Interview with the Chairman of Foreign Investments Agency Mr. Pavel Ezekiev. - Mr. Ezekiev, how much are the investments in Bulgaria by the end of 2003? - By the end of September the investments in Bulgaria are USD 864,2 million. Including about USD 350 million from the sale of DSK Bank, this is equal to a little over USD 1,2 billion. The investments over USD 10 million are 75 per cent of the total amount. In the end of 2003 the investments would be calculated to USD 1,4-1,5 billion. This is absolute record for the State. - Is this amount much or just the opposite? - One of the ways to be revealed whether the investments are much is to be considered as per centage of GDP. If the investments are USD 1,4 billion and a growth in GDP 4.8 per cent – the same as in 2002, this means a little over 8 per cent from GDP. - Which are the biggest investments in 2003? - The biggest investment will be the purchase of DSK. The second is proved to be the investment of GloBul for the network’s increase, construction of base stations and other technologies for about USD 200 million. Then follows the investments of LUKoil and Umicore. LUKoil invests in the capacities of the refinery in Burgas and in new petrol stations. Umicore invested funds in a big modernization and enlargement of the plant in Pirdop. After them is Miroglio that doubled its investments in Bulgaria – between USD 40 and USD 50 million. Maritza-3 is another big investment. So far there have been realized about USD 50 million but further they will be a lot more. Shell opened many petrol stations, Metro – many hypermarkets. - What are your forecasts for this year? - I expect that the investments are a little more than 2003. Half of them will be from the big projects in energetics – from the privatization in the branch and from the sale of BTC. - Which country is investor number one now? - Greece because of GloBul. - A while ago was Switzerland. - Switzerland is disguised Russia. The investments from Switzerland are the investments of LUKoil through their Swiss unit. Greece with GloBul and Viohalco are one step forward.
Source: 24 chasa (05.01.2004)

The Bulgarian economy has absorbed foreign direct investment (FDI) worth USD 7 bln since 1991, shows data of the Foreign Investment Agency (FIA). The FDI total, which includes a preliminary USD 1.4 bln forecast for 2003, is a modest achievement compared to the influx of investment cash attracted by Bulgaria’s front-running East European counterparts. End-October 2003 data of the central bank showed that FDI had almost doubled to USD 1.272 bln, or 6.7 per cent of the GDP forecast, up from USD 767 mln a year earlier. Non-privatisation FDI totalled USD 610 mln at end-October. The 2003 top 10 of the biggest spenders among foreign corporations doing business in Bulgaria features OTE-owned GSM carrier GloBul, Greek industrial group Viohalco, Belgian-owned Umicore Med, LUKoil Bulgaria, Shell and Germany’s Metro Cash&Carry. Preliminary FIA data shows that the top 10 corporate investors accounted for 65 per cent of overall FDI. The 311.1 mln euro buy of Bulgaria’s last state-owned bank DSK by OTP Bank lifted Hungary to the top of the nationality rankings of 2003 investments. Greece was no.2 with USD 203 mln, followed by Switzerland and the Netherlands
Source: Dnevnik (05.01.2004)

This year, the domestic electricity market will be opened for bigger consumers with annual consumption of over 100 mln kWh and for such consuming over 40 mln kWh, NEC announced. This will allow the companies, considered privileged consumers to negotiate their electricity supplies directly with the central producers at the free zones. So far, this right has been given by the State Energy Regulation Commission only to the ten biggest Bulgarian enterprises – Mines Maritza Iztok, Stomana Industry, KCM – Plovdiv, Asarel-Medet, Elatsite Med, Umicore Med, Devnya Cement, LUKoil-Neftochim, Agropolichim and Neochim. The electricity market was due to be opened for them as early as 2003, and in 2004 it had to be opened for companies consuming over 40 mln kWh annually. In 2003, the liberalization with around 18 per cent was not implemented due to the delayed adoption of the new Energy Law. The decree under it, regulating the new market relationships, is due to enter into force in February, after which the two steps of the liberalization will be merged, experts explained. Big clients’ electricity expenses are expected to drop with around 8 per cent, which will create additional stimuli for economic growth, Minister of Energy and Energy Resource Milko Kovachev stated. During the first step of the opening of the market, no amounts for direct sale will be released from NPP Kozloduy. Another company, which remains out of the list of centrals, is TPS Maritza Iztok 3, which has a long-term contract with NEC. All the other producers may take part in the free market. The condensation stations will have a partially liberalized quota, which will be sufficient to cover over 150 per cent of the expected maximum consumption of the privileged consumers. The heating, plant and private water power stations will have the right to sell the electricity they produce directly. NEC will be an operator of the transportation system and will guarantee the balance between production and consumption. Since May 2003, NEC, the consumers and the stations are trying different market situations in the form of virtual simulation. The drills will not stop until the decree is adopted. The plans of the participants in the drills are to turn these virtual drills into actual work. The price of the electricity under the direct contracts will not be regulated by the State Energy Regulation Commission. No fees for available capacity will be paid for the free segment.
Source: Pari (05.01.2004)

In the last minute of last year Bosnia’s Mostar-based plant Aluminij received the support of the international community to continue its work. The enterprise is the only aluminum producer in the country, but the state-owned electric company Elektroprivreda stated it could no longer give it energy on credit. The electric company recently agreed to sell in 2004 1.0 million mWh to the Swiss-based branch of the London company Energy Financing Team (EFT). Aluminij has aluminum supply contracts with the German DaimlerChrysler AG, which used to provide the plant with power electricity on barter through its subsidiary Debis International Trading.
Source: Pari (05.01.2004)

The first working day at LME on January 2, 2004 ended with new records at the non-ferrous metals, which kept the increasing trend from the last week of 2003. The trade indeed was in small volumes but indicative for the stock exchange act. Copper became more expensive with 3.1 per cent up to 2349 USD/t from 2278 USD/t at the closing on the last day of 2003. The price of aluminum also rose with USD 22 up to 1618 USD/t. The quotes of nickel increased from 16 590 USD/t on last day of 2003 to 6 830 USD/t and the entire day showed intentions to jump the level of 17 000 USD/t.
Source: Pari (05.01.2004)

Brazil has the highest priority for investments in the steel industry, considering its experience and access to raw materials, Mr. Joseph Kinsch – President of the French steel company Arcelor stated. Last month Arcelor established cooperation with China through Boasteel Corp. and with the Japanese giant Nippon Steel.
Source: Pari (05.01.2004)

The market of tin in Malaysia has continued its fast development since 2003 and became more expensive with 56 per cent up to 2365 USD/t. In 2004 the demand of tin will exceed the supply 16 000 tons, according to experts. The stockpiles of tin at LME reduced to 14 495 t in the end of 2003 from 39 475 t in August, 2002.
Source: Pari (05.01.2004)

The manufacture of zinc in the Lead-zinc complex in Kurzhali (OZK) will be increased with 25 per cent, was reported from the company. The reason is the higher demand and the jump of the non-ferrous metals’ prices on the world markets. This year is expected to be extracted 27 000 tons. There will also be a growth in the lead extraction. By 2005 OZK has to modernize completely its production capacities in accordance with the euro standards. According to a scheme, the reconstruction will finish in September, this year.
Source: Standart (06.01.2004)

The electricity in Radomir – Metali will be stopped because of the company’s debts, NEC announced. NEC insists the company to pay its BGN 500 000 debts, while according to invoices the current receipts amount to BGN 1 969 000, Mr. Plamen Paskalev – Director of the Radomir-based company, said. The accumulated former debts are in the amount of BGN 8.5 million.
Source: Standart (06.01.2004)

About USD 7 billion are the foreign investments in Bulgaria for the last 12 years, announced the Director of Foreign Investments Agency Mr. Pavel Ezekiev. Only for 2003 is expected the amount of the foreign investments to reach USD 1,4 billion. Almost 1/3 of them is on green. By the end of October the amount is USD 1,272 billion, which is 6.7 per cent of GDP of Bulgaria. The biggest investors are the second mobile operator GloBul, the Greek group Viohalco that made investments in the plants Stomana industry and Steelmet, Umicore for the copper-extraction plant in Pirdop and LUKoil Bulgaria for the construction of petrol stations. The ten biggest investors realize 65 per cent of the total investments in the State. Because of the purchase of DSK Bank by OTP, Hungary is at the first place in the list of the foreign investors for 2003. Its investment is over EUR 311 million. Greece is second with USD 203 million. Switzerland is third and Netherlands – fourth.
Source: Standart (06.01.2004)

Mr. Borivoe Stoyadinovich, Director of the Mining and Smelting Group Basen Bor (RTB Bor) stated that the year 2004 is a key year for the enterprise’s development, which is planning to increase its production output. In 2003 the state conglomerate Bor produced 14 000t of copper concentrate – 12.5 per cent less than initially planned, due to the aged facilities and insufficient funds. The enterprise is a group of 18 companies, which operated all through the former Presidents Slobodan Milosevic period of ruling. Through them, the Government used to sell copper and gold in order to ensure the country’s social peace. A number of ore giants have demonstrated interest in the group, including Australia’s Rio Tinto and Billliton and Canada’s Phelps Dodge. In December, RTB Bor’s cable factory based in Zaichar was sold to Cyprus-based East Point. The tenders for two other plants owned by the group have been fixed for January 2004. The company is currently leading negotiations with a Greek partner, interested in investing in the Bor-based cable and wires producer. According to plan, the heavily indebted enterprise should find another USD 35 million for new equipment in the shortest term possible, USD5-6 million of which should be provided by the end of 2004.
Source: Pari (07.01.2004)

Montenegro’s only aluminum plant – Kombinat aluminijuma Podgorica (KAP), is planning to keep its 2004 aluminum production output at 120 000t and to continue cutting production costs. In September, EBRD granted a EUR 3 million (USD 3.75 million) credit to the enterprise, which the plant was supposed to use to pay to its investment counselors BNP Paribas. The loan, however, has not been ratified by the Federation Serbia – Montenegro as yet. The factory was built 32 years ago using technological equipment by the French Pechiney. In 2002, it produced 116 000t of aluminum –more than its installed capacity of 102 000t. In 2003, the plant’s export reached USD 154 million.
Source: Pari (07.01.2004)

In the beginning of the trade on LME the quotes of the non-ferrous metals continued their increasing trend after active purchase from investment funds. In the afternoon the copper on the three-month deals added 1.5 USD up to 1378.5 USD/t after the jump in the out of stock exchange trade on Monday in the evening. Zinc added other USD 6 and reached 1053 USD/t. In the early afternoon aluminum reached 1620 USD/t after the closing in the former evening at 1613 USD/t. Nickel was particularly active and again added to its quotes USD 290 and was traded at 17 390 USD/t – near the high levels, reached for a last time in March, 1989. Lead became more expensive with USD 7 and reached 746 USD/t. Tin moved upwards with USD 20 up to 6560 USD/t.
Source: Pari (07.01.2004)

US Defense National Stockpile Center (DNSC) sold 7000t ferrochrome reserve, 6000t of which have a high carbon content and 1000t – low carbon content, to 4 local companies for around USD 4.5 million. 20t of zinc were also sold for around USD 18 000. The Center sold 3580 t of lead to the total value of almost USD 2.7 million as well.
Source: Pari (07.01.2004)

600 000 libras cobalt for totally USD 10 million were sold to 3 different companies from USA and one from Switzerland. In the beginning of every year the Ministry of Defence of USA renewed its obligatory metal reserves.
Source: Pari (07.01.2004)

Shumen-based aluminum profiles manufacturer Alcomet has signed an agreement with UK-based VAI for reconstruction of two aluminum rolling mills. VAI is a subsidiary of Austria's Voestalpine Industrieanlagenbau, part of the VA Technologies Group. Alcomet and VAI have signed a $9 mln contract for the reconstruction of 2 rolling mills as part of the Shumen-based company's 2003 investment program. Alcomet invested a total of $10.5 in the Bulgarian economy last year.
Source: Dnevnik (08.01.2004)

Canada’s only palladium producer North American Palladium announced that over 2003 fourth quarter it managed to almost double its production output due to mild weather and higher production achievements. The company, based in Toronto, revealed that over the review period it had produced 94 114 tr.ounce of palladium compared to 52 067 tr.ounce in the same period of 2002 and 76 729 tr.ounce in the third quarter of last year. Lately, platinum is used not only in jewelry, but also in catalysts of burnt automobile gas. For the whole year 2003, North American Palladium produced 288 703 tr.ounce of palladium, as well as 23 536 tr.ounce of gold, 4 mln pounds of nickel and 7.1 mln pounds of copper as side products from its mine based in the region of Laque des’Ille in North Ontario. Even before publishing its financial results, the company indicated that in 2004 it expected better financial results, since the daily ore processing amount would be raised to 15 000t. the company has a joint research venture with another Canadian company – Inco Ltd.. Both companies are implementing mutual projects for research of non-ferrous and precious metals chiefly in North America. Although in 2003, the prices of the rest of the main precious metals went up because of their deficiency, expected accelerated economic growth and weak USD, palladium prices went down with some 15 per cent, since its offering stayed much higher than demand.
Source: Pari (08.01.2004)

The prices of non-ferrous metals went slightly down in the early afternoon trade at LME on Wednesday, reaching new, higher levels. Quarter copper deals were a little down to 2331 USD/t compared to 2342 USD/t at the closing of the trade the previous day. Aluminum remained flat at 1607 USD/t. Zinc’s price were down with USD 6 to 1021 USD/t. Lead lost USD 8 and was traded at 720 USD/t. Nickel kept its leading position, adding another USD 150 to its price, which reached 15 305 USD/t. Tin was up USD 10 to 6250 USD/t.
Source: Pari (08.01.2004)

China’s largest copper producer Jiangxi Copper Co. Ltd. terminated copper production in the middle of December and is planning to restore it after January 20. All through December, practically no refined copper sales were made. Jingxi Copper, based in Guixi, South East China, has only one melting furnace, which is stopped for maintenance each 18 months and has an annual production capacity of 400 000t of refined copper. The production is expected to be put back into operation immediately after the Chinese New Year. In 2004, the company is planning to increase refined copper extraction amounts to 400 000t, while in 2003 production output was raised with almost 48 per cent to 342 000t.
Source: Pari (08.01.2004)

Competition Commission of Southern Africa rejected the accusation against the biggest producer of steel in the country Iscor Ltd that uses its dominating position for settling unreasonably high prices of its articles. Iscor is selling in the country about 60 per cent of its annual production of 6.04 million tons steel articles.
Source: Pari (08.01.2004)

The credit rating of the steel producers in 2004 seems stable, was reported from the rating company Moody's. However it underlined that the considerable extra capacity of the steel industry in the world will depend quite much on the reviving demand of steel rods and round iron for the construction and also on the development of the automobile industry over this year.
Source: Pari (08.01.2004)

The Government terminated two concession deals with Kremikovtsi JSC. The first one was contracted in May 1999 for extraction of iron and barite ore from the Kremikovtsi deposit, and the second one – in June 1999 for extraction of lime from the Kozyak deposit, Sofia region. The contracts were terminted over the metallurgical plant's failure to fulfil its contractual obligations. Kremikovtsi JSC’s unpaid royalties to the state from concession fees as of June 30 2003 under the first contract total to USD 351 511, and under the second contract – USD 32 400. The Council of Ministers authorized the Deputy Prime Minister and Minister of Economy Ms. Lidia Shuleva to undertake the necessary measures to collect the royalties. The concession contract for the beach Arapya, contracted with SP Strand – Anton Andreev, Sofia, has also been terminated unilaterally by the Government because the concession rights were transferred to a third party.
Source: Pari (09.01.2004)

Ms. Maria Markova is the new member of the Board of Directors of Alkomet JSC, Shumen. She will replace Mr. Ivan Ivanov, who was written off from the management of the company. Alkomet JSC will be represented by the Executive Directors Mr. Hristo Dechev and Mr. Husein Joryudjyu and the Procurator Mr. Fikret Indje.
Source: Pari (09.01.2004)

The new freight charges mulled by national railway operator BDZ will deter exports and will prompt large industrial enterprises to shift to road transport. The hiked tariffs will also result in a drop in cargo turnover at the Varna and Bourgas ports, key BDZ clients told Dnevnik, suggesting they could be forced to close up shop if the carrier is not amenable to lower charges. BDZ said at the beginning of the year it will up freight charges by an average of 6-8%, citing higher operating costs and the lack of cash to renew its carriage fleet. The national operator urgently needs 40 mln levs to replace 3,620 outmoded carriages. Freight charges will be raised by an average of 10% for major corporate clients, a price hike which will affect the Kremikovtsi metal works, chemical firm Neochim, Pernik-based Stomana Industries and Sviloza. Cargo shipments generate 2/3 of BDZ's overall income. Domestic railway cargo haulage accounts for only 16-17% of overall freight traffic. According to BDZ data, 70% of local exports are shipped via road transport. BDZ-handled freight traffic increased by 10% in 2003 to 20 mln tons. Bulgaria restructured the cash-draining BDZ in 2002, splitting it into two separate companies - one managing the railway infrastructure and another providing railway haulage, in a bid to streamline costs and honour commitments to multilateral lenders.
Source: Dnevnik (09.01.2004)

The Deputy Prime Minister Ms. Lidia Shuleva announced Kremikovtzi Rudodobiv JSC’s ore extraction concession has not been taken away as yet. Talks will be held with the company’s managers to sink its debts from concession fees, amount to USD 351 511 as of June 30 2003. Currently, the groove employs 740 people.
Source: Trud (10.01.2004)

Two days ago, Kremikovtzi conserved Second Furnace ahead of schedule, the combine announced. According to the strategy, this was supposed to happen later, but due to the problems with the raw material transportation with BDZ the change had to be made. After the conservation of one furnace, the daily cast iron production output will reach 3600t. By the middle of the year, the combine is expected to produce 194 000t less metal. Despite the earlier-than-planned closing of Second Furnace, the company’s development strategy will not be changed. During the first half of the year, the complex for continuing steel spilling is expected to be put into operation. The complex has been developed jointly with the Austrian company Fyost Alpine.
Source: Dnevnik (10.01.2004)

The interest of the investment funds in the non-ferrous metals on LME moved the prices upward to new maximums during the last week although there were not any buyers at the market. The copper with three-month delivery has reached on Tuesday its highest quote since July 1997 at USD 2389 per ton, aluminum registered two-year maximum at USD 1624 per ton and nickel climbed up to levels, unseen since March 1989 – at USD 17 650 per ton. Lead and tin became more expensive respectively to 752 USD/t and 6615 USD/t, their highest quotes since 1996 and the zinc registered a two-year maximum at 1054 USD/t. However, on the same day, the funds decided to cash down the accumulated to the moment profits and liquidated positions, declining the quotes. By the end of the week the market was consolidating. London traders commented that the lull is only a preparation for the attack of new peaks. Their forecast was confirmed by the lull, with which the market of copper saluted the intention of Chili-based to sell its stockpiles of about 200 000 tons since the world stockpiles are now under 800 000 tons.
Source: Capital (10.01.2004)

Three people died and at least 13 were poisoned and harmed after a gas flowing from a furnace in the metallurgic plant Kremikovtzi. The break-down happened yesterday afternoon while the workers were eliminating a break-down in a pipe line. During the repair a coke gas with high contents of carbon dioxide flowed. The break-down did not caused any explosion and fire.
Source: 24 chasa (11.01.2004)

A second breakdown occurred in Kremikovtzi in less than twenty four hours. At 14:00 o’clock on Sunday, a fire burst in the local TPS, located in the central part of the enterprise. 2 fire vehicles and an ambulance were sent to the spot immediately, and the fire was stopped in a few minutes. There are no injured. The plant’s Managing Board announced it would give BGN 5000 to each of the families of the three workers, who died during the breakdown on Saturday. A special commission will be investigating the reasons for the breakdown.
Source: Standart (12.01.2004)

The name of Kremikovtzi was connected with a series of scandals after the privatization of the company in 2000. During August 2002 Customs Agency introduced distraint on the import and export of the company, which had huge debts to the State and suppliers, accumulated since 1999. Then the Executive Director of the plant Mr. Valentine Zahariev admitted that the total debts were BGN 630 million. Later the distraint on the company’s export was canceled and the Government promised to take a part of the not declared in the privatization contract debts of the plant in amount of BGN 200 million. According to the owners, however, the hidden debts were in amount of BGN 300 million. The metallurgic giant permanently owes funds to Bulgarian State Railways (BDZ). In December 2003 Sofia Regional Court ordered that Kremikovtzi owed to BDZ BGN 3.9 million, accumulated since the beginning of September and secured with 12 promissory notes. In November, last year the Government ceased the contract with the metallurgic plant Kremikovtzi JSC for concession for extraction of mineral resources in Delian field because of unpaid debts to the treasury. The contract was concluded in June, 1999. As of the middle of the year the sum that Kremikovtzi owes on it, amounts to USD 13 660. The interests are BGN 1251. The next scandal with Kremikovtzi emerged last week when it became clear that the Minister of Economy Ms. Lidia Shuleva would send a written warning to Kremikovtzi when will be terminated the concession contracts for mineral resources from Kremikovtzi and Koziak fields. On Thursday the Government authorized the Minister of Economy to terminate the two concession contracts, concluded on June 28, 1999. From 2001 to the middle of 2003 Kremikovtzi JSC did not execute main duties on the contracts and on the concession remunerations for the extraction as well. Several times were sent invitations to the company for voluntary payment of the debts and defaults.
Source: Monitor (12.01.2004)

A day after a gas explosion killed 3 workers and injured another 18 on site of Sofia-based metallurgical plant Kremikovtsi, it transpired that the metals firm and the National Electricity Transmission Company (NETC) had signed last week a deal rescheduling the payment of 70 mln levs in overdue power bills over a 10-year period. The debt was accumulated after 2001 and accounts for 31% of NETC's overall receivables. The energy ministry, which okayed the deferral, refused to comment. Under the repayment contract, Kremikovtsi is obliged to settle its debt with equal monthly instalments. The metallurgical company consumes over 100 gWh of electricity annually. After taking over the company in 1999, current Kremikovtsi owner Finmetal Holding hired Deloitte&Touche to audit the metallurgical company. The check revealed some 80 mln levs of off-the-books debts ran up towards the National Social Security Institute, the tax and customs authorities. A working group from the economy ministry recommended in 2003 to write off 77 mln levs of these hidden liabilities but its proposal was never reviewed by the government . A total of 47 mln levs in debts towards NETC and 83 mln levs of outstanding payments to state-owned gas utility Bulgargaz were forgiven prior to Kremikovtsi's privatisation. In 2003, Kremikovtsi clinched a 10-year repayment deal with Bulgargaz similar to its current agreement with NETC. Kremikovtsi also owes 4 mln levs to railway carrier BDZ and 4.5 mln levs in pollution charges to the environment ministry. Despite the red ink, the metals firm reported a January-September 2003 profit of 53.7 mln levs and sales of 552 mln levs but both figures were flattered by an FX trading profit. Total liabilities stand at over 1 bln levs, including a 340 mln levs in debts towards connected companies and 310 mln levs in unpaid bills to suppliers. Experts attribute the income upside to the fall launch of a blast furnace. A new line for continuous casting, commissioned by Kremikovtsi to Austria's VA Industrieanlagenbau GmbH&Co, missed its late-2003 launch target. Kremikovtsi is still involved in long-running talks with Marcegaglia for the acquisition by the Italian steel group of some of Finmetal's equity.
Source: Dnevnik (12.01.2004)

In the first week of 2004, precious metals demonstrated price records at New York Futures Exchange (COMEX) on the background of weakening USD positions. During the weekend, instant delivery silver quotes reached their 6-year maximum of USD 6.40 at LME and New York Friday trade. March futures went up to 6.52 USD/tr.ounce – the highest US quote since April 1998. At the closing of trade, prices went down to 6.479 USD/tr.ounce. Since the beginning of 2004, silver prices have increased with 8.4 per cent, and the February 15-year peak added another USD 2.40 to 426.80 USD/tr.ounce. Gold futures jumped to a 15-year record of 431.50 USD/tr.ounce. According to dealers, the further USD collapse can soon lead to strategic levels higher than USD 450.00.
Source: Pari (12.01.2004)

The non-ferrous metals closed the trade on Friday at LME with a slight prices’ rising at weak trade in expectation of the new market trends in USA. The copper on the three-month deals closed at 2417 USD/t in comparison with 2404 USD/t in the end of the trade on Thursday. Nickel remained without a change at 16 100 USD/t. Aluminum added USD 1 up to 1620 USD/t. There was not trade with tin but its quotes rose with USD 10 up to 6560/70 USD/t. Lead was stable without a change at 740 USD/t. Zinc became cheaper with USD 8 to 1041 USD/t.
Source: Pari (12.01.2004)

On Friday, the prices of cobalt with high purity level in Europe reached a new record level of 29.50 USD/lb and the trend continues to be upward, considering the market’s big demand. According to market specialists, this is only the first stage of the process, since producers from Australia-based WMC raised their March “offer” price with USD 8 to 32.00 USD/lb on the very same day. The metal was last traded at 30 USD/lb in March 1996, and a record maximum of 45.00 USD/lb was marked in 1978. In 2004, market cobalt deficiency is expected, following an almost balanced production and trade of 40/41 last year, but a 50 000t demand in 2005.
Source: Pari (12.01.2004)

Citigroup group issues shares for EUR 30 million /USD 38.20 million/ against shares from the Belgium mine company Umicore with yield of 0.25 per cent per coupon annually and stock exchange price of EUR 67.76 EUR per share. It is expected by January 2007 the shares to reach 150 per cent over the face value. On Friday in Brussels the shares of Umicore were traded at EUR 55.40.
Source: Pari (12.01.2004)

A probe will be made into how Kremikovtzi’s buyer is implementing its obligation under the privatization contract, the prosecutor’s press center announced. This decision was made during a meeting dedicated to the breakdown in the plant, in which three workers died. The meeting was headed by Mr. Nikola Filchev personally. The plant was sold in 1999 to Darumetals, currently Finmetals for USD 1. A second probe will be made as well – whether the labour safety and security rules in the plant are observed. The meeting has also decided to entrust the investigation of the breakdown to National Security Service (NSS). The implementation term is 2 months. By the afternoon, the assignment decree had arrived in NSS, NSS announced. The investigation is for murder by incautiousness and has been initiated against unknown person on Sunday by Sofia’s Regional Prosecutor Mr. Slavcho Kurzhev. Investigators from NSS went to the spot of the breakdown immediately on Sunday. However, the service refused to reveal the conclusions they had made so far. We will start working immediately after we receive the prosecutor’s office statement, NSS’s Major Breakdowns Department Head Mr. Georgi Iliev said. After that, expertise will be appointed and we will decide which people will be questioned.
Source: Sega (13.01.2004)

