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Tata Steel Raises INR 1,000 Crore via NCDs

Tata Steel announced that it has raised IR 1,000 crore through allotment of non-convertible debent. Tata Steel said "The Committee of directors today approved allotment of 10,000 unsecured, rated, listed, redeemable, NCDs of face value INR 10,00,000 each, for cash aggregating to INR 1,000 crore, to identified investors on private placement basis. It said the issue consisted of Series A and Series B of 5,000 NCDs each. While Series A had a floating coupon rate of 7.85 percent per annum, the other Series had a fixed coupon rate of 7.95 per cent. An amount of INR 500 crore was raised in each series.”

The NCDs are proposed to be listed on the BSE's Wholesale Debt Market Segment.

Source : Strategic Research Institute
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Indian Steel Ministry to Develop 4 Slurry Projects

PTI reported that Finance Ministry constituted panel said India’s Ministry of Steel has identified four slurry pipeline projects totalling over INR 8,000 crore to be implemented over financial years 2020-2025. According to the task force to draw up the National Infrastructure Pipeline "Ministry of Steel has identified four slurry pipeline projects, to be implemented over fiscals 2020-2025 and the total capital expenditure for these identified projects is estimated at INR 8,225 crore. Out of the four, three projects worth INR 5,441 crore are to be implemented through public-private partnership route, while one slurry pipeline project of INR 2,784 crore is to be implemented on Engineering Procurement and Construction mode.”

A slurry pipeline is a specially engineered pipeline used to move ores such as coal, iron or mining waste over long distances.

The task force was set up following Prime Minister Narendra Modi's Independence Day speech of 2019 where he outlined an investment of over INR 100 lakh crore in infrastructure.

Source : Business Today
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Stelco Signs 8 Year Deal with US Steel to Buy Iron Ore Pellets

Stelco Holdings Inc announced that its wholly-owned subsidiary, Stelco Inc, has entered into a new eight-year pellet sale and purchase agreement with United States Steel Corporation which runs until January 31, 2028. This contract provides for the supply of 100% of Stelco's anticipated requirements of iron ore pellets at Lake Erie Works over the term of the agreement, including volume required to support the expansion in production projected after the upcoming blast furnace upgrade project. The Pellet Agreement supersedes and replaces the current agreement with US Steel, which was set to expire on January 31, 2022.

Concurrently, Stelco entered into an option agreement with US Steel granting Stelco a long-dated option to purchase a 25% ownership interest in a to-be-formed Joint Venture that will own 100% of US Steel's iron ore mine located in Mt Iron in Minnesota and related infrastructure including the pellet plant. The Minntac Mine is a fully-integrated iron ore mine operated by US Steel and is the largest iron ore operation in the United States, with annual production capacity of up to 16 million tons per year1 of iron ore pellets. The Option is exercisable by Stelco at any time following the payment of the Initial Consideration until January 31, 2027.

Stelco will pay USD 100 million, in cash, to US Steel in consideration for the Option. The Initial Consideration is payable in five USD 20 million installments, with the first installment paid upon closing of the Option Agreement and the remaining four installments payable every two months thereafter. Upon the exercise of the Option, Stelco would pay a net exercise price of USD 500 million.

Source : Strategic Research Institute
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Accident Reported at Continuous Casting Shop in RINL Vizag

Telangana Today reported that a mishap occurred in Visakhapatnam steel plant on Thursday as a ladle carrying metal weighing about 120 tonnes slipped in the Continuous Casting wing behind CCM-3. The cause of the accident was due to the main hoist of the crane developing a technical snag

However, there were no casualties nor any major damage to equipment or machinery.

Source : Telangana Today
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Danieli Olivotto Ferrè Multiline Roller Hearth Furnace Achieves Good Results at CEMTAS Bursa

The newly supplied plant in operation at CEMTAS in Bursa in Turkey is an innovative concept for hardening and tempering of alloyed steel bars for automotive markets. It processes alloyed steel bars in diameters from 15 to 100 mm, with an overall output up to 30,000 tonnes per year. There, hardening -austenitizing and quench and tempering, normalizing in austenitizing furnace, soft annealing and stress relieving in tempering furnace, are performed in continuous mode. The key element used as common guideline to reach the performance targets is provided by the roll technology and design. The equipment is designed with a new concept of multiline inclined and shaped rolls. Covered by Danieli patent, this specific solution is based on the concept of continuous rotation of selected bars during their handling inside the austenitizing furnace and the subsequent quenching system, in order to improve bar quality in terms of mechanical/metallurgical properties and excellent straightness.

