products and expanding our service offerings is crucial to support the energy industry. The new investment will also strengthen our Rig Direct® business model with shorter lead times and increased flexibility, while improving our customer support.”

Mr Moreno said that “We would like to recognize our stakeholders here with us today who have shown their support for the important role Canadian energy and a domestic manufacturing supply chain has to the Canadian economy. Tenaris remains committed to the safe, efficient development of the country’s energy resources, and these investments will help expand our product offer with domestic solutions.”

Source : Strategic Research Institute

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