The metallurgic plant Kremikovtzi JSC does not execute the set in the privatization contract investments, according to a verification of Post privatization control agency (PCA). The owners Daru metals that later renamed to Finmetals holding, engaged to invest per USD 50 million for the period 2000-2005. These funds were not invested in 2000 and 2001, according to the last data of PCA. Defaults were calculated. For 2000 the agency spent the banker’s guarantee of the plant of USD 5 million and for 2001 were not paid any defaults, announced Ms. Aksinia Slavcheva, Chairman of the agency. In the end of last year the Executive Director of the plant Mr. Valentine Zahariev declared that so far in the company had been invested USD 200 million. One of the biggest investments in the company is for BGN 110 million in renewal of First furnace and connected with it equipments. In fact, in this part of the plant took place the serious production accident in the end of the week, which took away the lives of three workers. The furnace started working in November 2002 at a huge ceremony in the presence of the Prime Minister Mr. Simeon Saxe-Cobourg. A new automated management system, delivered by Siemens and ABB was introduced. In the middle of this year the company also expects to launch the complex for permanent steel casting. The investment’s amount is EUR 35 million. A capital repair of third furnace is preparing as well and there will be invested other USD 20 million. Another big investment project will be developed within 2007. This is the installation of the super modern system COREX for preservation of the environment. It will replace the current production technology, based on furnaces. COREX’s installment will cost EUR 240 million and the company will search for financing from Bulgarian and foreign credit institutions. There will be searched for opportunities for selling the issues in accordance with the Report from Kioto. Many times the owners of the plant have indicated that their work is prevented from incorrect services of Bulgarian State Railways (BDZ) and not arranged financial problems with the State and state-owned companies. Until now the debts of the plant to BDZ have amounted to BGN 6 million. Sofia Regional Court admitted BGN 3.9 million debts of Kremikovtzi to BDZ. However, in order to take the sum back, the hauler is still waiting for executive lists. The debt was accumulated after the beginning of September 2003 when Kremikovtzi and BDZ agreed for new prices for transports and for payment of the old debts. Before that the debt of the plant was BGN 18 million but it was paid completely. And still exists the risk to be blocked the plant’s accounts because of the new debts of BGN 3.9 million. Kremikovtzi complains that BDZ does not execute the orders correctly. Besides, the Ministry of Transport and Communications refuses to give a license to Kremikovtzi for a private railroad hauler. Recently Mr. Zahariev accused the State of non-execution of the engagement on the privatization contract for compensation of the company’s hidden debts. According to the contract, the compensation for debts is by USD 55 million. Mr. Zahariev considers that the hidden debts are two times higher – BGN 200 million. The plant wants either writing off of the debts by USD 55 million or to acquire the state-owned share of 25 per cent in the company. Since PA and PCA don’t express opinion on the plant’s claim, Kremikovtzi is conducting a lawsuit.
Source: Pari (13.01.2004)

OTE of Greece is the biggest investor in Bulgaria over the past 11 years. Mr. Pavel Ezekiev – Director of the Foreign Investment Agency announced that the company has invested USD 530 million in the development of the country’s second mobile operator network – GloBul. The other companies included in the Top 5 are Belgium’s Solvey (USD 380 million investments in Sodi – Devnya) and Umicore (USD 300 million investments in the copper plant in Pirdop). The fourth and fifth positions are shared by LUKoil and American Standard with USD 150 million investments each, invested in the Burgas-based refinery Neftochim and Sevlievo-based Vidima Ideal.
Source: Standart (14.01.2004)

If the rates of the direct foreign investments are kept as during 2003, in two years time their amount may reach USD 2 billion, stated the Executive Director of Foreign Investments Agency (FIA) Mr. Pavel Ezekiev. Only for this year is expected the investments to reach USD 1.6 billion. Half of them must come from the privatization of BTC, Bulgartabac holding and the privatization of the energy sector. The rest will be investments on green. During last year Bulgaria for a first time is a leader, regarding the amount of the foreign investments as a per centage from the Gross Domestic Product (GDP), according to data of the national banks of Bulgaria, Romania, Serbia, Slovakia and Hungary. Bulgaria is at the first place with 8.3 per cent. The forecasts of FIA are that the foreign investments for last year will reach USD 1.4 billion. From them USD 500 million were invested on green by companies like Cosmo Bulgaria Mobile, the British Petreko with its project for the researches of the field near Varna and the Italian Miroglio with the construction of a plant near Sliven. About USD 500 million during last year were also invested by the big companies that privatized Bulgarian enterprises several years ago. Among the big investors are the Russian LUKoil, the Belgium Umicore, the Greek Viohalco. Greece remains at the first place by investments’ growth during the last 12 years. The second place is held by Germany before Italy, Belgium, Austria, Netherlands and Hungary.
Source: Dnevnik (14.01.2004)

There won’t be compromises for the safety in Kremikovtzi and even may be closed some of the productions, announced the Executive Director of Chief Labour Inspection (CLI) Mr. Totuj Mladenov. He met the management of the plant because of the break-down on Saturday when died three men and other 23 suffered of the gas. Mr. Mladenov ordered inspections in all 1200 risk enterprises in the metallurgic and chemical industry, among which is also LUKoil-Neftochim. CLI also started major inspection of First furnace in Kremikovtzi and as of the end of January – of the two coke batteries. The break-down is a reason for searching for any violations of Kremikovtzi. The Board of Management must say why this happened. The export of Bulgaria of metals is 18 per cent and is due mainly to the plant. 30 per cent of the BDZ’s haulages are of the plant. What will happen if the plant closes its productions? Many small and medium-sized are suppliers or subcontractors of orders and a huge number of these companies exist owing to the plant.
Source: Pari (15.01.2004)

The Central Bank of Chile forecasted success for the country’s economy, chiefly due to the higher prices of its main export product – copper. According to the bank, this would bring to the state additional profits of USD 100 million each time copper price is up with CTS 1 at its export. Most of the additional profits are expected to come from the USA – Chile’s main trade partner. Copper accounts for over 40 per cent of the country’s total export amount. The bank also forecasted the average annual export copper price in 2004 would reach 1.00 USD/lb compared to the previous forecasts of 83 CTS/lb. The reason for the new upward revised forecasts is increased copper demand in China, where economy is growing at high rates. On the other hand, USA – Chile’s biggest trade partner, reduced with 87 per cent the import duties for Chile’s goods as of January 1 this year. Chile has a similar trade agreement with the European Union. The higher copper prices will increase the trade surplus of Chile in 2004 with USD 4.6 billion.
Source: Pari (15.01.2004)

Russia announced it had suffered USD 80 million losses resulting from the import duties China imposed. Last year, Russia imported over 500 000 t of cold rolled steel from China.
Source: Pari (15.01.2004)

Non-ferrous metal prices at LME on Wednesday afternoon were down, except for copper and aluminum, which continued their upward trend. At flat trade, copper was traded at 2382/83 USD/t compared to 2372 USD/t at the closing on Tuesday. Aluminum added USD 4 to 1606 USD/t. Nickel was down with USD 175 to 14 125 USD/t. Zinc was also down with USD 3.50 to 1025.50 USD/t. Lead was traded at 726/27 USD/t – USD 4 less than on Tuesday.
Source: Pari (15.01.2004)

Initial aluminum production in Brazil grew in December with 5.1 per cent to 123 000 tons compared to 117 000t in the same month of 2002. From January to December last year, initial aluminum production in the country – the world’s sixth biggest aluminum producer, increased to 1.38 million tons – 4.7 per cent more than 1.32 million tons the previous year. In 2004, Brazil was planning to increase its aluminum production to 1.45 million tons. 5 aluminum producers are operating in Brazil, which have a total of 10 factories. The biggest increase in 2003 production was posted by CBA – 26.1 per cent, from 248.8 thousand tons to 313.8 thousand tons. What should be noted is that production grew in only some of the enterprises operated by the 5 companies, while generally speaking, big companies production output decreased. Thus, the giants Alcoa with 2 enterprises marked a production growth of 4.0. BHP Billition – another aluminum giant – marked a total production drop of 7.8 per cent, but in general all of them posted growth.
Source: Pari (15.01.2004)

For the time being, the results from the centralized public tender from the mass privatization, which has been ongoing since the beginning of this month, are weaker than generally expected. Before it, forecasts were related to one imported figure. A total of BGN 56 million had be to gained from the sale of all the shares of 432 companies, calculated on the basis of their minimum prices. During the tender yesterday, however, non-monetary funds for not over BGN 12-13 million (face value) were used. Nevertheless, 100 stakes were sold completely, and smaller stakes in a number of other enterprises were bought out. The difference between the sum of BGN 56 million and the funds actually used comes from a number of big companies, which concentrate a big part of the resource the state is trying to sell at the tender. All of them can be sold on this stage for at least BGN 1 million, but no one is willing to invest such a big amount in them. Furthermore, these companies are not public and their shares are not traded at the stock exchange, which makes their sale even harder than that of public companies. The leader in this respect is the machine building factory Radomir Metali JSC. This is the former plant Leko Co. (Founding and Forging Complex). The major stake from it was privatized in the middle of 1999. Back then, 75 per cent from the capital became ownership of the consortium between Pernik-based Eurometal and MEBO Radomir Leko Co. Invest. The amount of the deal was exactly BGN 9 million, and a big part of it was paid in compensatory instruments. The buyer had engaged to invest BGN 11.6 million in the plant. Calculated through investment bonds, a actually paid price for 25 per cent from the capital would be around BGN 2 million. According to data from the Post Privatization Control Agency, the owner did not make the investments he engaged to make only in the first year, but paid their forfeits due. The rest of the programs, including the employment program, are strictly implemented. Later on, however, the major stake in Radomir Metali was transferred to the Marshal Islands-registered company Radomir Principal. Actually, the plant is controlled by entities connected to the International Bank for Trade and Development. The chairman of the Board of Directors is Mr. Plamen Bonev, who has connections with the bank. During the current centralized tender, the state is selling its remaining stake of 25 per cent from the company’s capital of Radomir Metali. They are equal to 814 876 shares with a face value of BGN 1 each. The initial price at the tenders, held at the stock exchange, is BGN 14.15 per share. According to calculations, in order all shares to be sold, investors will have to use over BGN 11.5 million (in face value). This makes around 1/5 of the total minimum price during the whole wave from the mass privatization, which includes 432 companies and almost reaches the payment funds, used in the tender so far. So, the future buy-up of the state share in Radomir Metali (which is almost impossible), would double the amount of the used investment bonds, which are the most popular payment means. Radomir Metali is almost completely export-oriented company. 90 per cent of its sales for the first nine months of 2003 were exported. The company’s incomes for the same period amount to BGN 12.7 million, compared to BGN 15.5 million for the whole year 2002. The difference compared to 2001, however, is significant – back then, produce for only BGN 27.2 million was sold. The clients structure clearly reveals that the company’s sales depend on the USD rate. The current weak USD position is not very favorable for Radomir metali, just like it is not very favorable for most exporters. Over the past three years, the plant has been losing millions of BGN, where for the first nine months of 2003, the financial result is a loss of BGN 2.164 million. Nevertheless, the net value of the assets remains high – over BGN 46 million. Therefore, the minimum price of the bond tenders is comparatively high. Therefore, the purchase of minority stake from Radomir Metali is hardly justified. The company’s debts as of the end of December amounted to BGN 37.7 million, most of them being debts to suppliers and clients. It is hard for the creditors to obtain more information, since it is written in the prospect presented in PA that the names of companies, to which Radomir Metali has short-time liabilities, are a company secret. Around 800 people are employed in the plant, the average monthly wage being BGN 278. The company’s equipment was bought in 1985 and the capacity of the furnaces and technological lines of the steel producing facilities is 175 000 tons. Around 6 per cent of it is actually efficiently used. Besides steel production, the company also operates in the field of thermal and mechanical processing. It is located in Radomir’s industrial zone on an area of 1500 decares.
Source: Dnevnik (16.01.2004)

Kazakhstan’s only alumina producer refined 1.416 million tons of the raw material in 2003, which represents a 2.5 per cent production growth compared to 2002.
Source: Pari (16.01.2004)

Chief Labour Inspection (CLI) will submit the report for the break-down in Kremikovtzi JSC in the Prosecutor’s office and in the Ministry of Labour and Social Policy, announced the Executive Director of the inspection Mr. Totuj Mladenov. One week ago three men died and 22 were injured after flowing of a furnace gas. The inspection will check regularly the coke batteries and ammonia-sulfate division of the plant. According to Mr. Mladenov, some equipments may be stopped if they are not renewed. As far as back 2002 the Inspection had registered to be actualized the evaluation of the working conditions. It is expected to be ready by February 15, 2004, said the Director of CLI. At least two or three employees will be fired because of the accident, announced the Executive Director of Kremikovtzi Mr. Valentin Zahariev. The Managers of the team that changed the crane are responsible for the accident. Except the dismissals, there will be imposed other penalties in accordance with the Labour Code. On other hand, BDZ and Kremikovtzi will agree for payment of the plant’s debts in amount of BGN 6 million. At the moment a working group is reviewing the execution of the contract from August, 2003.
Source: Pari (19.01.2004)

After 17 o’clock in Kremikovtzi has only two normally working filtres in order to be saved electricity. But sometimes, even they are switched off and the plant remains without clearing filtres. One of the working filtres is in the ferrous alloy production and the other is in the agglomeration production. Totally the filtres in this production are 5 and 4 of them are switched off or do not work at all because they consume too much electricity. After 17 o’clock are also switched off the filtres of the steel-extraction production. In some of the productions, there are not any clearing filtres. The filtres, which clear the technical water don’t work quite well because are not clean. In order to be cleaned, the production must be stopped and this means a loss of funds. According to workers from the plant, the productions as a whole are quite neglected – the parts are not renewed, there are not any new equipments and the machines are too old. The cranes are not technically supervised and even if they are not suitable for work, they continue to be used. However, the Eexcutive Director of Kremikovtzi – JSC Mr. Valentin Zahariev rejected the claims. The workers complained of the working conditions and sometimes they even bought oil and antifreeze with their own funds.
Source: Monitor (19.01.2004)

Since the beginning of 2004, the slump of the USD rate has been among the major factors that also define the prices of the non-ferrous metals, traded in USD on LME in London. The good rumours during this week about the trade deficit of USA for quite a long time now, reduced USD against EUR and the market of non-ferrous metals calmed after the furious conquest of new heights in the end of the last and in the beginning of this year. In this way several months after the traders of precious metals and their colleagues from the sector of non-ferrous metals began to look like currency dealers. However, on the market are kept the positive airs to the high levels of the quotes.
Source: Capital (19.01.2004)

The investigation case against former Directors of Stomana ended with an opinion for court activities, was reported from District Investigation Office in Pernik. The former Director of the metallurgic company Mr. Valentin Bakalov and his inferiors Mr. Pencho Dimitrov and Mr. Boris Bradvarski are responsible for a criminal breach of trust and deliberate derelictness. According to Pernik-based Investigating office the three of them broke and did not execute their duties in order to obtain property benefit for other physical entities. In this way are caused damages on Stomana for BGN 3 544 924. If the formers Directors of Stomana are guilty, they will go to jail for 8 years. The crime was executed during the period July 2000 - May 2002. A signal for the violations was sent by the new Director of the company Mr. Spas Hristov. The investigation started after a financial revision of Stomana and finished for 9 months.
Source: Dnevnik (19.01.2004)

The huge virgin fields in Russia of non-ferrous and strategic metals are waiting for foreign investments in order to start their development after 2015 when the stockpiles are going to run out. According to Mr. Boris Mihailov, a Director of department in the Ministry of Natural Resources, at the moment the flow of capitals is evading Russia because the foreign companies do not consider the investments in the country as certain. According to data of the Ministry, Russia has the biggest in the world fields of zinc and the third by volume of lead, which are respectively 15.3 and 11.5 per cent of the world reserves. However, the country extracts now hardly 35 per cent of the zinc fields and about 60 per cent of the lead ones. The two biggest fields Holodensko and Ozerno in Southern Siberian Republic Buriatia, bordering with Mongolia, content over 46 per cent of the Russian zinc reserves and about 25 per cent of the lead, without ever being developed. Russia’s stockpiles of tin and cobalt /extracted as a separate product at the manufacture of nickel and copper / are at second place in the world. The country extracts tin only from 17 among the 217 open fields of the metal and gave licenses for extraction for 60 per cent of molybdenum’s fields.
Source: Pari (19.01.2004)

The major metals slightly retracted from the high quotes in the end of the trade on Friday. This was a result of the holidays in USA and Chinese New Year in Asia. The copper on 3-month deals reduced to 2378 USD/t but remained with USD 26 over the quotes at the closing on Thursday. Nickel became more expensive with USD 950 up to 4 750 USD/t, but cheaper in comparison with the beginning of the week. Aluminum became more expensive with USD 9 up to 1622 USD/t. The price of the zinc decreased with USD 1 to 1019 USD/t. Without any change remained the lead at 728/729 USD/t. Tin added USD 20 to 6340 USD/t.
Source: Pari (19.01.2004)

In 2003 Azerbaijan produced 18 612 tons aluminum when the sole processing plant in the country started working again after a long outage. The plant is a property of the state-owned company Azeraluminum. The company exports in 2003 17 854 tons white metal. The management of the company was taken by the Dutch Fondel Group after a tender that it won in 2002. Since June 2002 we have researched plans for higher processing capacity of the plant in Sumgait up to 59 000 tons per year in 2004 and up to 75 000 tons in 2006, said Mr. Sevinje Shukurova, a spokesman of Azeraluminum. In the middle of 2004 Fondel will start the construction of a new processing plant near the present plant, which will cost USD 250-300 million but will have annual capacity of 100 000 tons aluminum. The plant uses for the production the medial alumina, delivered from the refinery in Ganja but also property of Azeraluminum.
Source: Pari (19.01.2004)

The leading aluminum company Alcoa with a head-office in Pitsburg, USA was declared by Forbes Magazine for one of the 26 best managed companies in the world. Over 60 years, each quarter Alcoa has paid dividends to its shareholders.
Source: Pari (19.01.2004)

The company J&L Specialty Steel, LLC from Pitsburg, USA an entire property of Arcelor, based in Luxembourg and the biggest producer of steel in the world, increased as of January 26 the prices of all stainless steel articles with 6 per cent.
Source: Pari (19.01.2004)

Czech-based investment and financial company Re Group has officially stated its intention to take part in the privatization of the metallurgical plant Eliseina SP JSC. This was announced by the company’s Executive Director Mr. Slavcho Todorov. Re Group is ready to invest in the plant some USD 2.5 million in the first year after the privatization and the increase the number of job positions. Later, the amount of the investment will be doubled and a part of them will be used for the purchase of modern ecological equipment. According to Mr. Slavcho Todorov, this is the only company that has demonstrated solid interest in the former metallurgical giant.
Source: Dnevnik (20.01.2004)

The concept of the meetings with the real business is to develop the image of Bulgarian economy for the next 10 years, stated the Minister of Economy Ms. Lidia Shuleva before the discussion with representatives of 22 Bulgarian companies, among which Sopharma, Solvay Sodi, Prista oil, Zagorka, LUKoil, Vidima Ideal Standard, Viohalco, Sis industries and others. This is the first of the series of meetings that Ms. Shuleva organizes with the business spheres for promotion of the investments, was explained from the Ministry of Economy.
Source: Monitor (21.01.2004)

39 companies in Sofia that process and store poisonous substances will receive informing letters for the measures of safety, which must be observed. This was announced by the Director of Civil protection-Sofia Mr. Valeri Mladenov. Except Kremikovtzi, in the list are included Steelmet JSC, Akademika 2000 JSC, Danone JSC and others.
Source: Trud (21.01.2004)

The Deputy Prime Minister Ms. Lidia Shuleva and the Directors of the 20 biggest Bulgarian companies started to discuss the frame of a new Law for economic development. Among the presents were Ms. Sasha Bezuhanova, Director of íà HP-Bulgaria, Ms. Sasho Donchev, Director of Overgas, Mr. Anton Petrov – of Viohalco group, Mr. Ognian Donev – of Sofarma. Our idea is to have an honest conversation with the real business, in order to be revealed the image of the Bulgarian economy during the next years. This is the first from a series of meetings, which the Ministry of Economy will organize during the next months, Ms. Lidia Shuleva said. The next meetings will be with English language speaking investors and with Directors of small and medium-sized companies. After all conversations with the business’s representatives end, the team of the Ministry of Economy will be clear what are the real needs and obstacles for the business.
Source: Sega (21.01.2004)

In the end of last year BGN 35 million of the debt of Kremikovtzi to Bulgargas were rescheduled for 10 years. The plant is a big consumer and increased the consumption with 30 per cent and its closing will lay-off over 8000 people. The rest BGN 5 million were generated in the days of the New Year. This is one more gesture to the metallurgic plant from the side of state-owned companies after the remitted debts to the gas company, rescheduled debts to NEC and etc. In the end of last year the national gas monopolist had receivables of BGN 270 million.
Source: Sega (22.01.2004)

The manufacture of initial nickel in the western countries increased in November, 2003 up to 71 300 t from 71 000 tons in October, was reported from INSG/. The total world extraction of initial nickel in November rose up to 101 500 tons and since the beginning of the year has reached totally 1 078 500 tons. Only in Russia the nickel, produced in November was 21 100 tons, the same quantity as of October and from the former USSR European and Asian countries - 30 200 tons during November and the same quantity in October, 2003. However, it must be notified that since the beginning of 2003, the general consumption in the countries from Western Europe has declined to 395 300 tons in comparison with the same period of 2002. This is due to the slow progress in the European automobile production, according to the specialists from INSG.
Source: Pari (22.01.2004)

The non-ferrous metals became more expensive again on January 20 in the afternoon on LME in spite of the absence of China because of the Moon New Year. An expected deficit of copper concentrate in 2004 increased the copper’s quotes up to 2447 USD/t. Without trading, nickel remained at 14 790/14 800 USD/t from 15 050 USD in the end of the non-official trade on Tuesday. The price of aluminum lowered with USD 2 to 1624 USD/t with a trend to rise the level from 1600 to 1630 USD/t. Zinc retracted with 50 CTS to 1040 USD/t. Lead added USD 5 to 743 USD/t and tin added USD 40 up to USD 6440.
Source: Pari (22.01.2004)

The export of zinc from one of the biggest producers of the metal in the world – China reduced in January because of the lower export fees, introduced in the country. Except this, the Chinese exporters were affected by the reduction of the Total Income Tax return, paid on the deliveries outside the continent. The specialists expect the demand of the metal in the very China to increase in 2004 up to 2.1-2.2 million tons from about 2 million tons in 2003. At the same time the smaller deliveries of electricity forced some smaller Chinese producers to shrink the extractions with 20-30 per cent. Actually, the local companies intend to shrink the export, in order to respond to the higher demand by the local industry and to get use of the higher domestic prices. In 2003 the export of refined zinc from China reduced with 4.6 per cent in comparison with the former year and according to data of the Chinese customs, reached scarcely 451 028 tons. The premiums on the zinc’s deliveries in China were in the end of 2003 with USD 40-45 higher than these on LME.
Source: Pari (22.01.2004)

Japanese buyers of copper concentrate from Grasberg mine in Indonesia turned to alternative suppliers after the break-down in the end of 2003. Japan will increase the purchases from Chili since Grasberg will reduce the sales to 1.00 billion libras from 1.4 billion lb.
Source: Pari (22.01.2004)

The Belgium company Umicore announced on Wednesday on Brussels stock exchange Euronext the issue of shares at total amount of EUR 150 million with initial selling price of 101.83 per cent of each share. The shares with a face value of EUR 1000, 10 000 and 100 000 were completely bought by 6 syndicated banks at the ahead with Fortis Bank.
Source: Pari (22.01.2004)

The Ministry of Economy in cooperation with the Ministry of Environment and Waters, Ministry of Finance and Privatization Agency took part in the preliminary activities regarding the conclusion of EPSAL loan. The Programmes for the past pollutions by the privatization and Executive agreements with Decision N 116 of the Council of Ministers as of March 13, 2000 of Kremikovtzi JSC, LUKoil-Neftochim JSC and Asarel medet JSC have already been confirmed. The Council, appointed by the Ministry of Environment and Waters, approves at every stage the Programmes for liquidation of ecological damages from past activities or inactions until the moment of privatization, including preparation, design, assignment of the construction and evaluation of the results. Companies, executing programmes for liquidation of old ecological damages: Agropolichim JSC-Devnia, Geosol JSC - Provadia, Pirel JSC-Gotze Delchev, Neochim JSC- Dimitrovgrad, Biovet JSC - Peshtera, KZM JSC-Plovdiv, Osogovo JSC - Kujstendil, OZK JSC- Kurjali. In order to be provided a complex preventive control for reduction of the general pollution of the Environment from industrial sources in accordance with the European norms, in the Ministry of Environment and Waters are adopted the Programmes for realization the activity in accordance with the ecological legislation of the following pilot companies: UMICORE JSC-Pirdop, KZM JSC-Plovdiv, OZK JSC-Kurjali, Chimko JSC-Vratza, Sviloza JSC-Svishtov.
Source: Pari (22.01.2004)

Steelmet JSC opened its newest distribution center on the territory of Burgas region. Leading construction and investment companies from the region, as well as renowned architects were present at the event. In the end of the presentation, a multimedia CD about the largest Bulgarian aluminum architectural systems producer, a part of the Greek holding Viohalco, was demonstrated. Steelmet JSC was established in 1994. The company operates in the field of non-ferrous metal trade. Its produce is certified under ISO 9001 and ISO 9002. The company is exporting mainly to Western and Eastern Europe, the Balkan region and the Near East. The plant owns the only in Bulgaria line for electrostatic powder coating, built in accordance with the Qualitat standards. Steelmet JSC is also representative of the Italian aluminum joinery producers Lavaal, Producta and Communello for Bulgaria. Steelmet JSC is the gold metal winner from Plovdiv Technical Fair Autumn 99 for its terminated termobridge system E 6500 and is the only producer, holder of acrhitectural systems quality certificate, issued by the National Research Construction Institute.
Source: Pari (23.01.2004)

50 MPs from all Parliament groups submitted an offering for creation of inquiry commission for review of the privatization contract of Kremikovtzi JSC. The metallurgic plant was sold in 1999 for BGN 1 and at the moment its debts to the budget, suppliers and workers amount to BGN 1 billion. Meanwhile the Director of the metallurgic plant Mr. Valentin Zahariev stated that the Management permanently was taking measure for improvement the labour conditions but this is quite difficult because of the company’s big debts. According to him, the State draws back of Kremikovtzi and forgot its promises. There has still been a social but not real market economy, explained Mr. Zahariev.
Source: Monitor (26.01.2004)

The plant for aluminum profiles Steelmet JSC will concentrate its efforts to the construction of tourist objects. The company realized a turnover of BGN 70 million and reached a growth of 27 per cent in the export and 24 per cent in the sales at the domestic market in 2003 in comparison with the former year. At the moment the company is negotiating for a delivery of aluminum profiles with the investors of 56 hotels at the Black seaside, from which 22 in the region of St. Vlas to Ravda. The boom in the hotels’ construction during the last years focused the attention of the producer of copper and aluminum articles on the Black seaside. The total annual capacity of Steelmet is 10 000 tons. Since the annual consumption of Bulgaria is approximately in this volume, about 50 per cent of the plant’s production are exported to different European countries. During last year in the State were sold 1900 tons aluminum profiles, produced in Steelmet at the amount of BGN 10 million. The monthly production of this commodity is 850 tons, from them 350 tons are exported to Germany. Steelmet has already had distributors’ warehouses in Varna and Plovdiv and a warehouse base in Blagoevgrad. By the end of January a similar centre of the company will be opened in Stara Zagora and by the end of the year in Montana, Pleven, Veliko Turnovo and Russe. Only for the construction of one of the major centres - in Varna, the company invested BGN 1.5 million in 2003. Several days ago was opened a distributor centre of the company in Burgas, which has to realize up to 10 per cent of Sofia-based plant’s production at the domestic market. Steelmet is permanently expanding its group of products. The biggest and the most modern work-shop for electrostatic dust dyeing with monthly capacity of 140 tons is now working and after the consecutive investment of Etem here will also start a manufacture of copper foil, used in the computer industry. For convenience of the clients in the company is functioning a designer bureau, which allows the making of articles by order. Our clients are able to pay on rescheduled scheme within 30 days and for the execution of bigger projects we also approve credit limits on leasing within two years, specified Mr. Hristo Shterev. We expect the investors’ activity in 2004 to be much higher, said the Executive Director of Steelmet JSC and Regional Manager of Viohalco Mr. Anton Petrov. Steelmet JSC was created in 1994 as a trade company and in 1999 the Greek Viohalco group built a plant as investment on green for BGN 15.5 million.
Source: Dnevnik (26.01.2004)