Following, the excellent results already achieved:
- Hardness variation < +/- 1HRc along the surface of the bars
- Hardness variation < +/- 2 HRc from top-surface to core of the bars
- YTS = 850 ÷ 906 N/mm2
- UTS = 976 ÷ 1023 N/mm2
- Elongation = 15.6 ÷ 16.7 %
- Reduction Area = 60 ÷ 61 %
- Martensite percentage on the bar surface (by water quench) > 90%
- Martensite percentage on the bar core (by water quench) > 95%
- Decarburization < 0.003 * D (diameter of bar)
- Added bending on the bar < 1 mm/m

The plant is in industrial operation following a smooth commissioning period and final acceptance.

Source : Strategic Research Institute
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Algoma Steel Lays Off 70 Full-Time Workers due to COVID-19

As a result of COVID-19 market impacts, Algoma Steel Inc announced that the company will be adjusting production to match current demand and to curtail costs. It said “A market recovery is not anticipated in the near-term, and market conditions remain unstable. Therefore Algoma Steel is taking appropriate measures to ensure the Company continues to have the financial resilience and resources required, while maintaining reliable supply and product quality for Algoma’s customers. Effective immediately, Algoma Steel will commence temporary layoff proceedings impacting approximately 70 full time hourly and salaried personnel from across the operation. A further 80-90 employees will displace full and part-time contract personnel.”

Algoma Steel Chief Executive Officer Michael McQuade said “We have taken this difficult decision to prudently sustain our financial strength during this ongoing period of broad economic and market instability, as economies continue to be affected by COVID-19 and related measures. As a steel producer, we are an essential service and we do not take that responsibility lightly. We continue to serve the needs of our customers by delivering quality steel products. Our first priority is to operate safely, ensuring the wellbeing of everyone in our workplace. We recognize the impact of this decision on our employees, their families, and the community. Algoma Steel will continue to monitor market conditions closely, and may make further adjustments as the business may require. We are taking a responsible approach today to ensure the sustainability of Algoma Steel tomorrow.”

Source : Strategic Research Institute
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EVRAZ Laying off 200 Workers in Pueblo

The Pueblo Chieftain reported that more than 200 workers are facing temporary layoffs and many others are subject to furloughs at EVRAZ Rocky Mountain Steel Mill due to the economic downturn in the oil and gas industry. EVRAZ spokesman Patrick Waldron confirmed more than 100 employees will be temporarily laid off once orders are completed in the next few weeks at the pipe mill. He also confirmed all salaried employees, including himself, will be required to take temporary furloughs of one week a month. Mr Waldron said “The furloughs of supervisors will be staggered. Steel-making of rod and bar products continues in Pueblo.”

He added “It is an extremely hard time right now and there is no way of telling how long this will be, but we are calling it temporary until a ramp up in the market changes the oil and gas industry. For the oil and gas industry this is unprecedented with the circumstances of the economic shock brought on by the coronavirus on top of the oil prices dropping.”

Source : Strategic Research Institute
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Tenaris Repurposes Industrial Production to Manufacture Face Shields

Tenaris’s seamless mill in Campana in Argentina set up a task force to produce face shields for employees, first responders and medical workers using existing manufacturing equipment. With 3,900 face shields delivered, the mill plans to contribute additional 36,100 units to the communities of Campana and Zárate. The project was a collaboration between several production areas, including lines that typically produce pipe protectors and automotive parts. The initiative involved dozens of Tenaris employees who designed the prototype, retooled the molding machines, adjusted programming on 3D printers, and managed procurement and logistics.