The accounting profit of Bulgargas for 2003 is BGN 124 MN, the company's preliminary calculations show. About BGN 370 MN has been remitted to the budget in direct and indirect taxes and transiting fees, which places the company among the major contibutors to the Treasury. The state-run gas monopolist may also increase its proceeds by providing telecommunications services for commercial purposes. It has about 650 km of fibre optic trunk-lines, towards which telecom operators show huge interest. Gas consumption exceeded 2.9 BN cu m last year, 6% up from 2002. The energy sector remains the biggest client with 39% (1.1BN cu m) of the total conusmption. Next comes the chemical industry with 29.7% (865MN cu m), maintaining the 2002 level of consumption despite the decommissioning of the Vratsa-based Chimco. In metallurgy consumption was 418MN cu m, or 14.3% of the total. Bulgargas major customer from this sector is the Krememikovtsi iron ans steel works, whose consumption rose 30% from 2002. Consumption declined in the cement industry (due to the use of coal as fuel) and in glass-making (after the enterprise in Razgrad stopped operation). Bulgargas has managed to supply the agreed quantities of gas to all its clients and has no liabilities. The company closed 330 contracts within that period and natural gas was being delivered to 270 customers, the 27 gas distribution companies in the country among them. But things stand differently regarding Bulgargas receivables, totalling BGN270MN (BGN15MN down from 2002). Its biggest debtors are the domestic central heating utilities, whose liabilities amount to BGN136MN, down BGN3MN from 2002. The Sofia Central Heating Company is the biggest debtor, owing BGN112MN, followed by the untilities in Plovdiv (BGN10MN), Bourgas (BGN 5.5 MN), Pleven (BGN5MN) and Shoumen (BGN3MN). The biggest debtor among industrial enterprises is Kremikovtsi, whose liabilities total BGN40MN. Bulgargas has rescheduled repayment of BGN35MN for 10 years but nevertheless there are problems regarding the current payments, the gas company's Executive Director Kiril Gegov explained. A total of 13.5BN cu m of natural gas were transited to the Balkan countries in 2002. The greatest increase of delivered quantity - by 15% - was to Greece, while gas supply to Turkey dropped by 1.7 per cent.
Source: Banker (26.01.2004)

Until now the old and new debts of Kremikovtzi JSC are about BGN 1 billion, announced the Executive Director of Kremikovtzi JSC Mr. Valentin Zahariev at the meeting with the syndicates from the Trade Union KNSB and Podkrepa.
Source: Pari (26.01.2004)

Bulgarian State Railways (BDZ) is discussing the possibility of establishing a joint venture with the Spanish company Talgo. The venture will maintain the high-speed trains, offered to BDZ by Talgo. The exact number of the offers for supply of the two trains will be revealed today. 7 companies, including Siemens, Canadian-Swiss Bombardie, producers from Hungary, Czech Republic, South Korea and Japan, are going to submit offers.
Source: Pari (26.01.2004)

The nervousness, caused by the inventories’ level of nickel and copper and the low USD amounts compared to the EUR, were the supportive factors for the high prices of the non-ferrous metals over the last week too. Copper’s prices have registered on January 20 the highest amount since 1997. Experts commented that the problem with the inventories of copper can be overwhelmed during the nest 3-6 months if some producers launch in exploitation their stopped capacities. According to INSG, the world production of nickel in November 2002 – November 2003 was 1.108 million tons and the world consumption - 1.112 million tons.
Source: Capital (26.01.2004)

The total inventories from all kinds of aluminum of the processors in the western countries increased up to 2.970 million tons by the end of December, 2003. They will be more than the additionally specified inventories in November - 2.934 million tons and also than the inventories of 2.934 million tons in December, 2002. According to preliminary data of IAI, the inventories of non-processed aluminum have increased up to 1.627 million tons in comparison with the expected in November 1.546 million tons and with 1.660 million tons in December, 2002. The biggest aluminum inventories in December, last year are of 1.437 million tons in Europe – more than 1.343 million tons in November, 2003 and than 1.347 million tons during December, 2002. In Northern America the stockpiles of aluminum reduced in December to 888 000 tons from 903 000 tons in November, last year and rather fewer than 965 000 tons in December, 2002. The inventories of non-processed aluminum again are the most considerable in Europe, where are evaluated at 754 000 tons. This is an increase in comparison with 651 000 tons in November, 2003. The inventories of non-processed metal in Northern America are valued at 451 000 tons – more than 445 000 tons in November fewer than 497 000 tons in December, 2002. Even if to them are added 106 000 tons, which are the inventories of Latin America, they will be far fewer than the European.
Source: Pari (27.01.2004)

The non-ferrous metals on LME in London started the week at lower levels in comparison with last Friday. The copper on the three-month deals tested the support about 2445/2450 USD/t. Aluminum retracted at limited trade with USD 4 to 1632 USD/t, compared with Friday. Nickel became cheaper with USD 130 to 14 700 USD/t through a nervous trade before the labour contracts’ renew in Falconbridge. Zinc lowered with USD 12 to 1020 USD/t.
Source: Pari (27.01.2004)

The German company ThyssenKrupp announced that would increase as of April 1 the prices of its flat steel articles with 30-40 EUR/t /38-51 USD/ because of the higher production costs: iron ore, coke for the furnaces, transport costs, labour costs and also because of the cheaper US dollar.
Source: Pari (27.01.2004)

Ukraine increased the fees for electricity, which will be paid by the sole aluminum plant in the country – Zaporijski aluminum plant. The fee will reach up to 20.54 USD/MW in February from 19.53 USD/MW and from 18.50 USD/MW in December, 2003. In September, 2002 Ukraine bound the prices of the plant’s electricity with the prices of aluminum on LME.
Source: Pari (27.01.2004)

A special programme for evaluation and management of the atmosphere air is waiting for approval by the local Parliament. The measures are especially for the municipalities near KZM-Plovdiv and concern Asenovgrad and Kuklen. The huge development includes working activities for the next 20 years. The problem with the polluted air – with sulphuric dioxide, thin dust fragments and dust, has been recently discussed by an ecological team with foreign participation.
Source: Maritsa (28.01.2004)

Bulgaria entered into the engagement before Euro Commission that the ferrous metallurgy would start to produce 2.5 million tons steel products per year as of 2007. This would be the total production from the three steel-extraction companies Kremikovtzi, Stomana Industry and Promet Steel. The engagement is in accordance with the programme for restructure of the steel-extraction sector, which has been recently presented to the European Commission in Brussels. The Euro Commission wants to clear the quantity of the capacities that Bulgaria holds, since the sector is quite sensitive. The programme is necessary at closing of negotiation chapter Competition. The listed 2.5 million tons are two times fewer than the productions in the 90’s, according to experts. If there is a demand, our companies do not have the right to exceed this volume. We can not say that the metallurgy in Bulgaria will reduce its production in 2007 in comparison with the current levels, commented Ms. Politimi Paunova, a Chairman of the Branch Association on Ferrous and Non-ferrous Metallurgy. The manufacture of all kind of steel products during last year is 1.6 million tons. According to the Association’s data, the manufacture of cast iron in 2003 is 1.393 million tons at 1.072 million tons for 2002. The manufacture of steel is 2.308 million tons at 1.860 million tons for 2002. Besides this, our three metallurgic plans do not work with their full capacity. In some of them the capacities are cut after the privatization. The very companies presented their plans for manufacture in the restructure programme. It became clear that Umicore Med, Kremikovtzi, KZM-Plovdiv, OZK-Kurjali and the Greek Viohalco /owner of Stomana industry, Sofia med and Steelmet/ will require from the Ministry of Ecology and the Ministry of Economy to re-arrange the engagements, which Bulgaria has entered into at closing of negotiation chapter Environment. The companies will offer in a letter to the two Ministers to be created a working group that will evaluate what agreements were adopted in the field of ecology, whether their execution in the deadline is realistic and whether a suspension is required. The plants must coordinate their installations in accordance with the European norms by the beginning of 2007. At the same time the chemical companies that are also big polluters, have a gratis period by the beginning of 2011.
Source: Pari (28.01.2004)

GORUBSSO-Kurjali, which was almost liquidated 5 years ago, will register a profit for 2003 of about BGN 500 000. It is the second year, during which the company realizes a profit and the accumulated debts of BGN 4 million are paid, was reported from KNSB. One month ago in Chala groove started extraction of gold. According to the forecasts, there are stockpiles of several million tons of ore. So far, from the grooves in the region have been extracted small quantities of gold and silver. Over 2000 tons lead-zinc ore with content from 4 to 7 grams per ton are now extracted. The field’s inventories are over 1 million tons. GORUBSSO-Kurjali invested BGN 1 million in a new technologic line for golden concentrate that will be introduced in exploitation in February, this year. Geologic specialists are working on other 4 prospective sections in Kurjali region.
Source: Pari (28.01.2004)

The privileged consumers will only fill in a form in NEC, with which will specify themselves as such ones, became clear at a seminar for the application of the new Energetics Law. After filling the forms, the companies can conclude direct contracts with the central producers of electricity and with NEC, as a trade operator. So far the candidates have passed through a complicated process of certification by the State Energetics Regulation Commission (SERC). The conditions, which regulate whether a company can buy electricity at free dealt prices, will be listed in the new decree for access to the electric networks. The two major requirements are the candidates not to have debts to NEC or to electricity-distribution companies and to consume minimum quantities of electricity, defined by SERC. At the moment privileged companies with annual consumption over 100 GW are: Maritza-iztok mines, Stomana industry, KZM-Plovdiv, Assarel medet, Elatzite med, Umicore, Devnia tzument, LUKoil-Neftochim, Agropolichim and Neochim. Technical conditions for real starting of work in the liberal segment of the market will be available in the beginning of April, 2004. In the end of 2004 for privileged will be also admitted companies with consumption over GW/h and by 2007 they will be able to take electricity from selected by them station or trader. During 2004 sale quotes at market prices were freed from TPS Maritza-iztok 2, TPS Varna, TPS Bobovdol, TPS Ruse, TPS Maritza-iztok 3. The electricity from NPS Kozlodui and TPS Maritza-iztok 3 will be sold only to NEC. Kremikovtzi dropped out from the list of the privileged consumers in 2004 because of debts to NEC. OZK-Kurjali also failed to take permission because SERC found out that the consumption of the company in 2002 reduced under 100 GW/h.
Source: Pari (29.01.2004)

About 30 times increased the volume of trade with metals in the State during the last year, according to data of Sofia Commodity Exchange (SCE). From BGN 3 million (2002) the turnover in this sector increased up to BGN 85 million (2003). The demand of armature iron, of steel and scrap is permanently increasing and the business with metals has turned into a leading one in the exchange trade. The major reasons for the boom are two, according to the Executive Director of SCE Mr. Vassil Simov: the permission of deals in accordance with the Public Procurements Act (PPA) on the exchange as of July, last year and the higher volume of the construction, which is the most considerable consumer of metal articles. From the deals on PPA, the deal, offered by BDZ was quite interesting. The company offered a delivery of new wagons against wastrels for scrap. It is necessary to point out that in the deals with metals for recasting were included not only state-owned but also several private companies. They offered scrap, including imported, at a price between BGN 80 and BGN 140 per ton, regarding its content. However, in the first three weeks of 2004 the offers reduced, said the brokers. The most interesting positions in the new list of the exchange are the offering of 500 tons metals in accordance with a specification (at a price of BGN 600 per ton) and the demand of copper sheet irons (BGN 1100 per ton). On Plovdiv Commodity Exchange the brokers have already traded with prices per kilo, with which made the retail buyers’ situation easier. However, only the construction irons are traded in USD. At the moment the armature iron is offered between USD 345 and USD 352 per ton. The offers of cold and hot-rolled are also in USD. Traditionally, at Ruse Commodity Exchange is trading mainly with armature iron, imported from Ukraine. In the town are situated warehouse of the major importers of this commodity, which is also offered at the lowest prices in the region. The quotes are in BGN per ton. During last year was registered a serious growth in the wholesale trade, was reported from the trade department of Stomana-Pernik, one of the biggest producers in the State. Over 90 per cent of the produced here 700 000 tons are for export. With the rest quantities are supplied Bulgarian distributors, at stable prices and there are discounts for the permanent clients. The company is a property of the Greek group Viohalco (75 per cent of the capital) and the Bulgarian Eurometal (25 per cent). With the made investments, the company has already produced highly qualified articles, wanted at the world market. The plans for 2004 are connected with higher production with more 20 per cent and introduction of new installation for precise shredding of old cars and white technics for scrap. During January in the wholesale deals is observed a decline, was reported from the company Hrist-Com. Now the demand is concentrated mainly in the calibrated iron, which is traded at EUR 330 per ton. It is expected an increase of the domestic consumption of different sorts of ferrous metals, used in the construction, especially in the regions with bigger construction of objects – Sofia, Black seaside and the mountain resorts. The export of highly qualified articles will also rise, since there is a demand at the world market and our prices are competitive, was confirmed from Stomana.
Source: Banker (31.01.2004)

About half of the business with metal scraps in Bulgaria is run by structures from the grey economy, according to surveys of several non-governmental organizations. For the last ten years the losses of the State from thefts of different metals reached BGN 1 billion. Among the most damaged are BTC, Bulgarian State Railways (BDZ) and the road administrations in the State. The specialists are sure that the problem has a solution but so far any of the Governments has failed to set an order. The introduced, not so serious requirements for registration of the companies, whose activity is buying out of scrap, apparently did not give any results. Eventual veto for buying up of scraps without a state certificate of origin, may to great extent to restrict the thefts, according to experts. At the same time, the attempts for legal purchase and re-casting of the hundred thousands of abandoned automobiles in the streets of the bigger towns, proved to be not very successful.
Source: Banker (31.01.2004)

The lack of Chinese players on the market for non-ferrous metals because of the Moon New Year expressed in a calm trade but the rising trend kept. The copper “flirted” with the resistance rates and the aluminum registered new price records without any influence by the lower than expected data for the residential construction and the orders for permanent goods in USA. Aluminum becomes more expensive because of the big demand of commodities and its restricted production when the prices of the energy resources rose. The high copper prices are a result from the shrunk world production during the last several weeks because of the stopped capacities of two big producers. Two more companies – from USA and Canada are about to follow their manner.
Source: Capital (02.02.2004)

Hungary expects to finish during this month the deal for sale of the biggest producer of steel in the country – Dunaferr with the preferred buyer – the Ukrainian Donbas-Duferrko. In December the latter won the competition for Dunaferr owing to its ambitious investment programmes in amount of 13 billion florins and EUR 250 million and the engagement not to be laid-off any employees. The Ukrainians will pay USD 2.1 million for Dunaferr, which has debts of 60 billion florins. Meanwhile, the British steel-extraction company LNM Group, one of the leading producers in the world, with strong positions in Eastern Europe announced that it would bid for the major share in the steel extraction Bosnia top company BH Steel. The Indian company Inspat and Bosnia-Kuwait joint-venture with head-office in Zenitza are also expected to take part in the competition. The Russian Severstal finalized the purchase of the bankrupted American Rouge Industries after it acquired 100 per cent of the fifth by size steel-extraction company beyond the ocean that will be called Severstal - Severstal North America. In this way Severstal most probably will manage to import, without a quote, metallurgic semi-manufactured articles from Russia to America in order to content the needs of its plant there.
Source: Pari (03.02.2004)

Copper has become more expensive up to new highest amounts for 6.5 years now - 2517 USD/t at 2495 USD/t on Monday at the closing. The new peaks for the red metal were real because of the expectations for market deficit. Lead registered 7.5-year maximum of 793 USD/t and the zinc – a 3-year peak of 1058 USD/t. Nickel exceeded the levels of 16 000 USD/t because of the strike in one of the mines of the leading world producer – Canadian company Falconbridge. Aluminum has set its peak levels since September, 2000 - 1659 USD/t.
Source: Pari (03.02.2004)

The non-ferrous metals on LME continued to become expensive on Tuesday as well, confirming the expectations that will be one of the most profitable assets in 2004. The copper three-month deliveries rose up to a new 6.5-year maximum - 2526 USD/t, adding new 29 USD/t to its quotes from Monday. The red metal is supported by the weak dollar and the strong market fundamental factors – the forecasts for deficit and the decreasing exchange inventories that fell to the lowest levels since March, 2001. The lead, which has reached on Monday the highest prices for 7 years and 3 months, was traded a little under them at 788 USD/t and the zinc registered a new 3-year record of 1064 USD/t, higher with 11 USD/t in comparison with Monday and conquered the levels of defence of 1060 USD/t. Aluminum quoted at 1653 USD/t, with 5 USD/t higher than the closing on the previous day but still under the maximum of 3 years and 3 months, reached on Monday. Nickel became expensive up to 15 140 USD/t at 14 900 USD/t on the previous day and continued to gain from the strike in Sudbury mine of one of the top producer of nickel in the world – the Canadian Falconbridge.
Source: Pari (04.02.2004)

Since the beginning of 2002 the prices of steel have been growing. In 2003 the price of the hot-rolled cast-iron jumped from 280 up to 350 USD/t and of the cold-rolled – from 360 up to 450 USD/t. The market observers forecast that the steel will continue to be expensive during the current year as well. According to Russian experts, in 2004 the steel prices will increase with 15 per cent at the international markets. The average quotes of the hot-rolled cast-iron wil reach 380 USD/t. Other analyzators expect that during this year, the hot-rolled cast-iron will become more expensive with 23 per cent and the cold-rolled – with 16 per cent. One of the major factors for the rising trend is that the consumption in China and Southeastern Asia at the moment is not satisfactory. The steel quotes’ growth will allow the metallurgic companies to register higher profits in 2004. A slump of the quotes may start in 2005.
Source: Pari (04.02.2004)

The Polish company KGHM that extracts copper and silver, at sixth and second place by manufacture of these metals in the world, plans to increase the production of copper metal in 2004 and 2005 in order to gain top benefits from the higher metal’s prices. The Government considers that now is the most favourable moment to sell its 44.3 per cent in KGHM.
Source: Pari (04.02.2004)

The import of steel in USA during December, 2003 fell down in comparison with the former month with 10.7 per cent and with 41.2 per cent in comparison with the same month of 2002 and it was 1.533 million tons.
Source: Pari (04.02.2004)

Copper has increased its price up to the highest for 6.5 years levels or 2559 USD/t and is on the way to conquer the record 2600 USD/t. Among the major reasons for the rising movement of the metal is the continuing strike in one of the grooves of the biggest mine-extraction company in the world BHP Billiton, where are extracted 130 000 tons per year. The rest key factors are the low inventories and the fears of copper deficit on the market. Lead has exceeded for a first time for 7.5 years 800 USD/t and was traded at 808.50 USD/t when became clear that one of the leading world companies Tech Cominco stopped the production in one of the refineries because of an explosion in a furnace. Aluminum set a new 3.5-year record of 1667 USD/t.
Source: Pari (05.02.2004)

Regarding the rising prices of the copper, the biggest company for refining of this metal in Europe – the German Norddeutsche Affinerie, decided to invest USD 37 million as an initial investment in the processing of copper in China where the demand of copper is increasing every year and is equal to 3 million tons. For this purpose it will invest these capitals in production, which will be realized in cooperation withYunnan Copper – the third by size producer of copper in China. Recently Norddeutsche Affinerie has also turned to the manufacture of copper products and cathodes.
Source: Pari (05.02.2004)

One of the requirements for our accession to EU is to liberate Bulgarian electricity and gas markets. Now they are held by monopolists – NEC buys the entire electricity, produced by the stations and sells it at regulated prices for public and industrial needs. Bulgargas is the sole importer, wholesaler and transit company for natural gas in the State. The new Energy Law envisages the markets of electricity and gas to liberate regularly. For this purpose will be allowed privileged consumers that will be able to buy energy from the producer that sells at the most reasonable prices and to transfer it through the networks against a transfer fee. By the end of March has to be adopted a decree for access of other countries to the electricity-transfer and distribution network. According to the decree, the privileged consumers in 2004 are those with over 100 million and with 40 million kw/h annual consumption of electricity. In 2005 privileged consumers will also be those with over 20 million and during 2006 – with over 9 million kw/h. The market liberalization must be full even if the public subscribers choose the supplier in July, 2007. At the moment the market does not stimulate the producers to cut their costs, neither to offer the consumer a lower price of the final product. The price, at which NEC buys out the electricity from them, is confirmed by the State Energetic Regulation Commission in accordance with the costs that can be proved by the respective company. The Commission has already defined that in 2004 23 per cent from the producers’ manufacture have to be sold at the market principle and they must find clients for it, otherwise there will be registered a loss. The percentage of the non-realized energy will grow proportionally with the extents of the market’s opening. This will force them to cut the production costs in order not to bankrupt. For the first six months of 2004 from TPS Maritza-iztok 2 were liberated 880 000 MW/h, from TPS Varna – 520 000 MW/h, from TPS Bobovdol - 340 000 MW/h. TPS Ruse can sell at the free segment electricity, produced only by IV block. The electricity from NPS Kozlodui and TPS Maritza-iztok 3 will be sold only to NEC. Companies that receive licenses to trade with electricity from the State Energetic Regulation Commission, will be able to buy electricity from all stations, to mix cheaper and more expensive productions and to offer lower prices than NEC. The trade will be realized through bilateral contracts between the producers and consumers. On them will be registered the main quantity of electricity - 95-97 per cent and for the rest 3-5 per cent will have a balance mechanism. The prices will be confidential and won’t be known even to the trade operator. The privileged consumers have to pay to NEC a transfer fee for using the network that is BGN 11.80 per MW/h, without VAT as of July 1, 2003. The first privileged consumers are 10 big industrial companies with consumption over 100 billion kw/h and without debts to NEC and electricity-distribution companies. These are Maritza-iztok mines, Stomana industry, KZM, Assarel Medet, Elatzite med, Umicore med, Devnia cement, LUKoil-Neftochim, Agropolichim and Neochim. Their interest to take part in the free market is dictated by the opportunity to drop out NEC and to deal the quantity and price of the electricity directly with the producer.
Source: Pari (05.02.2004)

Lead, copper and zinc registered a record on LME over the last week. The lead exceeded USD 800 per ton for a first time since May, 1996 with the support of the news for the lower production of the Canadian company Teck Cominco because of a break-down. The copper has registered the highest amount since 6.5 years up to USD 2560 per ton. The anxiety of eventual deficit and the decreasing inventories are the reason for the copper’s higher price. The zinc exceeded its record of 6 years ago and reached USD 1069 per ton on the background of fears for closing of the production capacities. However, the defence level of 1070 USD/t proved to be hard for overcoming.
Source: Capital (09.02.2004)

Dobrich District Court is selling off mine technics of the bankrupted Mangan SP JSC. The company holds the rest state-owned stake in the old groove near the village of Obrochishte. The company also owes over BGN 414 000 to the State treasury. Recently the Court has admitted another debt of BGN 46 000 to the State Receivables Collection Agency. It is expected the technics to be acquired by Euromangan, which meanwhile won the concession for the mine. The major owner of Euromangan is the Swiss Olberg holding.
Source: Black sea (10.02.2004)

Most of the countries from EU will introduce restrictions for workers from the new countries-members of the Union. The objective of these measures is not to be allowed a shock on the national labour markets.
Source: Pari (10.02.2004)

The workers in Kremikovtzi start an effective strike, decided the syndicates from KNSB in the metallurgic plant. The employees insist on receiving the delayed salaries not later than March 31. Besides this, they want to be introduced a schedule for the advanced payments and to be provided working clothes. By the end of March to be executed a thorough re-evaluation of risk at the working place and immediately to be stopped the lay-offs in Kremikovtzi, the workers also demanded.
Source: Standart (11.02.2004)

Ministry of Waters and Environment is planning to invest BGN 45 million in the building of new ecological facilities in Bulgaria this year, Minister Dolores Arsenova said in Elena. According to her, the lack of purifying facilities is a serious problem and the Ministry has elaborated a programme, which is a part of the EU negotiations under the chapter Environment.
Source: Pari (12.02.2004)

There was some instability at the non-ferrous metals’ prices on LME, caused by the missed chance to be stabilized at the higher levels. The three-month copper deliveries were traded with 18 USD/t higher in comparison with Tuesday at 2584 USD/t. Aluminum retracted with 3 USD/t up to 1665 USD/t and the zinc – with 1 USD/t up to 1072 USD/t. Lead became cheaper with 2 USD/t and was selling at 829 USD/t. Nickel set at 15 025 USD/t, which is a reduction with 15 USD/t compared to the former day.
Source: Pari (12.02.2004)

The huge growth of the Chinese consumption of metals in combination with the economic boom of the western economies will increase the price of the non-ferrous metals. These are the forecasts, made at a conference, organized for the metals in Capetown. For several months now the prices of key non-ferrous metals constantly have been moving upwards and reached levels, not seen for a decade. The copper registered a new 6.5-year record of 2600 USD/t three days ago. The role of China for this trend is big and it can be explained with the fact that imports 80 per cent of the copper, 60 per cent of the iron ore and 100 per cent of the platinum, necessary for the industry. Regarding the heavy state of the local mine-extraction industry and the unwillingness of the big players in the sector to make investments in it, there has to be expected that China will continue to import huge quantities of metals for the time being.
Source: Pari (12.02.2004)

Bulgaria will have to pay some EUR 2.220 million in NATO’s budget this year, according to the preliminary forecasts about our country’s annual quota. Ministry of Foreign Affairs explained the annual payment had three components. For the year 2004, EUR 410 000 would be allocated to the state budget, EUR 1.34 million – for the military budget, and EUR 470 000 – for the programme for investments in security. According to forecasts, the amount of the payment in 2005 would be EUR 3.380 million and in 2006 – around EUR 3.820 million.
Source: Pari (16.02.2004)

With a jump of USD 200 during the week and with about USD 450 since the beginning of the year, the copper quotes on LME registered a boom in the demand of the red metal by the side of China. The prices on the deliveries by 3 months increased with more USD 25 up to 2727 USD/t, reached for a last time in December 1995 with the peak of 2776 USD/t. Market analyzators remind that in 2003 the copper became more expensive with over 700 USD/t or with about 40 per cent. The new price peak was supported by the weak US dollar and by the low level of the exchange inventories. On the last exchange day on LME, they reduced with more 3950 tons to 323 255 tons – their lowest level since March 2001. Before the producers to manage to deliver the necessary quantities, LME expects a new price penetration of the level of 3000 USD/t, just like the tremor in the end of 1995, caused by speculations of the Japanese Sumitomo Corp.
Source: Pari (16.02.2004)

Copper was the hit at the market of non-ferrous metals in London during the last week. The red metal has reached the highest value for 7.5 years now when jumped up to 2615 USD/t. The quotes of the copper for a consecutive time since the beginning of the year moved upwards on Wednesday when the Chairman of Federal reserve of USA Mr. Alan Greenspan gave his silent agreement for the cheaper US dollar. The lower US dollar and the increasing consumption guarantee the increasing prices of the metals, commented Mr. Martin Fueggins from Mitsui Bussan.
Source: Capital (16.02.2004)

Natural gas, petrol and the used automobiles take 15 per cent of the total import of the State for 2003, according to data of NSI. According to NSI, these groups of goods hold the leading place during the last years. In 2000 they formed 23 per cent of the import, in 2001 – 19 per cent and in 2002 – 18 per cent. A growth with over 40 per cent is observed in the transport equipment and the industrial deliveries, which form respectively 10 per cent and 35 per cent from the import.
Source: Monitor (16.02.2004)

BGN 215.483 million are the debts of the fifty biggest debtors to the National Social Security Institute in the end of 2003. The amount includes the principal and the calculated interests. The top list is headed by the metallurgic plant Kremikovtzi, then follow Stomana-Pernik, Varna shipyards and Vidachim. The average insurance income in the 20 most correct companies with 15 employees is BGN 885. In these companies are working 267 people. Among them are Siemens business services, Coca-Cola Bulgaria, Daewoo-Bulgaria, Crown Agents, TBI leasing and others.
Source: Pari (17.02.2004)

The stake of 766 250 shares from the capital of Lead and Zink Complex-Kurdzhali, which was sold on the block segment of Bulgarian Stock Exchange last week had a new owner. The deal was executed on the official market, segment A. The sale was executed by a cross deal between the intermediary - Economic and Investment Bank at an average price of BGN 7.50 per share, as compared to the price of BGN 1.00 per share during the previous week. Most probably the company which sold the stake last week - L.Z. Metal Trading Limited, was buying back the shares.
Source: Pari (17.02.2004)

An ecological project in the amount of EUR 800 000 can fail, was reported from KZM JSC-Plovdiv. It is about the entire finished recultivation of a depot for storage of industrial wastes, for which was spent the amount grant from the World bank. SP Stefan Kunev-Sofia has a license from the Ministry of Environment and Waters to execute research activities in the depot for extraction of rest metals. KZM is the owner of the waste clinker and of the depot’s area, claims the Chief lawyer of the plant Mr. Rozin Angelov. According to the MP from the National Movement Simeon II Mr. Dimitar Peichev, the clinker is a property of the State that can grant it on concession. Mr. Peichev said that he knew about the problem since he took part in interadministrative expert Council that reviewed the ecological project. At the privatization of KZM in January 2001 was concluded an executive agreement between the buyer KZM 2000 and the Ministry of Environment and Waters and PA. In it was dealt the financial frame of the project for liquidation of old eco-damages. KZM as an investor gets EUR 800 000, grant from the World bank for reconstruction of the area, where is stored the clinker. However, on February 10, 2004 from SP Stefan Kunchev sent a letter to KZM, with which is required a permission to enter the depot with technics since the area is a property of the plant. In this case the point of the dispute is whether when the State pays for the liquidation of the old eco damages, it becomes owner of the controversial waste.
Source: Pari (17.02.2004)

The Russian giant in the production of nickel Norilsk Nikel plans to launch at the market bonds for USD 1 billion that may be converted in American Depository Receipts /ADR/. The bank-industrial group Interros that controls the company and Norilsk refused to comment. There were not any additional parametres on the issue. The point of the selling of new bonds is through them the investors to acquire a share from the company. In the beginning of the year the company submitted a declaration to the regulatory bodies on the Russian exchange, in which is demanded to be increased the limit of the traded ADR from 23.3 to 40 per cent. In the end of last year UBS sold bonds, converted in ADR for USD 325 million. According to analyzators, the new issue corporate bonds for exchange against ADR will influence negatively on the shares’ prices, which will reflect a growth in the supply. Even with the beginning of the new week the shares of Norilsk became cheaper with 0.36 per cent and were traded at USD 68.50.
Source: Pari (17.02.2004)

The impressive progress in the prices of the most non-ferrous metals, used in the industry continued yesterday as well. On LME the three-month deliveries of copper added new 40 USD/t to its prices and were traded at the highest for about 8 years value of 2735 USD/t. Aluminum, which is the most used metal on the Earth for manufacture of long-term goods, became expensive more moderately – with 8 USD/t up to 1731 USD/t, which however is a 4-year price peak. Zinc added new 13 USD/t and was traded at 1113 USD/t, which has been its highest value since 2000. Nickel that has recently registered a 15-year peak, was quoted at 15 480 USD/t. Tin continued its stable performance and was quoted about 8-year record of 6740 USD/t. Lead, whose major final consumer is the automobile industry, became expensive with 5 USD/t up to the highest prices for 7 years and 3 months or 863 USD/t. The major supporting factor for the market is the reviving of the global economy, thanks to which the demand increases. Some of the metals registered a deficit and the inventories of others are quite shrunk.
Source: Pari (17.02.2004)

The third by size producer of copper in the world Grupo Mexico announced that the produced metal in 2003 exceeded slightly 800 000 tons, which is little under the rates of the former year. The company plans to increase its productions in 2004.
Source: Pari (17.02.2004)

Within the next three months we will receive EUR 70 million on the ISPA programme for the construction of Dunav most 2, was reported from the Ministry of Finances. The Ministry of Mr. Milen Velchev has submitted at the European Commission an application form for co-financing on ISPA programme for the construction of the second bridge over Danube river. By this document the country applied for receiving of EUR 70 million, or 31.39 per cent of the total value of the projects, which is EUR 223 million.
Source: Pari (17.02.2004)

Thirty-nine days after an accident at the Sofia-based Kremikovtsi steelworks took the lives of three workers, the plant continues to pile debts while the commissions set up to investigate the deadly mishap are yet to produce concrete results. At this stage, neither the State Receivables Collection Agency nor other creditors plan to file any claims against the steelworks. The National Social Security Institute announced a day ago that it has unfrozen the plant's accounts because Kremikovtsi was observing strictly the debt settlement plan. No other Bulgarian company that has gone private has been cut as mush slack by its creditors as has Kremikovtsi. The steelworks owes 7.3 mln levs to the national railway company BDZ. The metals firm and the carrier have signed an agreement for the weekly repayment of 1.5 mln levs but have clashed over the cargo tariffs for 2004. BDZ is seeking a 10% increase while Kremikovtsi insists for no more than 8%. In 2003, Kremikovtsi clinched a 10-year deal with Bulgargaz for the repayment of 35 mln levs to the gas firm but in January 2004 alone the metallurgical plant ran up 4 mln levs in unpaid gas bills. Kremikovtsi's debts increased by over 200 mln levs last year with long-term debts totalling 263.626 mln levs and short-term dues at over 736.7 mln levs.
Source: Dnevnik (18.02.2004)

Batova River Manganese Mine Ltd. received a permit from the Regional Inspection of Environment and Waters – Varna to build a gallery for research extraction in the region of Obrochishte near Albena. The company, however, is not allowed to implement industrial extraction.
Source: Pari (18.02.2004)

State-owned companies and companies with state stake of over 50 per cent are going to allocate a 50-per cent state dividend from their profit, according to a decree by the Council of Ministers published in the State Official Gazette. Within a month, the state agencies should present in the Ministry of Finance a monthly allocation of their approved annual incomes, expenditures and subsidies. Minister of Finance is going to report the budget implementation in the Council of Ministers on a monthly basis.
Source: Pari (18.02.2004)

The speculative purchases, deficit, global economic growth, increased demand, mostly from China, the cheap US dollar and the shrunk inventories on the stock exchange catapulted the copper up to the highest prices since 1996 at the world markets. Yesterday it became more expensive with new 75 USD/t compared to Monday and reached the record for 8 years now 2812 USD/t and according to all analyzators, the copper is quite close to conquer the levels of 3000 USD/t. For its higher prices also influenced the disputes between workers and owners of several of the big copper-extraction mines in the world. In the first rally at the world commodity exchanges during the new millenium, the copper involved the rest non-ferrous metals. Tin has reached its highest prices for 8 years and 3 months. Zinc registered a 39-month maximum 1130 USD/t.
Source: Pari (18.02.2004)

Varna’s regional Environment and Waters Inspectorate approved the investment offer made by the English company Batova River Manganese Mine Ltd. to research and excavate up to 10 000t of manganese from the region near the village of Obrochishte. The investor intends to produce 300 000t of manganese annually. The Council of Tourism in Kranevo, Albena JSC, as well as representatives of many scientific institutions and ecological organizations protested against the decision of the Inspectorate.
Source: Standart (19.02.2004)

The companies that don’t pay salaries and don’t submit insurances on them for their employees must be declared in bankruptcy. Among the biggest debtors of the Health insurance bank were employers that did not pay remunerations for months – Kremikovtzi, Stomana-Pernik, the mines and others. Now it seems that their employees do not have the right for free treatment because the health installments were not transferred. According to Mr. Shterev who is a Director of the Parliament Health Commission, the State must force the companies (even through the Court) to pay at least the minimum salary of BGN 120. He will offer to be extended the time for rescheduling of the health installments with two more months. Now the deadline is by April 30. The idea of Mr. Shterev is the documents to be submitted by the end of June. About 700 000 are the debtors that have debts to the bank for more than 3 months. Among them are many insolvent citizens as well.
Source: Trud (19.02.2004)

Bulgaria’s official incomes from Bulgarian citizens living abroad are in the amount of BGN 1 billion, Mr. Bojidar Danev – Chairman of the Bulgarian Industrial Association said in Pazardjik. At least the same amount has been imported in the country illegally. This non-taxable financial resource plays a major role in the movement of the market and increasing of the population’s buying capacity, Mr. Danev said. According to him, Bulgaria has a chance to repeat Ireland’s successful model, where the economic growth made emigrants go back to their native land. If the Government shadow business policy turns out successful, economic growth may reach levels of 7-11 per cent. Therefore, customs control should be increased, and enterprising – stimulated, Mr. Danev added.
Source: Standart (23.02.2004)

Bulgaria’s gross foreign debt as of December 31 2003 reached USD 13.147 billion. In face value, our country’s foreign debts grew with USD 1.903 billion compared with the same period of last year. At the same time, there is a drop in the real values of the indicator, which decreased with 2.4 per cent to 69.9 per cent of GDP. The debt continues to grow calculated in USD, while calculated in EUR , it registered a significant drop of EUR 347 million to EUR 10.421 billion.
Source: Pari (23.02.2004)

BGN 1,2 billion were taken off from Kremikovtzi. From them BGN 600 million is the stolen profit. According to the MP from Coalition for Bulgaria Mr. Radoslav Ilievski, the theft was executed during the period June, 1999 - 2001 when the plant was privatized. He received many documents revealing the violations in his P.O. box. The MP has not still checked the truth of all facts on them.
Source: Monitor (23.02.2004)

The British steel-extraction company LNM, a property of the businessman Mr. Lakshmi Mital and second by size in the world, is a favourite for the purchase of the Polish Huta Czestochowa and Bosnia BH Steel and is on the way to strengthen the leader’s positions in the eastern European steel extraction. LNM, which has already become owner of the biggest plants for manufacture of steel in Poland, Czech and Romania, is preferred among the Ukrainian Donbas for the final negotiations for the sale of Huta Czestochowa. Last year Donbas acquired the Hungarian Dunaferr. LNM hopes that Polish steel industry, now burdened with heavy debts, to boom because of the higher demand of automobiles, the movement at the construction market and the household technics’ sector. LNM and the Indian Inspat are the sole candidate-buyers of the major stake /51 per cent/ in Bosnia BH Steel, became clear in the end of the last week. BH Steel is a joint-venture with the participation of Bosnia and Kuwait Investment Agency /KIA/. It produced about 100 000 tons steel during 2003 in comparison with 2 million tons before the war in the country during 1992-1995.
Source: Pari (23.02.2004)

The anxiety on LME calmed down and the three-month copper deals were concluded at 2872 USD/t, with 2 USD/t higher than Thursday /at 8-year maximum of over 2900 USD/t during last week /. Aluminum became cheaper with 9 USD/t to 1727 USD/t at 1775 USD/t during the week /6.5-year peak/. Nickel retracted with 380 USD/t to 15 100 USD/t, while zinc became expensive with 5 USD/t up to 1123 USD/t. Lead added 4 USD/t up to 870 USD/t.
Source: Pari (23.02.2004)

The consumption of copper jumped up to the record 15.7 million tons during last year while the produced volumes reduced and thus on the market emerged a deficit of 351 000 tons. This is the summarized evaluation for the market conditions of the World Bureau for Metal Statistics. It forecasted a considerably bigger metal deficit, according to its first forecast for 2003 - 531 000 tons. The produced aluminum between 2002 and 2003 increased with 7 per cent and the demand - with 8 per cent and WBMS calculates the market surpluses at 573 000 tons. There are surpluses at the market for a third consecutive year. According to WBMS, on the biggest market-place of non-ferrous metals, the inventories dropped with 115 000 tons and of the tin – 20 000 tons. The demand of the latter metal for a first time penetrated the levels of 300 000 tons per year mainly because of the higher Chinese consumption.
Source: Pari (23.02.2004)

The mine extraction company N1 BHP Billiton expressed its doubts about the long-term application of the current projects for enlargement of the manufacture of many copper-extraction companies. BHP Billiton forecasts that they are not in accordance with the economic cycle in spite of the 8-year peak in the copper’s prices.
Source: Pari (23.02.2004)

The biggest producer of iron ore – Brazilian CVRD concluded a delivery contract for 20 million tons raw-material per year until 2009 with the steel top company Arcelor. This is the biggest contract in the history of CVRD.
Source: Pari (23.02.2004)

LME registered the consecutive record high amounts at the non-ferrous metals. The prominent leader in the group – the copper registered an 8-year maximum of USD 2970 per ton. Obviously the attack of the important level of USD 3000 per ton is a matter of short term, commented any analyzators. Others consider that a “deep corrections” period is forthcoming or in other words lower copper price in the frames of USD 200-300 per ton. The truth is that the fundamental market factors are dictating a further price rising – the inventories are at 8-year maximum, the supply problems are real and the US dollar is going lower. The increase of the copper moved also up the other non-ferrous metals. Aluminum registered a 6-year maximum, tin – 8 year maximum and zinc – 3 –year maximum. Lead is the most expensive when in the beginning of 90’s started trading in USD instead of GBP.
Source: Capital (23.02.2004)

Marcegalia is negotiating for the purchase of the majority stake of shares of Kremikovtzi, said the Deputy Prime Minister Ms. Lidia Shuleva after a meeting with the President of the Italian group Mr. Steno Marcegalia. The Government will support this future deal if the new shareholder executes its engagements for restructure of the steel-extraction, preservation of the Environment and investments, Ms. Shuleva said. Marcegalia is the biggest trade partner of Kremikovtzi. In the end of 2003 the two companies signed a contract, according to which our plant will provide up to 2 million tons production to Marcegalia during the next 5 years. The amount of the contract is about EUR 1 billion. The Italian Ministry of production activities grants EUR 13,5 million for small and medium-sized companies on the Balkans. The funds will be granted by Bulbank at relieved conditions and at lower interests. Italian companies also took interest in investments in the winter and balneological tourism.
Source: Standart (24.02.2004)

The number of employed in Bulgaria in the last quarter of 2003 was 2825.6 thousand, which represents 42.3 per cent of the population of 15 and over 15 years of age, NSI announced. The employment ratio is respectively 46.7 per cent in towns and 32.3 per cent in villages. The biggest number of Bulgarian citizens are employed in the private sector – 1 854.7 thousands, accounting for 65.6 per cent of all the employed. 964.7 thousand people, representing 34.1 per cent of the total number of employed, are working in the public sector. The number of unemployed in the review period is 411.4 thousand, which is 12.7 per cent of the active population. The level of unemployment in the towns is 11.6 per cent.
Source: Pari (24.02.2004)

BGN 3 million is the financial resource, accumulated by State Fund Agriculture, which will be used for export subsidiaries for especially volatile agricultural products, announced the Minister of Mr. Mehmed Dikme at the opening of the agricultural exhibition Agra 2004 in Plovdiv yesterday. The project for the export subsidiaries has to be adopted by the government by March 31.
Source: Monitor (25.02.2004)

The state will be issuing bank crediting guarantees to companies, participating in projects for the modernization of the Bulgarian army, Mr. Nikolay Svinarov – Minister of Defense, announced during the Bulgarian – Czech forum. He added the proposal would be coordinated with the IMF, because the fund had fixed a limit for the loan guarantees. Mr. Svinarov said he hoped the IMF would give its agreement by the middle of the year. Companies from USA, Germany, Italy and Spain were ready to finance projects in the defense field, if the state issues guarantees for loans on them. Bulgarian companies may take part in the projects as subcontractors.
Source: Pari (25.02.2004)

Kremikovtzi – privatization – report – positions -Is there an illegal taking off of money from Kremikovtzi? The reason for our next conversation is connected with the Coalition for Bulgaria because three MPs from it declared they had received a report from anonymous expert team in which is claimed that from Kremikovtzi were illegally taken off BGN 1 200 000 for the period 1999-2001. According to the anonymous report, BGN 600 million, i.e. half of this amount was transferred in private accounts. -Mr. Lambovski, is the question logical, three MPs from Coalition from Bulgaria received such an anonymous report and you as a member of this commission and person, who is directly related to these matters and responsible for them, did you receive such signals? Mr. Dimitar Lambovski: At first, I would like to correct you. The commission is for privatization control, i.e. the idea was also to be executed a current control on the privatization process in the State, which in fact did not happen, i.e. such a Parliament control does not exist as of the moment. -It has not been done. Mr. Lambovski: …..at least in not very effective way. At the beginning I was Chairman of the Commission and made great efforts to analyze the thorough privatization process in Bulgaria. We developed a detailed report and showed how in the frames of three Cabinets, we are witnesses of one commission legislation, which serviced any interests in accordance with the very situation during the mandates. -Is Kremikovtzi a part of this commission legislation? Mr. Lambovski: No, not particularly for one economic object. I am talking as a philosophy of the privatization processes that it happened and unfortunately is still happening although only at definite elements but I consider that the process is more transparent and the deals are more known to the society. -Can the National Movement Simeon II cope with the so called commission legislation, as you said, in the privatization? Mr. Lambovski: I can’t say for certain. You know that when I handed in my resignation from the sub-commission, I had my opinion and I shared it with the media. But Kremikovtzi is a typical example in which way we managed to execute on time the privatization of one of the biggest Bulgarian enterprises. Naturally, after the privatization, there are also other facts, which I can’t say whether they are true or false. So, this is a typical example how a privatization process should not be done, i.e. a delay in time on one side, decapitalization. . . -And all this has already happened? Mr. Lambovski: Yes. -And now we will ask Mr. Tomov because according to the experts, who wrote this anonymous analysis, the money, taken off from Kremikovtzi started when 71 per cent of the shares were transferred to the current Director of the Managing Board Mr. Valentin Zaharies. Which is your supervision. . . Mr. Tomov: First I would like to say that I don’t have shares in Kremikovtzi and was not involved in the conclusion of this deal in any way. I don’t even have a clue of it. -You started there later. . . Mr. Tomov: I am there as an independent entity, I don’t take a salary, I am a member of the Supervisory Board. First, the whole truth for Kremikovtsi must be revealed. The deed of these three MPs is the consecutive shameful act that disparages Bulgarian Parliament. . . -Why? Mr. Tomov: . . .the Bulgarian MP. Just imagine, an anonymous report suddenly appeared. But they made a press conference, organize it, they are preparing. What do they have in common with Kramikovtzi? -They received this report. Mr. Tomov: No, they did not receive. They are just people who are forced to speak. -Tell, who may be behind them? Mr. Tomov: Since they speak from the party’s side, i.e. they are representatives of one and same political force, it is obvious that is someone from there. -Someone from Bulgarian Social Party? Mr. Tomov: I will say at once – in order to reveal who stands behind all this I will say that behind this report, made 2 years ago, but now available as an anonymous material because it appeared then but no one paid attention. Behind all this are standing exactly these forces and groups that took off the funds illegally and left Kremikovtzi with a liability of BGN 1 billion. . . -Who are they? Mr. Tomov: The biggest. . . Multigroup but they are about 600 companies that got use of this plant. -Do they have any political protection? Mr. Tomov: Apparently yes, with these three MPs. Because, just think that having a liability of one billion, from which BGN 250 million out of the privatization contract, scarcely today are revealed such questions like illegal taking off of funds. These funds were certainly taken off illegally. But how the private owner will take own money from himself? -They claim that the money was taken after the plant’s privatization and in personal accounts, according to the report. Mr. Tomov: This is not true. You see, this is not true and this can not happen when every year a big company like Deloitte&Touche or KPMG is making audit services. How can it be possible in case that three Swiss banks review every invoice, check everything in order to finance this plant. -Does Kremikovtzi trade with off-shore companies and sell its production at lower prime cost? Mr. Tomov: First, this is a problem of the very owner but I will tell you at once, yes, there are such off-shore companies. -There are ones. Mr. Tomov: And I will tell you why. They are also under supervision of the same banks. The reason is very simple – because the plant was bought, as Mr. Lambovski said, against a big debt and if this debt is not paid, if this debt is demanded, particularly the hidden debts, in every moment they can block each account, in case they are the official accounts of Kremikovtzi. The owner ran in order to realize the scheme price against debt.
Source: Other (25.02.2004)

The investment company Dundy precious metals will turn to the gold extraction in order to provide to its shareholders better profit from its assets in Bulgaria. The company relies mainly on the extraction of gold in the mine in Chelopech where the quality of the precious metal is good. According to experts, the potential fields of the mine in Chelopech are 2,3 million ounces gold and 6,5 million ounces silver. The Canadian company intends to invest USD 40 million in the modernization of the groove and in the development of a smaller field in Eastern Bulgaria.
Source: Monitor (26.02.2004)

The electricity bills of the Bulgarian households will grow with at least 2 per cent after the introduction of the energy excise, show the calculations of the work-team, in which participated representatives of the Ministry of Finances and the Ministry of Energy. The electricity excise is compulsory for the member states of EU. The excise for industrial needs is in amount of EUR 0.5 per 1000 kilowatt hours, and EUR 1 per 1000 kilowatt hours for the households.
Source: Sega (26.02.2004)

Kremikovtzi’s Management and the Trade Union KNSB did not reach an agreement for the payment for the payment of the working salaries. According to syndicates, the plant owes salaries for December, last year. The strike preparations are continuing. Over 50 per cent of the workers supported this protesting form, was reported from KNSB.
Source: Pari (26.02.2004)

After Bulgaria becomes EU member state, all automobile gas installations in the country will have to be re-registered, experts from LUKoil Neftochim Bulgaria announced during a seminar held in the resort Borovetz on the topic Fuel Market in the Country. European Commission has 13 specific requirements for the use of car gas installations, and after Bulgaria joins EU, they will have to be applied in our country as well, company representatives added. The share of LPG in the sales of fuels in Bulgaria has been constantly growing over the past few years. The best sold fuel in LUKoil in 2001 was diesel, accounting for 35.8 per cent of all the amounts sold. LPG had a 20.1 per cent share in sales. In 2003, diesel fuel accounted for 27.3 per cent of the market share, while LPG’s share reached 31.6 per cent.
Source: BTA (27.02.2004)

The former Director of Stomana JSC-Pernik Mr. Valentin Bakalov and the Manager of Investments sector in the company Mr. Pencho Dimitrov are accused of a criminal breach of trust. For the period May 2001 – May 2002 both of them broke their duties in order to gain benefits for Alpa-2000 Ltd.-Pernik in amount of BGN 2 289 791 and for other companies and physical entities in amount of BGN 1 255 132. After their actions Stomana JSC was damaged with BGN 3 544 923, according to the documents. Owners of Alpa-2000 are Mr. Ivan Yankov and Mr. Nikolai Presolski. Their company was interested mainly in the equipment of Loom 500 and Loom 2 300. Recently these have been the major capacities in Stomana JSC, producing sort and list cast-iron. At the same period the security service of Stomana JSC were provided by two security companies – Stomana Security Ltd. and Concord Security. The cargo cars of Alpa-2000, full of machine parts, were allowed to pass the exit although the drivers did not have the necessary documents.
Source: BTA (01.03.2004)

Bulgarian citizens who live abroad transferred in the State about USD 675,7 million during 2003, was reported from BNB. This is with USD 175,9 million more than in 2002. The direct foreign investments are USD 1,360 billion. They increased with 50,4 per cent or USD 456,1 million compared to 2002. From the privatization are gathered USD 370,1 million. The deficit in the foreign trade in 2003 is USD 2,473 billion. The export increases with 30.7 per cent up to USD 7,438 billion. The currency reserves of BNB are higher with USD 932,5 million, compared to USD 586.3 million in 2002.
Source: Standart (01.03.2004)

The copper has passed the psychological limit of 3000 USD/t in London for a first time since August 1995 and settled at 3020 USD/t. The red metal has become more expensive with 30 per cent since the beginning of 2004 and according to analyzators the prices’ boom will continue. Yesterday the copper managed to add 2.5 per cent to the prices from Friday and the market deficit and shrunk exchange inventories are in the base of the abrupt price rising. Copper also influenced the rest non-ferrous metals and the zinc and tin registered a 7.5-year price record respectively at 1168 USD/t and 7000 USD/t – more with 30 USD/t and 50 USD/t compared to Friday. Lead added 46 USD/t to its quotes and was traded at 925 USD/t and aluminum became more expensive with 8 USD/t up to 1734 USD/t. As a whole, the market trend is kept and most probably won’t be changed, recapitulated Mr. Robin Bar from Standard Bank
Source: Pari (02.03.2004)

Austria occupies the fifth position by foreign investments in Bulgaria with USD 507.6 million for the period 1992 – October 2003. . Greece, Germany, Italy and Belgium occupy the next positions. As of the first ten months of 2002 the investments of Austria were in amount of USD million. The highest level of the investments was reported during 2002 - USD 137.7 million. The Austrian capitals were invested mainly in bank services, trade, manufacture of hydraulic products, components for engines, etc. There is also interest in the ferrous metallurgy (permanent steel casting) and celluose-paper industry.
Source: Pari (02.03.2004)

Bulgaria’s state debt has grown with EUR 109.7 million in January, amounting to EUR 8.6 billion in the end of the month, Ministry of Finance announced. The total amount of the internal debt is EUR 1.2 billion, and of the foreign debt – EUR 7.4 billion. The increase is due to the new issues of state securities, sold on the domestic market, as well as to the changes in the US dollar rates, Ministry of Finance commented. Compared to January 2003, the debt is EUR 420.7 million smaller.
Source: Standart (04.03.2004)

Foreign investments in companies from the non-financial sector last year amounted to USD 331 million, NSI announced. In the last quarter of the year, the foreign companies exported more capitals than they imported in the country, which resulted in minus USD 66.7 million net investments over the period October – December. In 2002, the net foreign investment were in the amount of USD 244.8 million.
Source: Standart (04.03.2004)

The debts of Kremikovtzi JSC to the National Insurance Institute, which have been accumulated since 1999 are in the amount of BGN 62 million, Mr. Jordan Hristoskov, Director of NII, announced. He was heard by the temporary inquiry commission for Kremikovtzi at Parliament, chaired by the MRL deputy Mr. Ramadan Atalai. In June 2003, the company’s debts to NII were in the amount of BGN 69 million, but the plant managed to sink BGN 7 million of them.
Source: Pari (05.03.2004)