Five community hospitals in Campana and Zárate, the Red Cross, volunteer firefighters, the police and medical first responders received face shields. Mill employees also saw their personal protective equipment reinforced with new face protectors.
Production and distribution of face shields follows earlier deliveries of ventilators, face masks, surgical gowns, gloves, glasses and antiseptic gel. As part of the response plan developed in partnership with local communities, Tenaris is also converting company-owned Hotel Siderca into a treatment center for COVID-19 patients with mild symptoms.

Source : Strategic Research Institute
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DINSDAG 5 MEI 2020
11:00 Aperam - Jaarvergadering

WOENSDAG 6 MEI 2020
07:00 Aperam - Cijfers eerste kwartaal

DONDERDAG 7 MEI 2020
07:00 ArcelorMittal - Cijfers eerste kwartaal
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London Court of Appeal Dismisses ArcelorMittal Application against High Court Order in Case Essar Steel

PTI reported that the Court of Appeal in London has dismissed an application filed by ArcelorMittal seeking permission to appeal against the London High Court’s judgment that refused a worldwide freezing order against the parent company of Essar Steel Ltd and members of the promoter family. The high court order of March 30 came as steel maker ArcelorMittal looked to enforce USD 1.5 billion arbitral award stemming from a soured supply agreement. High Court judge Andrew Henshaw had found no merit in the case being brought by ArcelorMittal to enforce a worldwide freeze on Essar’s assets to protect them from dissipation, while the former pursues parallel legal remedies.

ArcelorMittal USA had petitioned the court that the Essar Group which owed the former USD 1.5 billion in an earlier arbitration award had moved assets around in such a way as to take them out of the hands of the judgment creditors. ArcelorMittal USA’s key argument that the Ruia family reclassified assets of Essar Steel in India so as to take them out of the balance sheet of the judgment debtor’s books did not find favour with the court.

Source : Strategic Research Institute
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India Rating Sees Only INR 3000 Correction in Steel Prices in India

India Ratings and Research in April 2020 edition of its credit news digest on India’s steel sector said that “With the relaxation in lockdown in many districts across the India starting 4 May 2020, Indian steel players will look to gradually increase capacity utilisations. The key challenges in the near term are manpower availability and ensuring finished inventory to normal levels. While steel and its raw material commodities have been classified as essential goods, the logistical constraints may remain due the non-availability of fleet and longer trip time.”

It said “The domestic steel demand in 2020-21 is likely to drop by around 12%-15% YoY with end-use industries being closed down and limited demand growth expected over the near term. Demand from the infrastructure, construction and real estate sectors is likely to be subdued first half of 2020-21 with the lockdown in first quarter of 2020-21 and the monsoon season. Furthermore, demand from the automobile, white goods and capital goods sectors is likely to reduce, with consumers deferring discretionary spends in the near term. As such, government spending on infrastructure is likely to be the key driver for a gradual recovery over second half of 2020-21.

The agency expects an inventory build-up primarily of semi steel products with downstream facilities of most players being closed during the lockdown. Large producers have kept their blast furnaces operational at lower capacity of 35%-50%, due to the high cost of restarting the furnace in case it was to be shut. However, small and mid scale producers with induction and electric arc furnaces shut down their operations with the onset of the lockdown. Domestic crude steel production has been lower by 9.5% mom in March 2020.

The built-up inventory shall put pressure on steel prices post lockdown and the agency expects a correction of INR 3,000 per tonne.

Source : Strategic Research Institute
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Tata Steel CEO & M Mr TV Narendran Steps Down as ISA President

Economic Times reported that Indian Steel Association secretary general Mr Bhaskar Chatterjee confirmed that Tata Steelchief executive and managing directo Mr TV Narendran has decided to step down as president of Indian Steel Association.

Formed in 2014, Indian Steel Association is an umbrella industry body representing 18 full and affiliate members, including the primary steel producing companies in India such as Tata Steel Ltd, JSW Steel Ltd, Steel Authority Of India Ltd, Rashtriya Ispat Nigam Ltd, Jindal Steel And Power Ltd, Bhushan Power & Steel Ltd, Tata Steel BSL Ltd and ArcelorMittal Nippon Steel Ltd as primary members. Affiliate members include Electrosteel Steels Ltd, Arjas Steel Pvt Ltd, Institute For Steel Development And Growth-INSDAG, Jindal Stainless, Karnataka Iron & Steel Manufacturer’s Association, Monnet Ispat & Energy Ltd, Shyam Steel Ltd, Tata Steel Long Products Limited, Orissa Metaliks Private Ltd and Shyam Metalics & Energy Ltd

Source : Strategic Research Institute
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Indian Car Makers Report Zero Domestic Sales in April 2020

As expected, as per media reports, the Indian automotive industry has seen its worst month ever as zero units have been sold in April 2020 across the entire country due to the shutdown of showrooms and manufacturing facilities.