One of the biggest players on the copper and zinc market – the Belgium company Umicore, the biggest specialized producer of zinc articles in the world and owner of Pirdop-based copper-extraction plant, surprised the markets and registered bigger than the expected operative profit with about 50 per cent and forecasts better financial results for 2004. The profit of Umicore is USD 182 million or EUR 145.9 million at EUR 97.5 million for 2002. Recently the Belgium businessmen have retracted from its traditional business for extraction and processing of copper and zinc and pointed their activity to recycling of precious metals and manufacture of materials, used in the high-tech industry. The traditional business of Umicore gained from the higher copper and zinc prices and its contribution to the profit amounts to EUR 28.4 million. The net debts of the Belgium group as of the end of 2003 reduced to EUR 619 million. For a first time it registers results, using the accountant standard IFRS. In spite of the abrupt price rising of the copper, Umicore does not expect a restoration of the copper-extraction sector before 2005 because of the low fees for processing and refining, which continue to reduce. The copper-extraction plant in Pirdop exceeded in 2003 with 3 000 tons the planned anode production and extracted 213 000 tons.
Source: Pari (05.03.2004)

The World Bank is going to grant a USD 150 million loan to Bulgaria. PAL 2 will be granted by the end of the year, Deputy Prime Minister Ms. Lidia Shuleva announced after her meeting with Mr. Shigel Kaco – Vice President of World Bank for the region of Europe and Central Asia. World Bank’s Board of Directors is expected to approve the loan in June. Bulgaria will receive USD 120 million immediately, and the remaining USD 30 million will be granted after one of the big deals is finalized – for Bulgartabac, or for the electrical distribution companies, Ms. Shuleva said.
Source: Standart (08.03.2004)

Japanese Bank for International Cooperation is ready to extend USD 200 million for the construction of the Bulgarian section from Sofia-Nish highway. The bank has already granted USD 40 000 for the pre-project research of Kalotina-Sofia section. Turkish, Austrian and American companies take interest in the construction of the segment. Among them are the American Behtel and the Turkish ENKA, which were involved in such projects before.
Source: Monitor (08.03.2004)

Bulgarian companies will take part in tenders for export of goods, weapons and the building infrastructure facilities in Iraq to the total value of USD 18.5 billion, Deputy Prime Minister and Minister of Economy Ms. Lidia Shuleva announced upon her return from a visit in USA yesterday. The agreement was reached during a meeting between Minister Shuleva and Admiral Nesh – Administrator of the US Fund for Iraq. Bulgarian companies, however, are not big enough to take part as chief executors, therefore they should apply in tenders as subcontractors. US Government is going to grant USD 12.5 billion for supply of goods and USD 6 billion for infrastructure projects in Iraq, Ms. Shuleva added.
Source: Monitor (08.03.2004)

Post Privatization Control Agency (PPCA) has initiated a case against the owner of Kremikovtzi against unpaid investments and liquidated damages. The claim was submitted in Sofia City Court on January 19, 2004. According to the privatization contract, Daru metals had to invest USD 300 million by 2005. However, until now have been invested only USD 50 million. The owner of the metallurgic company executed the engagement for investments only for 2000. For 2000 the non-execution of the engagements is BGN 10 million, for which in favour of the State is spent a bank guarantee of BGN 5 million. In 2001 was found out that were not realized BGN 46,65 million of the promised investments. The liquidated damages amounted to BGN 23 304, which however were not paid and the agency initiated a case. The analysis for 2002 is not still ready since from the metallurgic were not presented the necessary documents. The agency has the right to calculate liquidated damages for a whole non-execution of the engagements on the contract if this goes on. The metallurgic plant has debts to suppliers and other creditors. The debts to the National Social Security Institute are BGN 62 million. The Director of the Institute Mr. Jordan Hristoskov stated that if Kremikovtzi did not pay the debts soon, he would authorize State Receivables Collection Agency to gather its debts. By the end of the month the Parliament Commission will be ready with a statement on Kremikovtzi case. There were not any comments from the plant.
Source: Sega (08.03.2004)

Abrupt booms and slumps characterized the market of the non-ferrous metals during the last week. On Tuesday the copper exceeded the extremely important psychological limit of USD 3000 per ton, which was the highest amount for 8 years and a half. The prices of all others metals from the group followed the trend. Copper is supported by the permanently declining inventories – a trend, which will be kept in the future, according to the analyzators. Since May 2002, when reached a peak of about 1 million tons at LME, the inventories of the red metal have reduced with 70 per cent as of this moment. The experts think that as of the middle of this year they would reach a critically low level.
Source: Capital (08.03.2004)

Commonwealth Bank of Australia /CBA/ forecasts that there would be a deficit of about 70 000 tons on the world zinc market during this year. The deficit will be caused by the expected increase of the global demand of the metal for a third consecutive year with 4 per cent and the long period of inventories’ accumulation. During last year the deficit on the market was about 130 000 tons. The average quotes during 2004 of the three-month futures will be 1075 USD/t and 1000 USD/t for the next year. Yesterday on LME the metal quoted at 1116 USD/t. The relatively higher inventories will restrict the opportunities for higher zinc quotes over these levels, according to CBA.
Source: Pari (09.03.2004)

The prices of the non-ferrous metals on LME were moving in a declining direction yesterday, defined by the nervous traders who waited for the market factors to make the metals more expensive. However, on account for this, the funds started selling, which reduced the prices. The three-month copper deliveries became cheaper with 38 USD/t in comparison with Friday to 2890 USD/t. Aluminum retracted with 7 USD/t to 1675 USD/t and nickel with 100 USD/t and quoted at 13 250 USD/t. Lead was the sole exception and its price rose with 3 USD/t, setting at 868 USD/t.
Source: Pari (09.03.2004)

The consumption of stainless steel will increase at the same time with the boom of economy in a global scale but more significant increase has to be expected in the next year, according to one of the leading world producers of the raw-material, the Finnish Outokumpu. In 2003 it extracted 1.9 million tons stainless steel or 8 per cent of the world production.
Source: Pari (09.03.2004)

The biggest copper-extraction company in the world, state-owned Chili Codelco, revised the forecasts for average quotes of the metal during the year up to over 1 USD/lb at former 0.95 USD/lb. At the same time Codelco plans to reduce the production over this year with 7 per cent to 1.75 million tons.
Source: Pari (09.03.2004)

The biggest in Europe steel-extraction union Arcelor and the biggest steel-extraction companies of China Baosteel and of Japan Nipon steel will create in 2005 a joint company that will satisfy at least half of the demand of list steel for the fast-developing automobile industry in China.
Source: Kremikovski metalurg (10.03.2004)

Hungary signed the deal for sale of its biggest steel-extraction company Dunafer to Ukrainian-Swiss group Duferko. The price of the whole deal will be HUF 100 billion.
Source: Kremikovski metalurg (10.03.2004)

The world copper production in 2003 reduced and the deficit of this metal was 351 000 tons, was reported from the World Metal Statistical Bureau.
Source: Kremikovski metalurg (10.03.2004)

The second by size steel-extraction company in the world LNM has the biggest chances to buy the Polish metallurgic plant Huta Chenstohova and Bosnian company ÂÍ steel. LNM continues its expansion in Eastern Europe, where the company has already acquired the biggest companies of the ferrous industry in Poland, Czech and Romania. The other candidate for Huta Chenstohova was Donbas. LNM has already exceeded its major competitor in Eastern Europe – the American company United States steel.
Source: Kremikovski metalurg (10.03.2004)

How did Minister Tzerovski manage to take the right economic decision to break the contracts with three private water unions that took off funds from the state-owned water and sewerage companies. He also has the idea the State to remit not more than BGN 10 million debts to three water and sewerage companies in Dobrich, Haskovo and Kuystendil, in order not to bankrupt and to stabilize. In 1999 the State – presented by the Government of United Democratic Forces wrote off over 650 billion non-denominated levs of state-owned companies to state-owned companies and the treasury. Over the half of this amount was given to Kremikovtzi, in order to be sold for USD 1. Nowadays Brussels is not quite pleased with the good will of the State, which could sink our quote for export of steel in EU in the near future. And in spite of the creative decision, Kremikovtzi’s state is not quite good.
Source: Trud (10.03.2004)

Bulgaria’s net sales incomes in January 2004 were 17.8 per cent lower than in December 2003, NSI announced. This, according to the analysts, is a normal and traditional drop after the Holiday season. The lower sales income are also a result of the drop in all main activities, which varies from 24.9 per cent in retail and repair of personal and household goods to 16.1 per cent in wholesale. At the same time, the net incomes from sales of products, goods and services from the group “Trade, repair and technical maintenance of cars, motorcycles, personal belongings and household goods” have jumped with 14.1 per cent from January 2003.
Source: Dnevnik (12.03.2004)

The regional Environment and Wates Inspectorate – Varna, approved the investment proposal of Batova River Manganese Mine to build a research gallery in a new section of the manganese deposit near the village of Obrochishte. The British-Bulgarian company will not be able to make industrial extraction in the selected section, but will only use it for research activities.
Source: Pari (12.03.2004)

One of the furnaces of the plant for brake equipments in Chugunoleene invest 97 in Purvomai was completely destroyed after an explosion of the melting in it metal. The accident took place at about 13 o’clock, was reported from police department. There were not any wounded people at the break-down but the production process is ceased. Six years ago the plant was in the system of Bulgarian State Railroad (BDZ). At the moment BDZ continues to be its biggest client.
Source: Monitor (13.03.2004)

Bulgaria has exported raw tobacco for about USD 51.3 million during the last 3 years, according to data of the International trade centre in Geneva. In 2003 the export of Bulgartabac amounted to about USD 31,8 million or 9 878 tons, was reported from the holding. The rest part of the export was realized by other 4-5 foreign or native companies, among them are Sokotab, Diamond and Niki-BT. The export of tobacco takes 8th place in the structure of Bulgarian export, while in the world rang list it is with two positions ahead.
Source: Monitor (13.03.2004)

Bulgaria signed a contract for participation in a joint venture with Turkey, Hungary, Romania and Austria, which will build a gas-main , connecting the Caspian Sea with Central Europe, Italy’s ANSA agency announced. The project is expected to cost some EUR 4.4 billion. The gas-main will be called Nabuko. In the beginning, the international company Nabuko Company Pipeline Studi will be responsible for creating a financing model, and the organization’s activities will be coordinated by the central office in Viean, ANSA announced.
Source: Monitor (15.03.2004)

Serbian traders are convincing again the Government to cancel the export fees for scrap, insisting that they favoured only the factory in Smederevo /the former Sartid/, property of US Steel since April. The fees were introduced, in order to be prevented the non-controlled export of metal scrap and to be supported the local steel producers. However, according to the traders, US Steel buys from them the scrap at lower with EUR 50 than the prices on the world market and according to their evaluations over 50 per cent of the scrap in the country go to Smederevo. From January to November, 2003 Serbia exported scrap in amount of USD 20.8 million or with 92 per cent more in comparison with the same period of the former year. US Steel plans to increase the production in Smederevo up to 2.2 million tons per year by 2006 at 500 000 tons for 2003. Some time ago the Government announced that the fee was introduced in order to protect the steel plant Niksic in Montenegro that will be privatized during this year.
Source: Pari (15.03.2004)

The three-month copper deals in London dealt on Friday in the end of trade at 2864 USD/t compared to 2902 USD/t the previous day because of the increasing production in China and India. Aluminum became cheaper with 23 USD/t to 1663 USD/t and zinc - with 12 USD/t to 1111 USD/t. Lead retracted with 2 USD/t.
Source: Pari (15.03.2004)

Selenium has been trading about the 21-year price peak of 13-16 USD/lb. The rising is a result of the massive Chinese demand, which increased the prices up to the current levels of 4 USD/lb in the summer of 2003.
Source: Pari (15.03.2004)

Magnesium conquered the highest prices since October, 1997 when only during this month has added new 400 USD/t to its quotes because of the shrunk Chinese demand, reaching the levels of 2300-2500 USD/t.
Source: Pari (15.03.2004)

In 2004 the Chinese aluminum production will increase with 19 per cent and will amount to 6.6 million tons, forecasted Merrill Lynch.
Source: Pari (15.03.2004)

Normally high remained the non-ferrous metals’ prices on LME during the last week. Technical corrections pushed the copper’s quotes at about USD 2800 per ton – lower than the former week but still at high levels. Chinese purchases of aluminum averted the falling of copper under the mentioned rate and also influenced favorable on the zinc.
Source: Capital (15.03.2004)

600 000 Bulgarian citizens, owners of investment bonds with total face value of about BGN 105 million, can take part in the fourth Centralized public tender. The tender started on the stock exchange on March 1 and will continue by March 18. From the offered 348 companies with minority state-owned stake, 310 have already been offered for buying out through investment bonds and compensatory vouchers but there was not any investors’ interest in them. For the new 38 companies, which are offered on the tender by PA, are also defined minimum selling prices. Only stakes against real money are being offered. Among the offered stakes, more explicit are those of Beli breg mine with 30 per cent, Kremikovtzi with 24,99 per cent, Corecom Princess with 23,571 per cent, Chimsnab – Sofia with 21,697 per cent, Chukurovo mine with 20 per cent, Burgas shipyard with 18,894 per cent, Minstroy holding with 7,298 per cent, Bolyarka with 1,193 per cent, Velikoturnovsko pivo with 0,437 per cent from the capital and others.
Source: Monitor (15.03.2004)

This year EBRD’s investments in Bulgaria are expected to reach and even exceed EUR 1 billion, Mr. John Chomel-Doe, Director of EBRD for Bulgaria, announced. Bulgaria is one of the positive examples of the successful work of the institution, the bank directors commented after their meeting with President Georgi Parvanov. Mr. Parvanov stated EBRD’s new 2003-2005 strategy is focused on priorities of major significance to Bulgaria – tourism, infrastructure, SMEs, economy decentralization, as well as co-financing in the assimilation of EU funds. So far, EBRD has invested EUR 850 million in a total of 46 projects in Bulgaria.
Source: Pari (16.03.2004)

10 companies owe a total of BGN 289.4 million to the state treasury, Mr. Ivan Nikolov – Director of the Sofia-based directorate of State Receivables Collection Agency, announced. Some of the big debtors are Kremikovtzi, the Christian-radical party, and Balkan air company. Many of the companies, which have debts, have no property whatsoever to be sold out. Some of them were created especially for VAT draining, therefore the establishment of a financial investigation service is urgently necessary, Mr. Nikolov said.
Source: Standart (16.03.2004)

The balance of the foreign trade /export FOB - import FOB/ for January, this year is BGN 302.2 million or USD 191.9 million, was reported from NSI. The export is BGN 978.7 million /USD 620.5 million/, which is a reduction with about 6 per cent in comparison with the same month of 2003. The import /CIF/ is BGN 1.385 billion, which is an increase of 9 per cent. The import /FOB/ is BGN 1.280 billion. European Union again is the biggest trade partner of Bulgaria. Our biggest trade exchange is with Italy, Germany, Greece. The export to Russia reduced with 20 per cent.
Source: Pari (16.03.2004)

The continuing steel’s price rising caused a discontent in Russia and USA and any of the US companies even initiated cases against its suppliers in order to compel them not to increase the prices. The steel’s price has been increasing for 2 years now on the world market. The analyzators explain the trend with the cycling prices’ movement, typical for the branch. Some of them forecast they will reach its peak in the end of May and after that they may reduce. Gasprom also expressed its discontent and demanded from the Government to introduce 30-per cent export steel fee and in this way to be stimulated the metallurgists to increase the deliveries on the domestic market and to lower the prices. The consumers of metal rolled iron also suffered from the high quotes. They consider that the prices of hot-rolled lists will increase in April up to 500-600 USD/t compared to 330 USD/t in the beginning of 2004. The prices of armature rods during next month will reach 400 USD/t in comparison with 320 USD/t in December.
Source: Pari (16.03.2004)

The three-month copper deliveries continued to become expensive, reaching 2925 USD/t, where met the defense levels. Experts expect in the next days the metal to become expensive up to 2975 USD/t, coming closer to the 8.5-year record of 3055 USD/t from February. Nickel retracted with more 680 USD/t to 12 220 USD/t and lead became expensive with 11 USD/t to 861 USD/t. Zinc set at 1127 USD/t, with 16 USD/t higher in comparison with Friday.
Source: Pari (16.03.2004)

The biggest steel-extraction company Arcelor plans to increase with several per cents the prices during the third quarter after the former rising in the second quarter. The profit of Arcelor for 2003 jumped up to EUR 2.23 billion at EUR 1.98 billion for 2002.
Source: Pari (16.03.2004)

The syndical organizations of KNSB in Kremikovtzi JSC and the Executive Director of the company Mr. Valentin Zahariev signed an agreement after negotiations on the Arrangement of collective labour contracts act. The agreement includes all strike demands of the professional unions and forecasts final payment of the delayed working salaries within April 30, 2004 and also improvement of the labour conditions in the company.
Source: BTA (17.03.2004)

Gross Domestic Debt is EUR 10,545 billion in the end of January. It is higher with EUR 124,2 million in comparison with the end of 2003, was reported from BNB. The public debt in the end of January is EUR 7,246 billion and the increase is with EUR 81,3 million more, compared to the end of 2003. In January were paid EUR 180.2 million for the service of the public sector’s debt.
Source: Standart (17.03.2004)

The second by size American steel-extraction company International Steel Group /ISG/ may become owner of several assets in Eastern Europe, among which Russian ones, when Russian metallurgy is one of the attractive for the foreign investments, Bloomberg announced. One of the current priorities of ISG is to enlarge its markets of realization and presence in China and Brazil. According to Russian analyzators from the branch, the American giant will most probably take interest in Severstal and NLMK. ISG was established in 2002 on the base of LTV Corp, which after that took over Acme Metals è Bethlehem and at the moment is acquiring Weirton Steel. If the last deal is approved, the production capacities of ISG will jump with 3 million up to 21 million tons steel per year. During the past 2 years the steel quotes were higher at the international markets and this is one of the reasons for execution of many deals connected with mergers or takeovers between players in the branch.
Source: Pari (17.03.2004)

More and more the copper is reaching the price levels of 3000 USD/t when during last month reached 8.5-year maximum of 3055 USD/t. Yesterday it became more expensive with 47 USD/t in comparison with Monday and traded at 2977 USD/t. The main market factors for the metal remain stable, including the reducing inventories. In spite of this, the prices remain vulnerable for a short-term declining trend. Aluminum is near the limit of 1700 USD/t. The tin has marked the highest prices for 8.5 years now - 7325 USD/t.
Source: Pari (17.03.2004)

The new golden extraction company, which was established by the world leader in the extractions of nickel and palladium – Norilski nikel, may pretend for a place among the biggest in the world. This will happen after the consolidation of the old "golden" assets of Norilski nikel, the spending of Natalkinsko field and probably of Suhoi Log. According to data from the end of 2003, the share of Polus, which was acquired by the plant in 2002, is 15-20 per cent of the total extractions of golden in Russia. Polus is also developing one of the richest in the country fields – Olimpiadinsko, whose inventories are evaluated at 700 tons. The Management of Norilski reveals that its plans are to gain the license for development of the biggest golden field in Evrasia – Suhoi Log with confirmed inventories of 1029 tons. The competition is about to be announced during the second or third quarter of the year. On the other hand, the filed of Natalkinsko may prove even richer than Suhoi Log – the inventories may reach 1500 tons gold. In the future the plant can rely on 40 per cent of the golden extractions in Russia.
Source: Pari (17.03.2004)

The biggest processor of aluminum in Russia RusAL plans to re-allocate its activity to the manufacture of aluminum alloys with high rate of added value for the aviation and packing industry. The giant produced 2.6 million tons aluminum in 2003 and contents 70 per cent of the demand in the country and 10 per cent of the world consumption. The plant is possessed by Mr. Oleg Deripaska with 75 per cent and Mr. Roman Abramovich with 25 per cent. The products with high rate of added value have to increase up to 50 per cent of the total volume of RusAL at 33 for 2004.
Source: Pari (17.03.2004)

The zinc plant in Cheliabinsk will reduce the extractions with 27 000 tons during this year to 150 000 tons. This measure is taken because of the increasing competition at the market and the high production costs.
Source: Pari (17.03.2004)

The copper that has reached during this month its highest prices for 8.5 years now /3055 USD/t/, will maybe start becoming cheaper. The abrupt movement of the copper quotes most probably enters the final stage with a peak during the next 2 months. Since the beginning of 2004 the price of the copper has increased with the remarkable 30 per cent. According to the Director of one of the biggest copper-extraction companies in the world - Rio Tinto, it could rise its price a little more in a short-term prospective but there is not any chance for the obtained rates to be kept for real. Meanwhile the biggest producer of copper in the world – Chili, has already generated benefits of the more expensive metal. The treasury gathered in February record incomes from export of copper in the history of Chili or USD 865.5 million for a month. This year Chili intends to extract 5.504 million tons of the red metal, which is with 11 per cent more than the former year.
Source: Pari (18.03.2004)

The tin reached a 15-year price maximum on LME under the influence of the shrunk market deliveries and the big demand, mainly from China. The three-month deals with tin were concluded at 7675 USD/t, with about 30 USD/t more than Tuesday. Since the beginning of the year the price of metal has grown with over 1500 USD/t due to the solid market factors. The copper was wandering about the level of 3000 USD/t, without reaching it. Nickel was traded at 14 025 USD/t and aluminum retracted with 11 USD/t to 1684 USD/t.
Source: Pari (18.03.2004)

The Russian Mr. Oleg Deripaska has already held a share in the third by size European steel producer – British-Dutch company Corus. He also holds 75 per cent of the second by size processor of aluminum in the world RusAL. According to Financial Times, Mr. Deripaska acquired not less than 3 per cent in Corus. It is expected Corus to register losses for a third consecutive year.
Source: Pari (18.03.2004)

The biggest copper-extraction company in the world – Chili-based company Codelco registered an increase of 64 per cent of the gross profit for 2003 up to USD 606 million. The state-owned company that provides about 15 per cent of the global production on the market, registered incomes of USD 3.8 billion, with 8 per cent more in comparison with the former year.
Source: Pari (18.03.2004)

The rising prices of the copper and the expected deficit of it stimulated the biggest producers in the world to expand the manufacture of this metal during this year. The extractions in Chili are expected to reach 5.49 million tons, mostly through enlargement of the mines Escondida, Codelco and Kolahuasi. The export will be directed mainly to China. It is expected the profit from the copper export to exceed USD 10 billion, which will be 43 per cent over the level in 2003.
Source: Kremikovski metalurg (18.03.2004)

The big Russian producer Norilski nikel intends to launch on the market bonds for more than USD 1 billion. The bank-industrial group Interros that controls Norilski nikel did not make any comment. During the last year the plant sold 60 00 tons of the metal and this was the reason the export of nickel from Russia to fall with 45 000 tons.
Source: Kremikovski metalurg (18.03.2004)

The aluminum inventories in the western countries have increased up to 2.97 million tons and its monthly extraction in the world reached 61 400 tons per day. In spite of this, aluminum has traded at the highest prices for 7 years – USD 1770 per ton. Brazil is going to increase its production up to 1.45 million tons during 2004. There are 10 plants for extraction of aluminum in this country. In the middle of this year the Dutch company Fondel is going to start the construction of a new plant in Azerbaijan for manufacture of 100 000 tons aluminum per year. It is near the plant in Sumgait, whose production will reach 75 000 in 2004. Last year Azerbaijan exported 18.6 thous. tons.
Source: Kremikovski metalurg (18.03.2004)

The insolvent Ecotechnologii Ltd. is looking for a buyer of its receivable from Kremikovtzi JSC, which is for BGN 300 000. The sale will be held on March 30, 2004. The receivable is in accordance with a contract from July 10, 2000 for delivery and sale of secondary ferrous metals and invoices on it. I expect bigger interest in the major installation, commented Mr. Ivo Velchevski, a syndic of Ecotechnologii. He will offer it for sale on March 29, this year. The machine will be sold together with a pipe and buildings. The total value of all assets is BGN 2.051 million. Ecotechnologii was established in 1992 for management of Kremikovtzi’s sole. The company was declared in insolvency in the end of 2002. Its shareholders are Kremikovtzi JSC with 40 per cent and Finmetals holding with 20 per cent, according to the company’s registers.
Source: Pari (19.03.2004)

A joint consultative council, which will inform the business about Bulgaria’s engagements in relation to its forthcoming EU accession, will be formed at the Ministry of Economy. 8 business organizations will be members of the council, including Bulgaria’s Employers’ Union, Business Club Vazrajdane, BIA, BCCI, The Association of the Industrial Capital in Bulgaria, BIBA.
Source: Pari (19.03.2004)

Kremikovtzi is the biggest debtor to the National Social Security Institute. The plant has debts of BGN 61 million. The debts to the Institute are totally BGN 416 million. BGN 280 million from them are the principal and the rest – interests, announced the Manager of the Institute Mr. Jordan Hristozkov. At the second place is Stomana-Pernik. The company owes BGN 22 million. In order to be paid the debts, the company will sell its real estates but hardly buyers are found. About 2/3 of the debts to the National Social Security Institute (NSSI) are gathered by the State Receivables Collection Agency (SRCA). During 2003 NSSI gathered BGN 95 million from its old debtors, while SRCA - a little over BGN 30 million.
Source: Standart (22.03.2004)

The average salary in Bulgaria is the lowest among all European countries, according to a publication in the Salzburg Nachricthen. Bulgarian citizens are paid an average of EUR 1.35 per hour, while those in Romania – EUR 1.51. EU’s expansion with another 10 members in May will result in large differences between the labour expenditures in the different members of the Union. While in Sweden, one hour of work in the industrial and service sector is evaluated at Euro 28.56, in Latvia this sum is EUR 2.42. As a whole, after the EU expansion, the average expenses for an hour of work will drop from EUR 22.21 to EUR 19.09.
Source: Standart (22.03.2004)

Tin registered a 14-year maximum after the traders realized exchange purchases and this brought to reduced inventories. After the tin was the copper that madly attacked the level of USD 3000 per ton but not successfully for now. The inventories of this metal are also quickly shrinking and some producers forecast the prices to head to the level of USD 4000 per ton if the demand from China keeps the current volumes and move.
Source: Capital (22.03.2004)

The committee of the constant representatives of the 15 EU member states in Brussels has approved the financial framework for Bulgaria and Romania, suggested by the European Commission in the end of last week, Minister of Finance Mr. Milen Velchev announced. Minister Velchev said he expected the final parameters of the financial framework would be confirmed during the High-level European Council on March 25 and March 26. Last week Mr. Gunter Verheugen - Commissioner responsible for Enlargement of the European Union expressed doubts as to whether the negotiations over Bulgaria’s budget framework would be completed by the end of the summer, since the member states had not as yet given their opinion about the new budget of the Union for the period 2007 – 2013.
Source: Pari (23.03.2004)

The Bulgarian-British company Batova River Manganese Mine is planning to invest at least USD 3 million more in the research of the manganese deposit near the Balchik-region village of Obrochitshte, the company’s procurator Ms. Rumyana Mladenova announced, adding the funds would be invested in the operation of the new platform the company intends to work up. Batova River Manganese Mine has stated its intention to invest some BGN 18 million in the production of manganese and to create 150 permanent jobs. Besides, the company intends to build a plant for processing of manganese ore into metal concentrate.
Source: Dnevnik (23.03.2004)

The export of aluminum from Russia during January sharply increased because of the higher import from countries that will be associated to EU on May 1 and will enter a regime with higher import duties. After this date the duties for countries, not members of EU, will increase up to 6 per cent and they want to accumulate some inventories, in order to continue the manufacture of semi-ready products for export to other countries from EU. The inventories of prime aluminum, which the countries from Eastern Europe want to provide, are evaluated at about 200 000 tons, 10 per cent of which for Hungary and the bigger part – for Poland. Regarding the increasing demand, Iran envisages an increase with 40 per cent of the manufacture of aluminum up to 250 000 tons per year, from which over 20 per cent for export – mainly for big consumers like China and India. The quotes of aluminum on the world commodity exchanges continue to grow up to levels, unseen during the last 10 years, stimulated by the quick development of the manufacture in China.
Source: Pari (23.03.2004)

International Aluminum Institute /IAI/ valued the daily extraction of prime aluminum in the world at 61 900 t compared to 61 800 t during January, this year and 59 600 t in February, 2003. The total extraction of aluminum in the world for February 2004 is estimated at 1.795 million tons - 1.669 million tons for February 2003 and 1.915 million tons in January, 2004.
Source: Pari (23.03.2004)

The price of copper on LME remained over 3000 USD/t in London – about the 8.5-year peak of USD 3055. Within several days the brokers expect to be broken the levels of 3150-3200 USD/t. The 3-month futures became more expensive with USD 10 up to 3014-19 USD/t. The price of tin again grew higher and reached 7950-8000 USD/t, aiming at the level of 8520 USD/t since October 1989. With USD 200 jumped the nickel – up to 14 350 USD/t. Aluminum added USD 2 USD to 1680/683 USD/t. Zinc became more expensive with USD 3 up to USD 1150. The lead fell with USD 3 to 876 USD/t.
Source: Pari (23.03.2004)

The French company for aluminum Pechine registered a loss for 2003, higher with EUR 442 million than in 2002. This is explained with the more expensive European currency and raw-materials. In 2003 Pechine was taken over by the Canadian Alcan, which is second by size world company for extraction of aluminum.
Source: Kremikovski metalurg (24.03.2004)

An exhibition of steel pipes and wire will be held on the territory of Duesseldorf fair in Germany from March 29 to April 2. The town will be also a host of the International European Steel Forum, organized on April 6 and 7 by Steel times international magazine.
Source: Kremikovski metalurg (24.03.2004)

The quotations of copper have grown with about 30 per cent as of the beginning of the year. During the first days of March the red metal reached for a short period the highest level as of the last 8.5 years – USD 3020. Afterwards the price dropped to 2885 USD/ton. The biggest copper company in the world - the Chilean Kodelko intends to increase its production with 10 per cent up to 385 600 tons. Another big company – the Belgian Umicore, owner of Umicore Med Pirdop, announced that 1/5 of its profit as of 2003 is due to the higher prices of copper and zinc.
Source: Kremikovski metalurg (24.03.2004)

The second by size world producer of computers – the American company Hewlett-Packard announced that it would buy for EUR 340 million the consulting unit Triaton of the German steel-extraction group Thyssen-Krupp.
Source: Kremikovski metalurg (24.03.2004)

The bigger demand of coke colas by the steel-extraction and the reduced manufacture of this raw-material in Canada and China cooperated for the continuing prices’ rising of the colas that reached to USD 200 per ton during last year. This trend will go on, according to the second by size world producer of coke coals – Canadian company Fording, which only for one year realized a profit of 178 per cent. The transport freight per ton of coals from Australia to Europe reached 25 USD/t. Poland shrunk its export, not regarding the forthcoming coal crisis, Russia accumulates bigger quantities for domestic consumption and Czech rose as of January 1, 2004 the quote restrictions for import of coals from Poland and Ukraine. According to experts, the world trade with coals will increase from 550 million tons in 2002 to 730-750 million tons in 2020.
Source: Kremikovski metalurg (24.03.2004)

The second by size steel-extraction company in the world – LNM wants to provide access to the output raw-materials for its manufacture in a moment, when there is market deficit. For this purpose the company plans to take over ore and coal-extraction mines. The company is going to achieve its objective, although it provides over 50 per cent of the necessary ore for the annual steel production. The owner of the British giant – the businessman of Indian origin Mr. Lakmi Mital underlined that during the next 5-7 years the company must double the annual extractions up to 70-80 million tons. The iron ore’s prices increased quickly in 2003 on the background of the higher Chinese manufacture of steel. LNM invested USD 100 million in its plant in China and this is the first step to expansion in Asia – a region with quite good potential for growth. LNM enlarges its positions in Eastern Europe, where has already possessed plants in Romania, controls the biggest company in Poland and is owner of Ispat Nova Hut in Czech.
Source: Pari (24.03.2004)

The non-ferrous metals on LME had a hard day, in which endured a collapse in the prices after selling offs. The three-month copper deliveries became cheaper to 2936 USD/t at 2965 USD/t the former day. Aluminum retracted with 20 USD/t to 1646 USD/t, and nickel was with 50 USD/t cheaper and traded at 13 800 USD/t. The price of zinc reduced with 14 USD/t to 1118 USD/t and lead – with 27 USD/t to 830.
Source: Pari (24.03.2004)

The biggest producer of nickel and palladium in the wold – Norilski nikel can promote during this year on the market other 10 000 – 14 000 tons nickel from its inventories, regarding the expected deficit.
Source: Pari (24.03.2004)

The biggest diversified mine-extraction company in the world - BHP-Billiton is going to invest USD 1.4 billion, in order to increase its capacities for extraction of nickel with 50 per cent up 130 000 tons in 2007 and to turn into the third by size producer. The Russian Norilski and Canadian Inco will be the only bigger companies in the sector.
Source: Pari (24.03.2004)

The price of tin on London Metal Exchange exceeded the levels of 8000 USD/t, reflecting the main market and technical factors. The growth in consumption and the decline in inventories will lead to further growth of the quotations above the present peak of 8150-8200 USD/t. In the beginning of 2004 the tin was traded at a price of 6150 USD/t. The demand of electronics industry, which uses about 31 per cent of the metal, chemistry and production of tin-plate, which consume as it follows 29 per cent and 16 per cent, are in the basis of the price record. On the other hand the inventories on LME reached their lowest level as of June 2000. At the moment tin is approaching the levels of 10 428 USD/t, which have not been reached since June 1989.
Source: Pari (25.03.2004)

The prices of the three-month copper deals reached again 3000 USD/t. Copper became expensive with 35 USD/t. Aluminum is higher with 1 USD/t up to1645 USD/t and zinc with 10 USD/t up to 1117 USD/t. The price of lead increased with 17 USD/t up to 842 USD/t. Nickel reached 14 135 USD/t, which is more with 135 USD/t.
Source: Pari (25.03.2004)

The Australian concern Rio Tinto, second in the world by manufacture of iron ore, fourth by copper production, fifth by gold extractions, fourth by extractions of copper and coals and seventh by aluminum production, will extract gold and diamonds in Russia. The concern will cooperate with Peter Hambro Mining.
Source: Pari (25.03.2004)

The biggest producer of copper in Europe - Norddeutsche Affinerie has registered a profit since February owing to the higher prices of the metal. According to the company, the copper market enters a new cycle and the prices will stabilize at the high levels. The demand from Asia is the biggest, was reported from Norddeutsche.
Source: Pari (25.03.2004)

As it seems Bulgaria is going to follow Czech, Poland and Hungary. During the last several years these three countries were in the focus of the world investors. However, nowadays, the attention is attracted to Bulgaria, Romania and Slovenia, the increased amount of the foreign investments in 2003 is a fact. According to preliminary data, they are in amount of USD 1,360 billion – a record for the last 11 years. It is quite possible the investments in 2004 to reach USD 2 billion, forecasted the Director of Foreign Investments Agency Mr. Pavel Ezekiev. According to him, the reasons are different – many projects, which will be finalized during this year, our accession in NATO and the close membership in EU. One of the biggest investments is of the Greek group Viohalco that invested over USD 30 million in new steel-extraction capacities in Stomana industry. The other big investors in the State for 2003 are Miroglio, Nestle, Metro cash and carry Bulgaria, LUKoil Neftochim, Shell and OMV.
Source: Trud (25.03.2004)

The Government determined five employers organizations as representative on a national leve. They are Bulgarian Employers Union, Black Sea Chamber of Industry and Commerce, Bulgarian Industrial Association, Union of Private Undertakers Vazrajdane and the Economic Initiative Union. All five organizations have at least 500 members, each of them has at least 20 employees, therefore they met the standards for national representatives.
Source: Pari (26.03.2004)

The Parliament prolonged with a month the deadline of the temporary commission for inspection of the safety and health labour conditions in Kremikovtzi JSC. Additional researches are necessary.
Source: Pari (26.03.2004)

The employers will pay interest on delayed over 3 months salaries and it will be considerable higher than the penalty interest rate. This amendment will become efficient with the changes in the Labour code and if the offering is adopted at second reading of the draft bill in the next week. The interest rate will be the Basic Interest Rate (BIR) plus 20 per cent. The penalty interest is BIR plus 10 per cent. According to data of trade union KNSB, over BGN 130 million are the unpaid remunerations, many of which accumulated by Bulgarian State Railroad (BDZ), Terem, Stomana-Pernik and others.
Source: Sega (27.03.2004)

Stomana industry JSC, ownership of the Greek group Viohalco, will pay off one year and a half before the deadline the amount for the self-contained part Steel-extraction of Stomana JSC. In 1999 Stomana JSC-Pernik was declared in insolvency and in the summer of 2001 sold to Stomana industry JSC its main production – Steel-extraction for USD 13.5 million without VAT added and the amount must be paid for 5 years at three-month installments. Stomana industry JSC took the engagement to invest in the object USD 34 million for 5 years. The effective investments, made by Stomana industry JSC for less than 3 years are USD 40 887 831. In 2003 ended the first part of the company’s investment programme for totally EUR 60 million. The official sign of the agreement between Stomana JSC and the company of the Greek Viohalco will be on March 30.
Source: Pari (29.03.2004)

There is a growth of 30 per cent in the Bulgarian export for Austria. The value of the export is EUR 160 million, announced the Federal Minister of Agriculture, Forestry, Environment and Waters Mr. Josef Priol. The Austrian import in Bulgaria is in amount of EUR 300 million, which is a growth of 11 per cent as compared to 2002.The value of the Austrian investments in Bulgaria during the last 10 years was of EUR 430 million. They were made mostly in the sectors of insurance, bank system, trade. The finalization of the construction of HPS Tzankov kamak is one of the biggest investments.
Source: Pari (29.03.2004)

The steel prices jumped because of the higher demand in China and will continue to rise in the near future. The third by size steel-extraction company Corus rose the prices with 20 per cent, saying that would review them every month. During the past years the company has registered losses and emphasizes that the quick economic development of China led to unprecedented increase of the steel demand. In 2003 Corus produced 19 million tons and confirmed that the scrap, used at the manufacture of new steel, became expensive in the last months with 40 per cent, iron ore - with 20 per cent and nickel - with 100 per cent. The expensive steel is a hit on the automobile industry, in which is exploding quite aggressive competition. Last week British-Dutch Corus announced that its losses for 2003 reduced with GBP 200 million up to GBP 66 million. The prices’ increase appears in a moment, when the second biggest shareholder is trying to be more active. The Russian producer of metals Mr. Alisher Usmanov increased his stake in Corus with 1 per cent up to 12 per cent. Recently he has required a membership in the Board of Directors and now expects to set contacts with its Russian companies, one of which extracts iron ore.
Source: Pari (29.03.2004)

Copper became more expensive with about 50 USD/t up to 2958 USD/t on Friday and led the rest non-ferrous metals. They have recently registered a series of multi year records and now, as it seems, are ready to accumulated new profits. Aluminum became expensive with 20 USD/t up to 1679 USD/t and nickel – with 375 USD/t up to 14 200 USD/t. Zinc added new 10 USD/t to the quotes and reached 1101 USD/t. Lead added 7 USD/t up to 817 USD/t. Tin was the only exception from the market trend. It became cheaper with 60 USD/t.
Source: Pari (29.03.2004)

Norilski nikel increased the sales of nickel and copper in 2003 and the sales of gold reduced. The quantities are: 308 000 tons nickel, 467 000 tons copper and 50 tons gold. The Russian giant also sold all volumes of palladium that produced in 2003. It is a world leader in the extractions of nickel and palladium.
Source: Pari (29.03.2004)

Top producer of iron ore in the world – the Brazilian CVRD, intends to increase the manufacture with 54 per cent up to 286 million tons per year for 2 years through investment of USD 1 billion in the capacities’ enlargement.
Source: Pari (29.03.2004)

Peru, N 5 by extractions of copper in the world, expects to increase the manufacture during this year with 5 per cent up to 881.1 thous. tons.
Source: Pari (29.03.2004)

The metallurgic company Stomana JSC, which is insolvent, will be able to pay the debts to its creditors before the term set. The reason is that Stomana industry, which purchased the extraction manufacture of the company in 2001, paid with one year and a half earlier the funds on the deal. Stomana Industry invested USD 40,9 million in renew of the capacities. This is with USD 7 million more than the set in the contract with PA. During 2003 in the company was launched in exploitation a new line for permanent casting.
Source: Trud (29.03.2004)

Mr. Lilian Vachkov is former Director of the metallurgic plant Kremikovtzi. At the moment is attracted as an expert in the Parliament Commission, which inspects the plant’s state after the tragic accident that has recently happened, when died 4 people. He left the plant in the end of 1996. - Mr. Vachkov, what is Parliament Commission Kremikovtzi doing at the moment? What is the situation after the tragic accident? - It is not quite clear what is happening in Kramikovtzi. According to the plant’s management, everything is ok. There are some optimistic forecasts because the plant manufactures and sells products. - So, the scandals with the unpaid salaries have ended? - I’ve been in the metallurgy for 40 years now but I did not remember such a boom of the prices in the sector. It is strange that the plant is selling and there is no money. The inspections reveal that there are not funds for labour security, the salaries and insurances are not paid. - In June expires the 5-year privatization deadline, what’s next? - We can observe two kinds of privatization in the metallurgy: successful, in Stomana-Pernik, where the Greek owners realize their engagements, the salaries are over BGN 400 - 500. The second one is not successful, which is Kremikovtzi case. In 1999 the management of the plant announced that if it was not sold, it would have bankrupted. On June 16 Daru metals bought the plant for USD 1 and promised to pay all debts and to bring fresh USD 300 million investments for 5 years. In my opinion, now will be very hard to close Competition chapter in the negotiations with EU. - Because of Kremikovtzi? - Because of the governmental policy connected with the plant. Some time ago Metal bulletin, issued in London, warned that Bulgaria had subsided a private company, which is forbidden in EU as a disloyal competition. The State also granted to Kremikovtzi a loan of BGN 400 million at relieved regime. - Didn’t the Competition Protection Commission react? - The Commission reported that this is not allowed, except if it is not about closing of non-efficient capacities. Probably this will be our explanation before EU. At the moment is being prepared a reconstruction plant of Kremikovtzi. But how will be proved that were closed capacities for 500 000 tons metal per year? If they are closed so quickly, this means hundreds of dismissed workers. - But the things were getting better, were not they? - There is something very important, which is not mentioned. Kremikovtzi did not have any debts to NEC as of the day of privatization. On March 18, 2003 Post-privatization Control Agency found out that the debts to NEC were already BGN 65 million for 3 years. The situation with Bulgargas is the same – the accumulated debts reached BGN 44 million. The debts to the National Social Security Institute on February 26, 2003 were BGN 72 million. However, the State did not require from the plant these funds, amounting to BGN 1.4 billion. With such a privilege were not honoured either Stomana – Pernik or the plant in Debelt. - What’s the explanation? - I do not know. There is one more strange item in the privatization contract – the buyer is obliged to service the Austrian debt of USD 70 million, taken because of the machine for permanent steel overflow. However, the State did not define a creditor and there were not any payments. But there are calculated interests. - What is the major problem, according to you? - In the trade activity. This is the black box of Kremikovtzi. However, the Parliament Commission does not have access to there. There are rumours for the way of sale through offshore family companies. There are also doubts connected with the bankruptcy of the pipe rolling plant of Kremikovtzi because a competitor may be favoured from the free 180 000 tons. - Are there any guilty for the break-down in the plant? - There has already been prepared a report of the internal commission and the labour inspection. The break-down exploded at first furnace after many reconstructions. It proved to be that the gas-purifying equipment was repaired. There always has to be an alternative in the metallurgy if something does not work out. The water had to be started from the other water pipeline. - What are we going to expect after June 16? - There are two alternatives. After this date the owner is free to do anything with Kremikovtzi, even to cut the plant into scrap. If the State is reliable, it can terminate the contract and to declare the plant for sale. Buyers will be found.
Source: 24 chasa (29.03.2004)

Stomana industry is going to pay before the term set the price of the self-contained part Steel-extraction, was reported from the company. During 2001 Stomana JSC, in insolvency sold its major production for USD 13,5 million and the amount had to be paid for 5 years. However, the payment will be realized 1,5 years earlier.
Source: 24 chasa (29.03.2004)

Last night around 20:45 PM Prime Minister Simeon Sax Cobourg handed to US Secretary of State Collin Powell in Washington the ratification document for Bulgaria’s NATO accession. Thus, our country is already a full-right NATO member. The second official ceremony marking our entry into the organization will be held on April 2 in NATO’s headquarters in Brussels, where the flags of the new members will be officially hoisted in front of the building of the North Atlantic Treaty Organization.
Source: Pari (30.03.2004)

The Russian metal giant Norilski nikel bought 20 per cent of the fourth by size producer of gold in the world – the Southern African Gold Fields for USD 1.16 billion from the mine-extraction company Anglo American. It is quite possible the Russians to buy Gold Fields regularly. The company operates in Southern African Republic, Gana and Australia and its annual extractions are over 4.3 million tr. ounces with inventories of 81.5 million tr. ounces. The ambitious plans of Norilski to enlarge the golden extractions of 40 tons in 2003 up to 100 tons are an explicit signal for the global intentions that it has.
Source: Pari (30.03.2004)

The three-month copper deals on LME stabilized and traded at 2983 USD/t, which is with 27 USD/t over the closing on Friday. Aluminum became expensive with 6 USD/t up to 1684 USD/t, supported by the serious fall in the inventories on the exchange, which now are 1.3 million tons. Tin registered a new higher price and reached 8230 USD/t. Last week it marked a 14.5-year price record of 8400 USD/t.
Source: Pari (30.03.2004)

The price of the natural for each group of consumers may be different, states the project of a decree for regulation of the prices of natural gas, prepared by State Energetics Regulation Commission. The company, which supplies natural gas, will propose to the Commission for confirmation different groups of consumers. They may be distributed in accordance to the amount of the consumption or by other indicators. It is expected that the greatest consumers of natural gas will have the right to buy natural gas at preferential price. This will make more competitive the production of chemical factories like Agropolichim, Orgachim, Neochim, Polimeri, metallurgic plants Kremikovtzi and Stomana Industry, cement and glass factories and of the greatest consumers of natural gas – heat-supply companies.
Source: Pari (30.03.2004)

The drop in the price of natural gas with BGN 6.00 per 1000 cub.m. excluding VAT as of the beginning of April will have almost no effect on the activity of the big consumers of natural gas. On Monday State Energetics Regulation Commission decided that Bulgargaz should lower the prices with average 3 per cent to the level of BGN 213.09 per 100 cub m., excluding VAT. These are the utmost prices and Bulgargas and the gas-distribution companies may sell at these prices, announced the Chairman of the Regulatory Commission Mr. Konstantin Shushulov. Heat-supply companies occupy about 33 per cent of the market of natural market. Representatives of Stomana Industry commented that the company would not feel the drop in the price. During the last year metallurgy has consumed 418 million cub.m. natural gas. The decline in the price of the gas is due mainly to the drop in the exchange rate USD/BGN as of the beginning of the year and the reducing of the transit of natural gas for the neighbor countries with 180 million cub.m.
Source: Dnevnik (30.03.2004)

Stomana industry is paying before the dead line the price for the purchase of self-contained part Steel-extraction. The price of the deal was USD 13.5 million excluding VAT. The price had to be paid in a term of five years. The agreement for the preliminary payment of the self-contained part, which was purchased during 2001 will be signed between Stomana industry and Stomana this evening. According to this agreement Stomana Industry will pay the full amount of the price an year and a half before the deadline. Thus Stomana will be able to pay its debts and to satisfy the claims of former employees and the National Social Security Institute. It is expected that Deputy Prime Minister Ms. Lidia Shuleva, the Manager of NSSI Mr. Jordan Hristoskov, the Mayor of Pernik Municipality Ms. Antoaneta and the leaders of the national trade-unions will attend the signing of the agreement.
Source: Sega (30.03.2004)

Stomana industry and Stomana JSC will sign an agreement for payment before the term set of the purchased in 2001 major production (self-contained part Steel-extraction). In 1999 Stomana JSC was declared in insolvency and according to the reconstruction plan, in 2001 Stomana industry bought the major production of Pernik-based company for USD 13.5 million. The amount had to be paid for 5 years and for the same period Stomana industry had to invest USD 34 million in the purchased part. According to this agreement, Stomana industry will pay the whole price one year and a half earlier. In this way Stomana JSC is allowed to pay its debts to the creditors and to content the receivables of the company’s former employees and of the National Social Security Institute, said Mr. Anton Petrov, a representative of the Greek company Viohalco for Bulgaria, owner of Stomana industry. A commission, including representatives of the Post-privatization Control Agency and of the Ministry of Economy checked the realized investments. It was found out that the investments’ amount for 3 years is over USD 40 million. During last year in Stomana industry ended the first part of the investment programme in amount of EUR 60 million. One year ago in the company was launched in exploitation a new line for permanent casting Danieli for manufacture of blooms. First electric furnace was entirely reconstructed on a project of Weifuks, which increased its capacity from 70 to 100 tons per hour. In 2003 ended the reconstruction of the list-rolling mill. A programme for preservation of the environment also started. The programme costs EUR 13 million. The manufacture of steel in the company increased with over 50 per cent and from 450 000 tons in 2002 reached to 700 000 tons in 2003. About 95 per cent of the production of Stomana industry are for export but the company is trying to penetrate into the domestic market more effectively. For this purpose on the territory of Stomana industry was built one of the biggest warehouse for ferrous metals in Bulgaria. In April Stomana industry will launch in exploitation a shredding installation for cutting and separation of scrap. The equipment was delivered by the German company Lindeman. The installation can shred up to 200 tons scrap per hour and the initial investment for it is BGN 10 million. At the moment in Stomana industry are working 1600 people.
Source: Dnevnik (30.03.2004)

The Minister of Finance Mr. Milen Velchev and the General Director of Chief department EU Expansion Mr. Fabricio Barbaso signed financial memoranda on PHARE programme in the total amount of EUR 32.120 million. Two of them are by the initiative for transborder cooperation for 2003 – with Greece for EUR 20 million and with Romania for EUR 8 million. The first memorandum that Bulgaria signs by the initiative of PHARE Foreign frontiers 2003 is in amount of EUR 4.120. The co-finance on the projects with Bulgarian funds is EUR 14.365 million.
Source: Pari (31.03.2004)

Regional Investigation Services Office in Veliko Turnovo initiated a preliminary procedure for a criminal breach of trust against Mr. Staiko Grigorov, former Manager of the company for purchase and processing of non-ferrous metals Dervent JSC in the village of Samovodene. He sold a part of the company’s property the private Bras metal Ltd. because of which were caused considerable effects for Dervent. When in 1995 the profitable state-owned company was privatized, it started to transfer shares and property in parallel established private companies. In 2002 Dervent JSC became insolvent and Veliko Turnovo District Court opened a procedure of insolvency because of debts of BGN 2 million. On the property were imposed a distraint and prohibition. On May 29, 2003 the company’s activity was ceased and it was erased from the trade register.
Source: Pari (31.03.2004)

Third-sized American producer and the biggest public copper-extraction company in the world Phelps Dodge forecasts a deficit of 500 000 tons copper by the end of 2004 because of the big Chinese consumption and the improving world economy. The world exchange inventories of copper cathodes are now fluctuating at about 500 000 tons, which is one third of the peak 1.5 million tons in April 2002. Considerably reducing inventories of refined copper, the non-regular deliveries and the higher Chinese consumption earlier this year launched the copper quotes up to 8.5-year price record of 3055 USD/t. According to Phelps Dodge, the boom on the market is similar to the cycle in the end of 80’s, especially during the last quarter of 1987, when the prices reached 1.30 USD/lb. At the moment the copper futures beyond the ocean are traded at about 1.32 USD/lb. in comparison with 65 CTS/lb in the end of 2002. The copper-extraction giant forecasts average prices of the metal for the current year about and over 1.10 USD/lb. According to Chili – top producer in the world, they are going to be 1.20 USD/lb. China is heading the list of the countries with the biggest growth of the copper demand. In 2003 China consumed roughly 3 million tons. However, while in 2003 the country registered a demand’s growth of 20 per cent, for 2004 Phelps Dodge expects only 9 per cent. The company considers that the growth of the world consumption in the same year will be at least 4 per cent. Meanwhile one of the big copper producers – Zambia intends to increase the extraction over this year up to 382 000 tons at 350 000 tons for the former year.
Source: Pari (31.03.2004)

The market of non-ferrous metals was quite advanced yesterday, supported by strong major market factors and shrunk deliveries. Three-month copper deliveries passed the defence rates of 3000 USD/t. They grew up to 3002 USD/t in comparison with 2971 USD/t on Monday. Aluminum reached prices of 1692 USD/t, with 14 USD/t higher than the closing on the former day. The tin prices jumped up to 8420 USD/t compared to 8260 USD/t. Lead became expensive with 18 USD/t and was dealt at 838 USD/t and zinc quoted higher – at 1120 USD/t, although it did not take part in the trade. Nicke was cheaper with 190 USD/t to 13 900 USD/t.
Source: Pari (31.03.2004)

The Executive Director of the Polish group KGHM was dismissed one week after he required from the Government to reduce his 44-per cent control stake of shares. KGHM is sixth and second in the world by extractions respectively of copper and solver.
Source: Pari (31.03.2004)

Direct foreign investments in Bulgaria in January are USD 39,5 million, was reported from BNB. They are with USD 47 million less than the investments during the same month of 2003. Now Holland invested the biggest amount (66,2 per cent), USA (8,5 per cent) and Great Britain (3,4 per cent). The deficit in the foreign trade in January is EUR 154,5 million, which is with EUR 85,7 million higher in comparison with the same month of 2003.
Source: Standart (01.04.2004)

Stomana Industry is going to invest between EUR 30 and 40 million during the next 2 years in manufacture and equipment. Within several days will be launched the new installation for cutting and shredding of scrap, with which will be also processed old automobiles. The line is the most powerful on the Balkans and the investment in it amounts to BGN 10 million, announced the Chairman of the Board of Directors of Stomana Industry Mr. Atanas Atanosopulos. One day ago the company signed an agreement with Stomana JSC for earlier payment for the Steel-extraction unit. So far the company has invested in Stomana JSC USD 41 million. In this way Stomana Industry exceeded the investment of USD 34 million, which had to invest by 2005. Stomana JSC is expected to be closed in May 2005, said the Management of Stomana Industry. The Management envisages a restructure and separation of the productions, for example on transport and maintenance. During last year were introduced two new productions, which increased the steel extraction. Practically, the manufacture increased with over 50 per cent and from 450 000 tons in 2002 reached 700 000 tons for the last year. The Management said that the company is among the ten companies forming GDP. The export for 2003 amounts to EUR 153 million.
Source: Pari (01.04.2004)