PV Sales in India in April 2020 - ZILCH

Source : Strategic Research Institute
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FICCI Suggests Measures for Recovery of Indian Steel Industry

Federation of Indian Chambers of Commerce and Industry has suggested that the Indian Government must look to fast track investments in the infrastructure sector to help the steel industry recover from the demand slump for steel products that has arisen due to Covid-19 pandemic. FICCI said “This infrastructure push could be given by front loading the investment in National Infrastructure Pipeline.”

FICCI has also recommended

1. Construction activities should be allowed to operate with precautionary measures as guided by the government directives

2. Fast-tracking operationalization of all steel-consuming industries should be accorded the highest priority at present.

3. To explore and encourage newer applications for steel products, including steel furniture, steel usage at railway platforms etc

4. Recommends for incorporating in Life Cycle Analysis basis in procurement clauses issued by public agencies and state governments

5. To give preference for domestically manufactured steel products

6. To incorporate the entire supply chain of the sector, from integrated steel producers, secondary steel makers to pipes, tubes, re-rollers, fabricators, downstream and servicing units, loha mandis, etc into essential services, allowing them to operate with precautionary measures as guided by the government.

7. Monitory Policy relaxations by way of policy rate cuts, liquidity infusion into the market and quantitative easing are not destressing the steel players, especially the secondary steel sector. It thus recommends for an extension of additional three months moratorium granted on payment of interest and repayment of loans; without any penal interest and interest-free financing/at nominal rates for MSMEs in the sector to revive.

Source : Strategic Research Institute
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SAIL Emerges as Largest Miner for Steel Making Input Minerals in 2019-20

Steel Authority of India Limited has emerged as the largest miner for steel making input minerals in FY 2019-20. While Coal India Limited is the overall largest miner in the Country, SAIL is involved in mining of iron ore, fluxes limestone and dolomite, coking coal and non-coking coal for its internal requirements and has become next to Coal India Limited in mining in India in 2019-20. Iron ore, fluxes and coal are essentially required for making steel in integrated steel plants. SAIL mined a total of 32.406 million tonnes of all these minerals during financial year 2019-20 which is an increase of almost 4% over the corresponding period of previous financial year. Incidentally, SAIL was also the largest crude steel producer during FY’20 in India.

It is significant to mention here that SAIL meets its entire iron ore requirement from its captive mines. Its coal requirement is met through imports and domestic sources including its captive mines. The requirement of fluxes is met partly through own sources and partly through imports and other indigenous sources. The SAIL mines are being managed by the Raw Materials Division of the Company.

Source : Strategic Research Institute
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China Steel PMI in April Improves to 45.9

China Federation of Logistics and Purchasing’s China Steel Logistics Committee announced that the purchasing managers index for the Chinese steel sector was at 45.9 percent in April this year,, up 3.7 percentage points as compared to March as China took measures to stimulate resumption of production and construction activities, demand from downstream users improved, exerting a positive impact on steel production and inventory consumption. In April, the production index for the Chinese steel sector increased by 14.1 percentage points compared to the previous month to 53.4 percent. Meanwhile, in April the sub-index for new orders in the steel sector saw a rise of 1.4 percentage points month on month to 39.9 percent. The new export orders index indicated a slight increase of 0.5 percentage points month on month to 27.8 percent, but it has been lower than 30 percent for two consecutive months amid slack demand from overseas markets due to the ongoing negative impact from the coronavirus pandemic worldwide and high competition in the international market. In the given month, due to better demand from downstream users, the finished steel inventory index decreased to 38.8 percent, down 2.8 percentage points month on month. At the same time, the purchase price index of raw materials in the Chinese steel sector stood at 40.6 percent, indicating a drop of 0.1 percentage point month on month. Nevertheless, the steel industry PMI has not returned to the 50 mark, signaling that consumption is still not sufficiently high.