Within a month Stomana industry is going to launch in exploitation the sole in Bulgaria installation for shredding and separation of scrap. The installation has capacity of 200 tons metal scrap per hour, said the representative of the greek company Viohalco for Bulgaria Mr. Anton Petrov. The Management of Stomana industry, whose major shareholder is Viohalco and the Board of Directors of Stomana signed an agreement for payment of the debts of the bankrupted Pernik-based company to the workers and National Social Security Institute (NSSI) for BGN 7 million. In the installation will be shredded old cars and white technics. We won’t receive funds from the State for this, specified Mr. Petrov. The owners of depots for old cars will remove from the cars the accumulators and the other dangerous materials and will transport them to Stomana. We will pay them for old iron and will provide raw-materials, added Mr. Petrov. The capacity of the line is quite big to service the whole State. The initial investment is BGN 10 million. Other BGN 50 million will be invested in the major production of Stomana industry.
Source: Sega (01.04.2004)

The warehouses of the biggest marketplace for non-ferrous metals in the world – London Metal Exchange become emptier every day. The inventories of metals are constantly decreasing as a result of the rapid growth in Chinese consumption. Thus running out of stock become one of the factors, which lead to the raising of the prices. Despite the fact that the leading producer of copper in the world – the Chilean company Codelco started to sell its inventories, accumulated during 2003, directly in China, there is insufficiency on the market yet. The inventories on LME are under the psychological level of 200 000 tons as compared to the maximum of 980 000 tons during May 2002. Copper recently reached its record price for the past 8.5 years – 3055 USD/t. The nickel inventories on LME dropped to 15 000 tons as compared to 24 400 tons a year ago. Therefore its price reached the record price of 17 100 USD/t for the last 14.5 years. During 2003 the deficit on the market was avoided only because the greatest nickel producer in the world - Norilski nikel launched on the market 60 000 tons of its inventories. The lead inventories of LME are 74 300 tons as compared to 182 600 tons. On the other hand the collapse of tin inventories – from 24 900 tons to the present level of 7 700 and the low production level explained the record prices during 1998.
Source: Pari (01.04.2004)

The Belgian private producer of copper Lamitref is in negotiations with German banks for the capital injection it needs for its stabilization. Last year there were rumours that the company will be taken over by the Belgian company Umicore - one of the leading producers of copper and zinc in Europe, but so far the deal was not negotiated
Source: Pari (01.04.2004)

Bulgaria is among the 55th countries that sets trade bars before the American exporters, according to the annually published report of the US Government. The objective of this report is to make easy the President administration in USA at the preparation of its strategy for negotiations in connection with the trade bars, which cause the biggest damages to the American companies. If the bilateral negotiations don’t make any result, the American administration may appeal the World Trade Organization /WTO/. The inclusion of Bulgaria in this list is strange but also annoying because our trade regime is liberal, comments Mr. Martin Dimitrov, expert in the Market Economy Institute. Most probably the report regards the corruption and any administrative bars that still exist, added he. For instance, such a bar may be the time for processing of shipments through the customs. Our duties are close to these of EU but we can not speak for impose of trade bars from Bulgarian side. The Government will have to require from USA the grounds our country to be included in this list. In 2002 USA increased the duties for import of steel and as a response EU also introduced duties. Some of the future members also introduced protective measures. However, Bulgaria rejected the demand of our metallurgic plants to introduce duties for import of steel, remind the experts. A group of senators-democrats sent a letter to the President of USA Mr. George Bush, in which appeal the administration to start negotiations with five major trade partners of the country ­ china, EU, Japan, India and Republic of Korea because of the problems such as the bars for the American cars and automobile parts in Japan and Southern Korea and the subsidies, granted by EU to constructor of aircrafts Airbus. Senators insist from the administration on submitting a complaint in WTO against the four countries, mentioned above and EU if the negotiations for liquidation of the trade restrictions do not give any results within 2 months. Bulgaria is also a member of WTO and after 2007 our country will be represented by EU.
Source: Monitor (03.04.2004)

Stomana Industry JSC is going to pay before the deadline the price of the self-contained part of Pernik-based plant Stomana, which it purchased during 2001. The price of the deal was BGN 16.1 million. The payment of the price in advance is a part of the agreement, which both companies signed on March 30. According to the contract for the purchase the price had to be paid in a term of 5 year by three-month installments. In accordance with the new agreement BGN 7.2 million will be paid a year and a half earlier. Thus Pernik-based company will be able stabilize its financial relations both with its employees and with the National Social Security Institute. Stomana JSC has debts in amount of BGN 22.5 million for social securities. Its accounts were distrained in the beginning of the year. So far Stomana Industry has invested USD 40.9 million in the modernization of Steel extraction section. During 2002 will be launched in exploitation an automated line for permanent casting and was finished the reconstruction of the list rolled iron and sort rolled iron workshops. During 2003 the production of steel reached 700 000 tons – with 250 000 tons more as compared to 2002. Pernik-based metallurgic plant was declared in procedure for insolvency during 1999. Two years later the court and the creditors adopted its reconstruction plan, which included sale of the main production. The Ministry of economy holds 75 per cent of the capital of Stomana. AKB corporation and Continental Holding own stakes of 10 per cent of the capital each. TK hold owns 1 per cent of the capital. The rest of the shares are distributed among a group of physical persons.
Source: Banker (03.04.2004)

The building of the hydro station Tzankov Kamak was determined by the authoritative British issue Euromoney as 2003’s best financially-structured project. The construction of the hydro power station and dam Tzankov Kamak started on March 25 2004 under a pilot project, approved on the basis of a memorandum for bilateral cooperation between Bulgaria and Austria from 2002. The investment is to the value of EUR 219 million
Source: Pari (05.04.2004)

Stomana industry JSC and Stomana JSC signed on March 30, 2004 an agreement for payment before the term set of the purchased in 2001 self–contained part Steel extraction. The document was signed by the representative of Viohalco JSC for Bulgaria and Executive Director of Steelmet JSC Mr. Anton Petrov, the Chairman of the Board of Directors of Stomana Industry JSC Mr. Atanasios Atanasopulos and Ms. Olga Shishkova – a Chairman of the Board of Directors of Stomana JSC. Practically, Stomana industry JSC is going to pay 1.5 years earlier the whole amount of the deal and in this way will enable Stomana JSC to pay the debts to the creditors more quickly and will also content the receivables of the former company’s employees and of the National Social Security Institute (NSSI). For this purpose between Stomana JSC and NSSI was concluded an agreement for payment of the debts and was defined a schedule for the incomes. In 1999 Stomana JSC was declared in insolvency and in accordance with a reconstruction plan during the summer of 2001 sold to Stomana Industry JSC its main production, the so called self-contained part Steel extraction for USD 13.5 million, without VAT added and the amount had to be paid for 5 years in three-month installments. Stomana Industry JSC was obliged to invest in the object USD 34 million for 5 years. The investments’ amount, effectively made by Stomana Industry JSC for less than 3 years are USD 40 887 831. This was found out by a special commission with representatives of the Post-privatization control agency and the Ministry of Finance. During 2003 were invested EUR 60 million for improvement the competitiveness of the manufacture. 80 per cent of the company’s production are exported to countries from Western and Eastern Europe, to USA and Canada, Egypt, China and others.
Source: Construction City (05.04.2004)

The expansion of Russian capitals abroad continued over the last week with the conclusion of a record and to some extent surprising deal. The biggest producer of palladium in the world Norilski nikel bought out from the international corporation Anglo American 20 per cent in the gold-extraction company Gold Fields, Southern Africa and took positions among the leading producers of gold in the world. The deal costs USD 1.16 billion (EUR 957.5 million) and is the biggest Russian investment abroad until now and even shaded the last year records – the acquisition of the American company for palladium Stillweater by Norilski in 2003 for about USD 300 million and the purchase of the steel-extraction company Rouge Industries from the Russian giant Severstal for USD 285 million. Russian press comments that the investment of Norilski, 60 per cent of which are property of Interros holding, is a continuation of a trend the oligarchs to acquire beneficial assets from the West when the petrol company LUKoil bought the chain of petrol stations of ConocoPhilips in USA for USD 265 million and during last year Mr. Roman Abramovich, major shareholder in other petrol company Sinneft, became owner of the English football team Chelsea for EUR 60 million.
Source: Capital (05.04.2004)

The news that the Belgium producer of metals Umicore has developed a new technology, allowing the use of palladium instead of platinum in the diesel auto catalizators, launched quickly the prices of palladium up to the record from October 2002 315 USD/tr. ounce. Umicore, N 1 in the world by extractions of specialized zinc articles and owner of the copper-extraction plant in Pirdop announced that owing to the new technology, 1/4 of the used in the existing systems platinum can be replaced with palladium. Thus, the price of a diesel automobile will drop with USD 20 and the producers will be able to select which one of the two metals to use. At the moment palladium is 3 times cheaper than platinum. The French company PSA Peugeot Citroen saluted the invention.
Source: Pari (05.04.2004)

The metallurgic company Stomana Industry in Pernik is among the top 10 companies that form GDP of the State. In 2003 were produced 700 000 tons steel, 90 per cent of the production are sold on the international markets. The export for 2003 is for EUR 153 million. For the high quality of its production, the company is certificated on ISO 9001:2000 and on Loyds register.
Source: 24 chasa (05.04.2004)

Pernik District Court canceled yesterday the case against the former Executive Director of Stomana JSC Mr. Valentin Bakalov and the Manager of Investments department Mr. Pencho Dimitrov. The meeting of the court was canceled because of illness of Mr. Bakalov. The former Directors of Stomana are accused by the Regional prosecutor’s office of a criminal breach of trust. According to the accusatory act for the period May 2001 – May 2002 they exceeded their rights, in order to gain profits for Pernik-based company Alpa-2000 in amount of about BGN 2.3 million and for other companies and physical entities for BGN 1.2 million. As a result of this Stomana JSC registered losses and damages for BGN 3.5 million. Alpa-2000 Ltd. has transported equipment from warehouses of Investment control department in the metallurgic company. There were not any sales orders for the taken out assets, they were not paid or invoiced. The cars were admitted at the exit without the necessary documents. Alpa-2000 is ownership of Mr. Ivan Yankov and Mr. Nikolai Presolski. Mr. Bakalov and Mr. Dimitrov did not admit their guiltiness during the preliminary investigation. There is not still an appointed date for the next court meeting on the case.
Source: Pari (06.04.2004)

Kremikovtzi is polluting and accumulating debts for ecology, which the State doesn’t gather, said the MPs from the inquiry commission to the Parliament that checks the labour conditions in the plant. Kremikovtzi invested only about 20 per cent of the investments for ecology on the privatization contract, according to a report of the Ministry of Environment. Instead of demanding the funds, the Ministry of Environment and Waters rescheduled the investments by 2006. And in the summer of this year expires the contract of the plant with PA. Then will be also finalized the state monitoring on the contract’s execution. The company paid a small part of the old eco damages. The installments on three contracts with the Ministry from 1998 and 1999 have not been paid. On them have been accumulated debts of BGN 5 million with the interests included. On two of them the bank guarantees expired, the Ministry did not call them. The MPs asked what the Ministry of Ms. Dolores Arssenova did, in order to protect the state interest and why were not taken crucial measures for collection of the receivables. According to the privatization contract from 1999, the plant is obliged to give BGN 90.104 million for ecology for the period 2000-2004. These funds will be considered as investments. However, it was found out that by November 15, 2003 from this amount were invested only USD 13.957 million. In the end of 2003 the Supreme Expert Council to the Ministry adopted an anex to the privatization contract. According to the document, the plant is obliged by 2006 to invest BGN 99.574 million in ecology and after 2006 – BGN 198.196 million. Thus, practically the investments are rescheduled. Otherwise, their total amount reaches BGN 297.770 million. The funds should be used for harmonization the company’s activity in accordance with the laws for the Environment. On June 14, this year are going to finalize the privatization duties of the company, reminded he. Because of air pollution the plant accumulated from September 19, 1997 to January 1, this year BGN 343 160 from fines and sanctions. From this amount was paid nothing and that is why State Receivables Collection Agency took measures. Because of water pollution, the plant has debts of BGN 711 885 from June 25, 2003 to January 1, this year. Only BGN 16 369 are paid from them. On January 20, 2000 was signed an agreement between the owner of the company Daru metals JSC, Ministry of Environment and Waters, Ministry of Finance and PA. According to the agreement, the plant liquidated on stages the pollutions with own financing. However, after the end of each stage, the State is obliged to pay the owner the expenditures made. The payment can be realized in a deadline of 1 month when the object is ended and suitable for use in accordance with Decree of the Council of Ministers from 1999 for permission of the construction activities in Bulgaria. In 2000 was adopted a special programme, in which was point out that the old damages would be abolished at three stages. This should happen by 2005 and the maximum expenses for its execution should not exceed USD 15.050 million. On January 11, 2002 was signed an anex. On March 17, 2000 the State signed a structure loan. The contract envisages an extension of totally USD 49.5 million to support the payment balance sheet of the State. The funds were not used for direct financing for liquidation of the old damages. They are utilized on other account in the budget. Experts from the Ministry of Environment and Waters explained that the old pollutions were not the biggest problem of Kremikovtzi but the non-spent funds on the loan were referred to the budget. The company also owes money to the company for management of the Environment. The funds were extended before the privatization but the owner took the engagement to refund them. The first loan was from 1998 and is for construction of dust equipments. The non-paid principal on this contract as of March 8, this year is BGN 742 334 and the interests are BGN 231 847. The second and third loans are both from 1999. Thus, the company owes totally on the three loans a principal of BGN 4.029 million and interests – BGN 1.012 million.
Source: Monitor (06.04.2004)

In the near future when the two biggest metal exchanges - in London and in New York are going to start trading steel futures, the raw-material will fill the list of the exchange commodities. The experts think that in this way the steel market would become more transparent and the abrupt fluctuations in the prices of the metallurgists will be avoided. At the moment the steel, unlike many other commodities – oil, non-ferrous and precious metals, is being traded by the means of direct deals and contracts. Many buyers make their purchases, depending on analyzators’ reports and clearing out between them the offered by the steel-extraction companies’ prices. The metallurgic concern Nucor, International Steel Group and Allegheny Technologies announced the prices and their rising, although other companies stopped to do that as of January, this year. The hot-rolled steel became more expensive as of the beginning of 2004 with 50 per cent and is expected the hot-rolled lists to reach during this month prices of 500-600 USD/t at 330 USD/t in January. In March the Indian Multi Commodity Exchange became the first exchange, at which are traded term steel contracts.
Source: Pari (06.04.2004)

The prices of the most metals on LME reduced. The three-month copper deliveries became cheap with 14 USD/t in comparison with the closing on Friday and were concluded at 2962 USD/t in spite of the new decline of the exchange inventories. Aluminum stabilized at the levels of 1759 USD/t on 1757 USD/t on Friday. Nickel crushed with 120 USD/t to 14 230 USD/t and tin became low with 150 to 8750 USD/t. Zinc retracted with 15 USD/t and lead with 11 USD/t.
Source: Pari (06.04.2004)

The third by size copper-extraction company in the world Anglo American finalized the sale of 20 per cent /for USD 1.16 billion/ in the third biggest producer of gold Golden Fields to Norilski nikel.
Source: Pari (06.04.2004)

The more expensive metals supported the growth of the non-consolidated profit for the fourth quarter of 2003 of the world leader by extractions of nickel and metals from the group of platinum – the Russian Norilski nikel. The net profit /according to the Russian accounting standards / increased with 15 per cent and amounts to USD 333.2 million. The non-consolidated profit for the nine months is RUR 26.99 million at a loss of RUR 2.65 billion for the same period of 2002.
Source: Pari (06.04.2004)

The biggest steel-extraction Arcelor is considering an increase of the steel prices during the third quarter, which will be higher than this in the first half of 2004. The prices of the steel, produced by the company will exceed 400 USD/t.
Source: Pari (06.04.2004)

3 400 former employees of Stomana will receive as of today the owed salaries and compensations for 1999 and 2000, was reported from the company. The funds are provided by Stomana industry from the payment before the term set of the rest on the deal for sale of the self-contained part Steel-extraction. BGN 4 880 798 are transferred in escrow account of Social insurance department – Pernik. In this way we guarantee the salaries of the people because the funds are strictly used and other creditor can’t have any claims to them, specified the Director of Stomana Mr. Spas Hristov. A schedule for payment of debts has been made. The former workers in the main work-shops are going to receive their money first. The payments will end on May 21. A part of the funds will be also used for payment of debts to Territory tax departments. Stomana industry paid BGN 7 015 486 one year and a half earlier. The sum was calculated at fixed USD rate BGN 2,17146. USD 13,5 million is the price of the deal for sale of Steel-extraction self-contained part. BGN 2 010 369 were directly transferred to NSSI for insurances on owed salaries and compensations.
Source: Monitor (07.04.2004)

The strong BGN and high taxes stand in the way of Bulgarian economy, according to the report, published by the research unit of the Economist magazine – Economist Intellectual Unit (EIU). The lack of fast economy progress in EU is the main macroeconomic problem for Bulgaria, which means the demand for Bulgarian products on their key international markets will remain relatively weak. The reduction of Bulgarian export on markets, dominated by USD, is another risk factor, analysts commented. High fuel prices may cause growth in the country’s inflation.
Source: Pari (07.04.2004)

The activation of the world economy during this year will make the metals more expensive, which are going to settle down at lower levels in 2005, according to a prices’ forecast of 20 exchange commodities of the analyzators’ company Access Economics. At the moment the situation on the market favours at maximum the metals’ price rising, shows the research, in which take part 12 experts, mainly representatives of banks. As of the end of 2004 aluminum is going to cost on an average 1660.84 USD/t, with 13 per cent more in comparison with the end of 2003. Copper is going to increase with 3 per cent in comparison with December 2003 up to 2467.81 USD/t. Now it is being traded at 2900 USD/t. During last year nickel became more expensive when the demand of producers of stainless steel exceeded the supply and th metal will end 2004 with a growth of 20 per cent and will be sold at 13 210.54 USD/t. According to the analyzators, during next year the non-ferrous metals would start to become cheaper. The aluminum’s prices are going to reduce with 2 per cent, of the copper with 6 per cent and of the nickel with 12 per cent as of December 2005. In a long-term prospective, in the middle of 2006, is expected a total 20-per cent slump in the quotes of lead, platinum, silver, copper, nickel and petrol.
Source: Pari (07.04.2004)

The copper’s prices on LME crashed under the 30-day support levels for a first time as of the end of November. In spite of all this, it is expected a new increase during the second quarter, regarding the major market factors and mostly the shrunk market deliveries. The quarter copper deals concluded at 2895 USD/t in comparison with 2880 USD/t on Monday. Aluminum was quoted at 1735-40 USD/t, almost without a change. Lead became expensive with 6 USD/t up to 797 USD/t and zinc continued to retract. It became cheaper with 17 USD/t to 1031 USD/t. Nickel became expensive with 100 USD/t and tin with 125 USD/t.
Source: Pari (07.04.2004)

Palladium continues to move about 17-month maximum of 313 USD/tr. ounce. This rate was marked after the news for a technology, developed by Umicore that allows the exchange of platinum with palladium in the catalizators of the diesel engines. The technology favours mainly Norilski nikel, which is the top producer of palladium in the world. The new technology is expected to be introduced in exploitation during next year.
Source: Pari (07.04.2004)

KCM JSC took a credit in amount of about USD 9 million for 5 years, in order to clear the waste waters from hard and poisonous metals like zinc, lead, arsenic. With this money started the construction of the biggest clearing station in a metallurgic company in Bulgaria. The project will be realized for a little more than 12 months. As of the middle of 2005 the company’s waters will be included in a closed cycle and will be processed 350 cubic metres per hour. In 1990 the company used 3000 cub.m /hour and now 700 cub.m /hour are completely sufficient. After the construction of the clearing station, the water consumption will be only 250 cub.m /hour.
Source: Maritsa (08.04.2004)

Only 7 per cent are the bad credits to the banks, according to the statistics of BNB. In 1997 the unpaid loans were 58 per cent, said the Governor of the Central Bank Mr. Ivan Iskrov. The share of the credits in the bank assets for 2003 is over 50 per cent and in 1997 it was 22 per cent, announced Mr. Petar Andronov from Bank supervision department. By the end of the year BNB is going to make changes in Decree 8 for the capital adequacy. The changes will become efficient as of 2005.
Source: Standart (08.04.2004)

Baoshan Iron&Steel – the sixth in the world by extraction of steel, plans by 5 years a jump with 50 per cent of its production capacity because of the increasing demand in the State. Baosteel intends to invest USD 6-7.2 billion by 2010 in enlargement of the manufacture from 20 million to 30 million tons and hopes the steel’s price to remain high at least by the end of the year. The steel deficit in some countries rose the prices of some of the sorts of steel, such as the hot-rolled steel, up to over 500 USD/t from about 200 USD/t two years ago. China doubled the extraction in January – February, this year with 26 per cent, while for the same period the world extraction increased with 3 per cent. Another world steel producer with plans for a jump in the extractions with 50 per cent during the next years is LNM. China has a production capacity of 220 million tons steel and is expanding its steel-extraction capacity with other 80 million tons per year and the consumption in 2004 is going to reach up to 1/3 of the forecasted world extractions or 1 billion tons.
Source: Pari (08.04.2004)

The non-ferrous metals on LME became cheaper on Wednesday, excluding copper that reached 2903 USD/t – lower than 2920 USD/t in the early trade but over the bottom of 2896.50 USD/t at the opening. Aluminum also became expensive with USD 1 up to 1749 USD/t. Nickel retracted with USD 120 to 14 180 USD/t. The zinc’s price reduced with USD 6 to 1052 USD/t and tin – with USD 50 to 8950 USD/t. The lead’s price also dropped with USD 3 to 792 USD/t.
Source: Pari (08.04.2004)

Kazakhstan-based copper corporation Kazakhmys, one of the 10 top producers of copper in the world, increased in the first quarter of 2004 the extraction of refined copper up to 103 428 t from 99 273 t during the first quarter of 2003. The company’s profit for the period increased up to USD 266 million, mainly from export to China and Europe. This is with 25.2 per cent more than the same period of 2003.
Source: Pari (08.04.2004)

The biggest Romanian company for aluminum - BBG ALUM increased with 25 per cent up to 500 000 tons the extraction of aluminum, in spite of the preventions connected with higher with 66 per cent sea transport fees and the more expensive electricity. Romania imports bauxite from Africa, Latin America and Australia.
Source: Pari (08.04.2004)

19 Nessebar-based companies joined a union, in order to construct a fish attraction object, announced the Mayor of Nessebar municipality Mr. Nikolai Trifonov. He did not specify the companies but said that the municipality would also take part in the construction and executor of the object will be Transstroy-Varna. The equipment must be finalized by the summer. Initially defined funds, necessary for the construction, are about BGN 70 000.
Source: Dnevnik (09.04.2004)

The biggest producer of aluminum in the world Alcoa Inc. announced a double higher profit for the first quarter of 2004, owing to the higher prices of aluminum and the big sales for automobile and airplane producers. The company’s net profit reached USD 335 million or 41 cents yield per share, while one year earlier it was USD 151 million or 17 cents per share. The incomes of Alcoa increased with 11 per cent for the first quarter and amount to USD 5.7 billion.
Source: Pari (09.04.2004)

The enterprises from heavy metallurgy sector realize a big part of the Bulgarian export, according to data of the Ministry of Economy. However, some companies consider that the lack of a state strategy for development of the sector is a major prevention for penetration into new markets. 10 years ago in Bulgaria could be revealed a well-developed metallurgic industry with certain markets. At the moment the functioning companies in Bulgaria are hardly several and the problems, facing them are serious. The major problem is the high price of the energy sources. The average prime cost of electricity for the State is not expensive. It is BGN 0.02-0.025, depending on the producers – nuclear power plant or TPSs. The lost several years ago markets is also a serious problem for the metallurgic manufacture. The only reason our production to be wanted is the competitive prices. Quite often the world giants in the branch buy articles from the Bulgarian plants and offer them on the market, which restricts the activity of the Bulgarian companies only as subcontractors.
Source: National television (09.04.2004)

The British-Indian company LNM Group, the second by size steel producer in the world after Arcelor, intends to buy from Balkan Steel two Macedonian plants with total capacity 2.2 million tons. The production of the plants is exported to USA, European union and the neighbouring Balkan countries.
Source: Capital (10.04.2004)

When the big consumers start to receive electricity on direct contracts with the electric power stations, they lose the right to buy from NEC or electricity-distribution companies except on conditional contracts. The delivery of electricity on conditional contracts will be executed at fixed prices without weekend tariffs. These specifications will include the project of Rules for the trade with electricity, which regulates how producers and big consumers will conclude direct contracts for delivery of electricity. As a compensation of the canceled weekend tariffs, the prices on direct contracts won’t be regulated and will be familiar only to the sides on them. The consumer is obliged to conclude a contract with NEC or any electricity-distribution company for the cases, in which will use quantities, bigger or less than the declared. The companies have to forecast their consumption for one week forward if the deliveries are direct. On this base, NEC as an operator prepares a schedule and the station produces the certain quantity. The market organization will be realized by NEC. The latter will register the trade participants in a register. At the moment the privileged consumers are with annual consumption over 100 GV/h – Maritza iztok mines, Stomana industry-Pernik, KZM-Plovdiv, Assarel medet-Panaguyrishte, Elatzite med, Umicore-Pirdop, Devnia tziment, LUKoil-Neftochim-Burgas, Agropolichim-Devnia, Neochim-Dimitrovgrad. After the middle of 2004 the market will be also opened for companies with consumption of over 40 GV/h. In 2007 each consumer has to be privileged. For the time being sellers will be TPS Maritza-iztok 2, TPS Varna, TPS Bobovdol, TPS Ruse, TPS Maritza 3, plant stations and some of the HPSs.
Source: Pari (13.04.2004)

Belgian company Umicore has developed a new technology, reducing the expenditures in the production of diesel engine catalysts, FT wrote. In the new technology, palladium is used instead of platinum, which reduces the production expenses of this component more than three times. The innovation will save to automobile producers USD 20 per engine, which is an excellent result. The new technology was highly estimated by all car producers.
Source: Dnevnik (13.04.2004)

The US commercial and financial company World Business Capital (WBC) is going to grants loans of USD 250 000 – USD 10 million, Bulgarian Industrial Association announced. The credits will be granted to Bulgarian businessmen, willing to buy new equipment, technologies, projects, etc. WBC’s condition is that local producers should buy products made by US companies or work jointly with US partners. WBC is granting the credits with the financial support of the US government. A total of three credit lines will be available.
Source: Pari (13.04.2004)

A Bulgarian-Ukrainian Business Council will be established tomorrow within the frames of the bilateral business forum, organized by the Bulgarian Chamber of Commerce and Industry (BCCI). Representatives of 11 Ukrainian companies, accompanying Ukraine’s Minister of Foreign Affairs Mr. Kostyantin Grishchenko during his official visit to Sofia, will take part in the forum. The companies are operating in the field of power engineering, oil and gas industry, machine building, mining, river transport, etc. Some of the Bulgarian companies taking part in the forum are Bulgargas, Metalsnab Holding, Stomana, Schenker, Metro, Technomarket, Technopolis, etc.
Source: Pari (13.04.2004)