As for May, CSLC has forecast that demand for steel will continue to improve, though demand in southern China will likely slacken due to the coming rainy weather. Moreover, infrastructure will speed up, which will stimulate demand for rebar and wire rod, while demand for flat steel will not be as good as for long steel.

Source : Strategic Research Institute
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Tata Steel Helps Decarbonisation Plans for the UK

As a leading member of the South Wales Industrial Cluster, Tata Steel UK is helping shape regional efforts to decrease carbon emissions, aimed at creating the world’s first net-zero industrial cluster. The first phase of SWIC’s Roadmap and Deployment project has received a significant boost thanks to grant funding of GP 295,000 from UK Research and Innovation, a partnership of universities, research organisations, businesses, charities, and government, with more funding available for future stages. If successful the plan would see Tata Steel’s integrated steelworks at Port Talbot playing a major role as one of four possible anchor sites.

Phase one of the project will create a plan for a series of local zero-carbon areas to lower emissions, create skilled jobs and enhance well-being across South Wales. If SWIC projects proceed successfully, they will improve the UK’s ability to locally manufacture steel products with low carbon emissions, helping to drive the low-carbon future of UK construction and other sectors such as defence, car manufacturing, packaging and even coin production.
SWIC initiatives will also make a vital contribution to the economic resilience of the Welsh economy by bringing in new high-skilled jobs and ensuring operations are sustainable in the long term.

Key areas for SWIC in the first phase of the project include examining the infrastructure required for the development of the hydrogen economy, for large scale CO2 capture, utilisation and storage and transport.

Other partners in SWIC include Costain, CR Plus, RWE, Progressive Energy, University of South Wales, Celsa Manufacturing, Tarmac, Valero Energy, Progressive Energy, Capital Law, Flexible Process Consultants the Port of Milford Haven and Vale Europe.

Source : Strategic Research Institute
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Ruukki Construction Completed Divestment of Building Systems

Ruukki Construction has completed the divestment of its Building Systems business to Donges Group, which is fully owned by the German-based investment company Mutares. After the divestment Ruukki Construction will focus on profitable growth in its product businesses within Roofing and Building Envelopes businesses. The business now being divested had sales of around SEK 1.5 billion in 2019 with a slightly positive operating profit.

Building Systems employs some 500 persons, who will transfer to the service of the new owner under their existing terms and conditions of employment.

Source : Strategic Research Institute
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New Zealand Steels Pipe and Hollows Plant at Glenbrook to Close

New Zealand Steels Pipe and Hollows Plant has told workers that they are undertaking a restructure which could see the end of their jobs at the plant for most workers. The 60 workers affected would have to be redeployed elsewhere, or face having no job at all. A New Zealand Steel spokesperson confirmed that New Zealand Steel had started consultation on a proposal to close its steel pipe and hollows making operations at Glenbrook. The plant restarted work last week under alert level three restrictions in New Zealand

New Zealand Steels produces around 600,000 tonnes of steel annually of which 20,000 tonnes are pipe & hollow sections. The pipe plant process a wide range of hollow sections to local and international specifications. Typical applications include agricultural, architectural, general engineering, mechanical handling and structural uses. Typical uses are agricultural implement frames, trailers, pallets and stock crates, sign gantries, service bridges, railings, columns and trusses. These products are available black, pre-primed or galvanised.

Source : Strategic Research Institute
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Thai Steel Industry Association Seeks Government Support

Bangkok Post reported that seven groups under the Thai Steel Industry Association have filed a petition last week with Prime Minister Prayut Chan-o-cha for Covid-19 Situation Administration, calling on measures to mitigate the effects of the coronavirus outbreak on the domestic steel industry in Thailand. The association is asking the government to support the industry as a critical industry and supply chain.

As per report “Demand for steel products shrank significantly during the first quarter of this year. There is a high risk of Chinese steel products being dumped into Thailand, which was the third largest market for Chinese steel exports in 2019.”

Source : Bangkok Post
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