The company, whose name is unknown to 99 per cent of the Bulgarians is a leader in the top sales list during 2003, according to Banker newspaper’s research. The research was made after the deadline for providing of the financial P/L accounts to the tax administration and National Social Security Institute (NSSI). The sales’ leader proved to be Litasko Bulgaria SP Ltd., which in fact is the renamed company LUKoil Black sea – Bulgaria SP Ltd. – from the structures of the Russian petrol giant in the State. After Litasko Bulgaria is another company from the same family – LUKoil Bulgaria (ownership of LUKoil Europe – Netherlands). The first two places of the companies in the list are due to the internal restructure in LUKoil. In 2001 was decided the companies to take the major operations with petrol and LUKoil Neftochim Burgas JSC to process foreign raw-materials. In this way Burgas refinery lost a part of its considerable incomes – from BGN 2.778 billion in 2000 they dropped to BGN 532 million in 2001 and after that to the current BGN 345-350 million. Meanwhile LUKoil Bulgaria increased its turnover – from BGN 1.49 billion to BGN 2.62 billion in 2001 and in 2003 registered sales for BGN 1.93 billion. Other big Bulgarian companies also registered stagnation in the sales during 2003. More specifically in the petrol sector all leaders register a slump – Shell from BGN 274 to BGN 268 million and Petrol – from BGN 389 to BGN 356 million. Drastically are also reducing the incomes of two of our major haulers – Bulgarian State Railways (BDZ) and Navigation Maritime Bulgare (respectively with 16 and 20 per cent). The decline at SOMAT is bigger – with 24 per cent. In the list of the fastest developing companies, Glavbolgarstroy is first, increasing its incomes 2.5 times. Its turnover exceeds BGN 200 million, was specified from the holding. More than two times have also increased the sales of Cosmo Bulgaria Mobile. However, because of the lack of data from Mobiltel, there can’t be made conclusions for the sector’s development as a whole. On behalf of that, the four representatives of the metallurgy, included in the list, register a considerable growth in their net sales. This refers mainly to Umicore Med – Pirdop with a profit of BGN 84 million. Kremikovtzi and especially its trade structure – Kremikovtzi trade are raising their turnovers too. Stomana industry – the companies with owners Eurometal and Sidenor that bought the assets of the bankrupted steel-extraction plant in Pernik, has the highest sales’ rising but in spite of this the company ends the year with a loss. The explanation is in the more expensive metal scrap, which is major raw-material for Stomana industry. Plovdiv-based producer of lead and zinc KZM explains its negative result with the international market conditions. The total amount of sales of the leading Bulgarian companies shows a slight nominal growth in comparison with 2002 - with 5 per cent. And Bulgarian economy depends significantly on its giants. Only 1 per cent of the companies in Bulgaria contributes 70 per cent of the Gross Domestic Product of the State.
Source: Banker (13.04.2004)

Prime Minister Simeon Sax Cobourg suggested Minister of Finance Mr. Milen Velchev should become Managing Director of IMF.The nomination was made yesterday by official letter addressed to the Chairman of the International Monetary and Financial Committee Mr. Gordon Brown. Mr. Velchev said if he was elected, he would leave his current post as Minister of Finance. He will compete for the post with the former First Deputy Managing Director of IMF Mr. Stanley Fischer and the former Director of EBRD Mr. Jaque Lumiere.
Source: Pari (14.04.2004)

The population in the South-western region of the State is the richest, according to data of the National Statistics Institute. The Gross Domestic Product per capita in this region is USD 3586 for the last year. This is with USD 1200 more than the GDP per capita in the rest region of Bulgaria. The services in the South-western region are the most well-developed. They realize from 2 to 7 times more incomes than the services in the rest regions of the State. According to NSI, the North-western region is the weakest.
Source: Standart (14.04.2004)

The testings of a new heating furnace in the list rolled-iron workshop of Stomana industry-Pernik have started. The furnace is constructed and delivered by the Italian company Techint Italipianti. It was built for 6 months. Its length is 28 m and has a heating capacity of 55 tons metal per hour. The existing furnace had a capacity of 30 t/h. The consumption of natural gas is reduced with 60 per cent, which also reduces the issues of carbon dioxide. The production’s quality is considerably improved, owing to the more regular heating of the metal. The investment amounts to EUR 3.7 million.
Source: Sega (14.04.2004)

The testings of a new heating furnace in the List rolled iron work-shop of Stomana industry JSC – Pernik have started, announced the Chief engineer of the metallurgic company Mr. Dimitar Minchev. The furnace is constructed and delivered by the Italian company Techint Italipianti. It was built for 6 months. Its length is 28 metres and has a capacity of metal heating of 55 tons per hour. So far the existing furnace has had a capacity of 30 tons per hour. The consumption of natural gas is reduced with 60 per cent, which also reduces the issues of carbon dioxide.
Source: Pari (14.04.2004)

The sale procedure of the metallurgic plant in the Serbian town Smederevo has ended. The plant was bought by the American company US Steel for USD 33 million, announced the PR of the company Mr. Thomas Ferrol. The American company started the deal for the purchase of Sartid in September, 2003 when the plant was in bankruptcy. Then the company took the duty to pay USD 33 million, USD 23 million of them in cash. The transaction costs amounted to USD 6 million. US Steel paid another USD 4 million for pension and invalid insurance of the workers. The company also took the duty to keep all workers – about 9 000 people. In the future years US Steel should invest USD 150 million more in equipment, modernization and maintenance of the metallurgic plant.
Source: Dnevnik (14.04.2004)

The prices of nickel during this year will jump on an average with new 14 per cent in comparison with 2003 when they increased with 70 per cent, expects the Indonesian copper-extraction company Antam, which is among the biggest world producers. The average prices are going to be 11 000 USD/t at 9637 USD/t for the former as a result of the shrunk supply and the increased demand in the world. The demand in China for manufacture of stainless steel is intensively rising. According to Antam, China consumed in 2003 with 50 per cent more nickel in comparison with 2002. Over this year on the world market there is going to be a deficit of 30 000 tons nickel or about 2.5 per cent of the world demand. The company envisages within 2006 the prices of the metal to keep high, mainly owing to the good consumption growth, from China mainly. However, after that they are going to lower because the new inventories on the market. In January the quotes of nickel jumped to the 14.5-year maximum of 17 720 USD/t as a result of the significant low inventories on LME and the Chinese demand. According to the second by size producer of nickel in the world – Canadian INCO, the global consumption will increase with 7 per cent up to 1.25 million tons.
Source: Pari (14.04.2004)

Copper crashed down with a little under 50 USD/t on LME and marked its lowest levels for 1 month or 2826 USD/t. Most of the rest non-ferrous metals also registered losses. The quarter zinc deals cost with 7 USD/t lower in comparison with Friday or at 1032 USD/t when the exchange inventories considerably increased. Aluminum became expensive with 5 USD/t to 1743 USD/t and nickel retracted with 150 USD/t to 13650-13 750 USD/t. Lead became cheap with 14 USD/t to 730-735 USD/t and tin with 50 USD/t to 8 250-8 350 USD/t.
Source: Pari (14.04.2004)

NSI reported a 0.1 per cent deflation in March compared to February. The consumer prices index is 99.9 per cent. Last month, the prices of food products dropped with 0.3 per cent, but the prices in the catering and service sector rose. The prices of non-food products remained flat. According to NSI’s preliminary data, products for BGN 2117 million were exported from Bulgaria over the first two months of the year, from BGN 2 927 million over the same period of last year. Imports jumped with almost 14 per cent from BGN 2571 million in January and February 2003 to BGN 2927 million in the first two months of 2004. The main foreign markets of Bulgaria are Germany (export for BGN 261 million), Greece (BGN 252 million), and Italy (BGN 272 million).
Source: Pari (15.04.2004)

The strengthening of the market and the closing of the cycle raw-material-production-trade is an objective, towards which most of the foreign companies in Bulgaria are heading. The Greek industrial group Viohalco that appeared at our market of ferrous and non-ferrous metals 10 years ago, deliberately is expanding its activity. The first investment was in 1993 – TeProMetal. Then followed Steelmet since 1994, Sofia Med - 2000 and Stomana industry - 2001. Viohalco invested in its companies in Bulgaria totally EUR 148 million and USD 42 million. At the moment in these companies are working 2700 people.
Source: Sega (15.04.2004)

Canada-based Dundee Precious Metals is going to invest USD 12 million in Bulgaria by the end of April, according to the additional notes, included in the company’s 2003 first quarter accounting report, quoted by the US investment site Stockhouse. According to the concession contract, Dundee obliges to invest in Chelopech USD 18 million by the end of the year. This is a part of the company’s investment program for the next three years, which is to the total value of USD 90 million. In 2003, Dundee gained majority stake in Chelopech Mining, after buying it from the insolvent Navan Mining. Since it was bought in January, the Canadian company has suffered losses in the amount of USD 3.3 million from its Bulgarian operations, according to the publication. The new owner of the mine paid its debts of USD 2.1 million, which cost them USD 700 000. The company is also considering building a new gold mine Ada Tepe. Dundee has sufficient funds and credit lines to take up the financing of the project. Besides the concession in Chelopech and Ada Tepe, the company also expects to obtain licens for gold extraction in Krumovgrad, where the prospecting has almost ended. For the first quarter of the year, Dundee registered a net profit of USD 11.8 million before taxation, which represents a significant increase from USD 800 000 a year earlier. The company’s revenues reached USD 58.4 million, compared with USD 27.6 million in the first quarter of 2003.
Source: Dnevnik (19.04.2004)

Last week the price of light aluminum – one of the metals from the non-ferrous metals complex, traded at LME, jumped to their eight-year maximum of 1775 USD/t twice, and later reached 1804 USD/t. These high quotes were further sustained by the reducing aluminum inventories at LME. According to observers, the metal is being bought up in Eastern Europe in order to avoid the customs duty, which will be introduced on imports after the new countries from the region join EU on May 1. Traders and analysts said they expected the prices to go under 1800 USD/t for a short period, and then to consolidate and attack levels of 1900 USD/t, and even 2000 USD/t. The prices of the rest of the metals – copper, zinc, lead, nickel, and tin, were also up.
Source: Capital (19.04.2004)

For the third month in a row, a parliamentary commission is investigating the reasons for the breakdown in Kremikovtzi, in which three people died on January 10. No results have been revealed so far. Unfortunately, this is not the first breakdown in the plant. There have been even more serious incidents. Metallurgical production hides risks, and Bulgarian workers are not the most disciplined ones. Both facts are widely popular. Nevertheless, local deputies decided to establish a temporary commission in parliament, which task was to investigate the labour conditions in the plant. Its members have been working for three months already, but obviously, not on this task. Their actual task is different – to cause shakeups in Kremikovtzi from time to time, so that the dark affairs of some of the former directors of the plant could not come into the open. By the way, two of the key figures leading the investigation are former directors of the plant. The Chairman of the temporary commission in parliament is deputy from the MRL Mr. Ramadan Atalay. He is a mining engineer and worked in Kremikovtzi for almost 20 years, the last 5 of them being a Trade Director. At that time, his name was Mr. Radi Mihaylov. He was known for fiercely defending the idea Kremikovtzi to be sold for USD 1 to the Turkish company Erdemir. Only its assets, without the liabilities. He also claimed the deal should not be disputed in court, since, in his opinion, the court and prosecutor’s office in Bulgaria stood in the way of privatization. It is strange that currently he supports exactly the opposite idea – the prosecutor’s office and the court to investigate the Kremikovtzi privatization deal, the reason being the breakdown from January 10. What is even stranger is that the counselor of the parliamentary commission is Mr. Lilyan Vachkov. In 1984, he was sentenced for taking advantage of his position as a Director of an operative department in Kremikovtzi in his personal favour. He was even in jail for a couple of years. In 1990, he was reprieved by President Jelev in another case – for financial violations. Despite this background, a year later Mr. Vachkov headed Kremikovtzi’s Board of Directors. And in July 1992, he became director of the company and of Mr. Ramadan Atalay. Both of them were dismissed from their posts in October 1995. Two years later, Mr. Lilyan Vachkov was re-appointed, by the virtue of a decision, published in the State Official Gazette on June 24 1997, according to which, the directors of the plant had to give up their posts to the Board of Directors headed by Mr. Lilyan Vachkov, elected in 1991. Actually, there is no decision and no changes. This was a mistake. Who made this mistake in the State Official Gazette, is not clear. Currently, Mr. Vachkov, in his own words, works in a company trading metal. “While I was managing Kremikovtzi, the company was constantly progressing, and afterwards went into a crisis. Until the end of 1994, it had no debts. A long time ago, I told the former Prime Minster Mr. Luben Berov I was not responsible for the interests of the Republic of Bulgaria”, Mr. Vachkov said in an interview after the breakdown in Kremikovtzi. Exactly in 1992, 1994 and 1995, however, the company was facing bankruptcy, according to another one of its former executive directors of the plant -–Mr. Atanas Bogdanov. According to an inspectoral statement from 1998, during the period Mr. Vachkov headed the plant, more than BGN 8 million have been drained from it. Financial inspectors are firmly assured the fault for the caused damages belongs to him. His signature could be found under a contract between Kremikovtzi and US-based company Rudolf Robinson to the value of USD 1 230 708 mln., which have not been received by the company as yet. Currently, the investigation authorities are checking exactly how Mr. Vachkov took advantage of this contract. Another USD 667 942.34 were lost by Kremikovtzi under the deal with Oreint-D, registered in Lebanon. On the part of Kremikovtzi, the contract was signed unilaterally by Mr. Lilyan Vachkov. His signature could also be found under the contract with Trinity Chart, a branch of Matan International Trading. Kremikovtzi has to receive from this company USD 1.5 million, but has no chance to receive even a cent from this money. According to the inspectors, the fault for the caused damage belongs to Mr. Lilyan Vachkov. Mr. Vachkov also signed another contract, containing clauses harming the interests of Kremikovtzi – on August 15 1994 – with the Republic of South Africa-registered Triller S to the value of USD 649.733.33. By rough calculations, Mr. Lilyan Vachkov has caused Kremikovtzi damages for over BGN 8 million and almost USD 4 million. The damages, caused by the other directors, have been mentioned separately in the inspectoral statement. The document consists of 90 pages. The investigation lawsuit based on it was initiated as early as 1997. Until the end of 1999, however, it resulted in no consequences. There is no data available as to whether the reason for this is the former General Prosecutor Mr. Ivan Tatarchev, who is Mr. Lilyan Vachkov’s best man. But it’s a fact that the investigation was resumed only after Mr. Tatarchev’s post was assigned to Mr. Nikola Filchev. On April 11 1995, Mr. Lilyan Vachkov, being Director of Kremikovtzi, signed a contract with the US-based company Rudolf Ropinson, which at that time was absolutely unknown. Nowadays, the information available about this company is still very scarce. The company was registered a little before the deal was concluded, as it seems, for the purpose of signing the deal. Because, in the end of all ends, USD 1.2 million sank in the company. According to the contract, Kremikovtzi had to sell to the US company 10 000 metric tons of galvanized roll-ons at a price of USD 480 per ton. By the virtue of an annex, dated July 12, this amount was raised with another 11 000 metric tons at a price of USD 495 per ton. The roll-ons were loaded on ships and sent to China. According to the buyer, however, the production was of poor quality and they refuse to pay for it. After a fax exchange and some meetings in New York, the final price Rudolf Robinson had to pay was reduced to USD 213 760. When probing into Kremikovtzi’s accounting files, however, inspectors found that according to them the US company owes to the enterprise USD 1.2 million. Currently, the investigation is checking exactly how Mr. Lilyan Vachkov took advantage of the deal in his personal favour. In 1999, Rudolf Robinson was among the candidates for Stomana – Pernik, offering a price of USD 14 million. The company stated annual turnover of USD 200 million – USD 400 million.” In the course of the procedure, we received a check-up from the US embassy in Estonia, stating the company disposes of only two iron warehouses – one in USA and one in Estonia,” according to a member of the working group, that evaluated the offers for Stomana. Rudolf Robinson’s name appeared in the public space again in 2002. Back then, the prestige UK issue Metal Bulletin announced a representative of the Bulgarian government offered to this company to apply in the competition for the already privatized combine Kremikovtzi. In a statement addressed to the Bulgarian media, the manager of the company Mr. Barry Burnstane said that the proposal was not made by a government official, but by an international trade company. However, he rejected it, finding it unreliable.
Source: Standart (19.04.2004)

Metacom SLZ JSC – producer of steel and cast-iron castings won the big prizes of Pleven municipality and Partners Export – Wing of Success. The prize was granted at the closing of the 13th international exhibition in Pleven, in which 136 companies from the whole country took part this year. Mr. Petar Naydenov – Manager of the company, said the prize was a recognition for the whole staff of the company, consisting of 200 emplyees, which created the exposition of illuminants and benches, he added. Some of the other nominees were Technolux LTD. – Pleven for retail and wholesale of appliances, and Asmatech Ltd. – Sofia for heat insulating materials. The branch business chamber, chaired by Ms. Ilka Ilieva, awarded the company Sarten Bulgaria Ltd. for best producer in the region of Pleven. Another one of the nominees in this category was Metacom SLZ and Stroyproduct SP Ltd. The award of the Bulgarian Chamber of Commerce and Industry was awarded to Lucatex SP Ltd. – Sofia, imported of the brands Faber and Nardi, for presenting a new product and new technology. Some of the other nominees in this category were Technolux Ltd. – Pleven, and Ecomebel Ltd. – Pleven. The award of the Journalists Union in Pleven for original presentation and active presence in the media during the exhibition was granted to Stroyproduct SP Ltd., managed by Eng. Rosetta Marinova. The public award went to Siko-S – Subi Subev SP – Sofia, which showed its complex bathroom equipment.
Source: Posoki-Pleven (20.04.2004)

Inflation in Bulgaria will reached 7.1 per cent, GDP will grow from USD 34 546 billion to USD 38.786 billion in 2004. Foreign investments in Bulgaria will be in the amount of USD 1 billion, which is USD 300 million less than last year. All these forecasts are included in the EBRD 2004 renewed report on the countries from Eastern Europe. According to Minister of Finance Mr. Milen Velchev, however, the actual results will be higher, because there will be more greenfield investments this year, and the privatization will be more successful.
Source: Pari (20.04.2004)

Bulgarian steel production grew with some 24.5 per cent last year, as compared with the same period of 2002, Branch Chamber of Ferrous and Non-ferrous metallurgy announced. The total production output of the three major metallurgical enterprises operating in the branch – Kremikovtzi, Stomana Industry and Radomir Metali, is in the amount of 2 315 500 tons of steel compared with 1 859 900 tons last year. The growth is due to the bigger demand for the material and higher prices, Ms. Politimi Paunova, Secretary of the Chamber explained. While in 2002, 1 310 800 tons of rolled iron were produced from the steel, last year the plants operating in this branch produced 1 686 700 tons of rolled iron, 2/3 of which were exported. Despite the limited EU export quotas, last year Bulgaria has exported 10 per cent more rolled iron than in 2002. Back then, 970 300 t were exported, while in 2003, the amount of export was 1 097 300 tons. After the crisis in the branch 5-6 years ago, enterprises are now gradually regaining their markets and expanding their production. Metallurgy accounts for some 9 per cent of our country’s total industrial production and some 13 per cent of exports, the Chamber announced. Experts forecasted this share would maintain over the next few years. These forecasts are based on the forecasts given by the separate enterprises. Traditionally, the biggest share in steel production is occupied by Kremikovtzi, which produced 659 200 tons of steel last year, followed by Stomana Industry – 644 000 tons, and Radomir Metali – 13 300 t of steel. Steel products top list is similar. Kremikovtzi alone produced 926 600 tons of hot rolled roll-ons last year, which is 164 900 t premium to 2002. The production of cold rolled roll-ons has jumped with over 20 per cent as well. The plant produced 341 200 tons of this product type compared with 176 300 tons the year before. Considering the positive trend in the development of the branch, the Chamber insist the review some “public statements, creating negative attitude towards Kremikovtzi”. This opinion is stated in a letter, addressed by the Chamber to the Chairman of the National Assembly, the heads of parliamentary groups and to the temporary commission, investigating the situation in the Sofia-based plant. The chamber insists to be included in a representational organization of the companies, operating in this branch, in the discussion of problems and questions, related to metallurgical industry.
Source: Dnevnik (20.04.2004)

On LME on Monday, three-month copper deals were made at a price of 2938 USD/t - 20 USD/t premium to the closing of trade on Friday. Aluminum prices were moving in the same direction. They were up 7 USD/t reaching 1835 USD/t, and inventories dropped with 2.3 thous.tons yesterday. Nickel went down to 12 950 SUD/t from 13 075 USD/t, and lead added another 9 USD/t to its quote reaching 750 USD/t. Zinc’s price declined with 4 USD/t to 1023 USD/t/
Source: Pari (20.04.2004)

Belgium-based private copper producer Lamitref is leading active negotiations with partners for uniting their operations. The negotiations are expected to take a couple of months, the company announced, refusing to give any specific names. LAMITREF INDUSTRIES is a major European producer of copper formats and semi-finished products. It is currently facing increasing the prices of its production because of the higher prices of copper scrap, resulting from higher demand in China and India. Recently Belgium-registered Umicore announced it had terminated its merger negotiations with Lamitref. They started in August 2002 and ended unsuccessfully 6 months ago.
Source: Pari (20.04.2004)

Chile – the world’s biggest copper producer, exported metal for the record USD 1.402 billion in March, as a result of the rising copper prices at the Exchanges. Export jumped with 175 per cent from March 2003.
Source: Pari (20.04.2004)

Aluminum scrap prices in Europe reached 1762 USD/t in line with the growing quotes of initial metal at the exchanges. A month earlier, scrap was traded at 1718 USD/t. Western traders do not expect any significant changes on the market after the forthcoming enlargement of EU with another ten members on May 1.
Source: Pari (20.04.2004)

American, Russian, Turkish and Japanese companies will have limited access to local public procurement competitions, according to the latest amendments in the Public Procurement Act, which are already effective. These states do not provide access to Bulgarian companies to their competitions. Ms. Evgenia Koldanova, Deputy Minister of Economy, explained the state authorities are not obliged to suspend these companies from the competitions, but, at their own discretion this could be done.
Source: Monitor (21.04.2004)

The metallurgic giant ISPAT is interested in cooperation with Kremikovtzi. However, according to experts from the plant, the negotiations would be for sale of a part of Finmetals holding, owner of 71 per cent of Kremikovtzi. Even the documents are ready and in July, 2004 is expected to expire the 5-year deadline for prohibition of the sale of shares, in order the deal to be signed. There has been a representative of the foreign company in Sofia for two months now. The company is interested in the capacities for the productions of coke because of the deficit of coke in Romanian plant Sideks in Galap, property of ISPAT. Bulgarian plant refused to make specifications since the Executive Director Mr. Valentine Zahariev is abroad.
Source: Pari (22.04.2004)

Stomana industry started a testing production of raw-material for non-ferrous metals. The new technology mixes the production dust with water and turns into granules.
Source: 24 chasa (22.04.2004)

A joint venture mining company in Australia partly owned by the Shanghai Baosteel Corporation has started operation, the corporation announced here Wednesday. The mining company, located in western Australia, is a joint venture between the Shanghai Baosteel Corporation and Rio Tinto Co., one of the three largest mineral providers in the world. Baosteel holds 46 percent of the stake while the remainder was held by the Australian company. The term of the joint venture is 20 years. Apart from the joint venture, Baosteel had joined hands with Brazil in exploiting ironstone in Brazil. (source: Xinhua)
Source: Other (23.04.2004)

MEBO KCM 2000 that holds the major stake of Plovdiv-based plant for non-ferrous metals, is going to change its activity. The decision will be voted by the shareholders at the General Meeting, appointed on April 30.
Source: Banker (24.04.2004)

The syndic of the declared in insolvency company Ekotehnologii Mr. Ivo Velchevski will try on May 4 for a second time to sell an installation for processing of slag, situated on the territory of Kremikovtzi. The initial tender price for the equipment is a little over BGN 1 million.
Source: Banker (24.04.2004)

World economy has marked a 1.9 per cent growth in 2002, according to a World bank report on the general growth indicators, which was presented in Washington during the spring meeting between World bank and the IMF. Following two decades of negative GDP growth in Europe and Central Asia, a revival is currently observed. By GDP growth (4.8 per cent), Bulgaria is ranked after Turkey (7.8 per cent), while in Romania and Russia, GDP growth is 4.3 per cent, while in Poland – only 1 per cent. GDP per capital in Bulgaria has grown with 5.5 per cent, in Romania – 4.8 per cent, in Turkey – 6.1 per cent. The smallest increase is in Poland – 1 per cent. According to the report, export of goods and services in 2002 in Bulgaria has increased with 6.2 per cent, and the forecasts for 2003 are for 14.3 per cent.
Source: Pari (26.04.2004)

The owner of LNM, the second by size steel-extraction company in the world, Mr. Lakshmi Mital is quite assured. He expects LNM to extract 70-80 million tons steel per year forthcoming 7 years or almost 2 times more than in 2004. If his plans become real, it is almost sure that the company will become N 1 in the world, replacing the current leader Arcelor that will extract during this year about 40 million tons too. Arcelor has ambitions to increase its presence in Brazil and soon will be able to penetrate more seriously in Russia and China. The billionaire Mr. Mital quickly developed LNM during the last 5 years, mainly through a series of brave mergers of privatizing companies in Eastern Europe and Asia.
Source: Pari (26.04.2004)

The first quarter of 2004 registered profits for Outokumpu – a metal-extraction Finnish company, one of the first in the world. The higher demand of stainless steel posted profits of EUR 25.5 million for the company after the losses of EUR 4 million in 2003. Before the official report of the results for the first quarter of 2004 that will be announced on April 28, the company depends on net sales of EUR 1.5 billion, in which is not included the expected profit of EUR 18 million from the sale of the sector for manufacture of filtres to other Finnish company - Larox. The profit of the company from major activity for the first quarter of the year increased with EUR 42.5 million and for the whole 2004 is planned to be reached EUR 315 million, to increase up to EUR 477 million in 2005 and to retract to EUR 438.3 million during 2006 because of surpluses on the market. The demand of iron and steel by the fast-developing Asian giants – China and India and from Japan and Southern Korea, contributes to a high extent for the boom of their production in Europe and America and of the export of highly qualified commodities. The metal-processing companies are ready once again for better performance and earnings after the fall during the last 3 years.
Source: Pari (26.04.2004)

The non-ferrous metals remained expensive at the closing on the stock exchange trade on Friday but the investors are expectinga new potential during the new week because of liquidation of long positions from funds. The copper on 3-month deals closed at 2712 USD/t after USD 2705 on Thursday. Aluminum added USD 1 up to 1715 USD/t. Nickel retracted with USD 50 to 12 000 USD/t. Tin became expensive with USD 125 up to 8625 USD/t and zinc – with USD 17 up to 1037 USD/t. Lead’s price reduced with USD 1 to 711 USD/t.
Source: Pari (26.04.2004)

Poland announced a tender for sale of 31.5 per cent from Impexmetal – the state-owned company for trade with metals, evaluated at total amount of USD 92 million – over 6 times more than its crash in 2002.
Source: Pari (26.04.2004)

A decline of 6-8 per cent registered the complex of the non-ferrous metals on LME in comparison with the former week. The successful higher USD/EUR rate and the signal that the economic growth of USA can be reined, prompted the investors to sales. The current situation is completely the same as the former one, when the USD was very weak and the optimism for economic growth was huge and this was the reason for the investors to spend their funds for metals. A major role played the statement of the Chairman of the Federal reserve of USA before the General economic commission of the Congress. He said that the time of the higher interest had come since the economic growth was quite energetic and this would make the US dollar even more expensive.
Source: Capital (26.04.2004)

More than 10 years ago TK Metalni konstruktzii took part in the construction of the military town in Oreshkovo, Russia. The company constructed a trade building. The object is Russia was finalized in 1995 and the company remained a debtor to the workers for done but unpaid works. The amount then was USD 732 000. During the years were made different schemes for payment since the company did not have so much money. The workers started to file labour lawsuits in 1995-1996 when they realized that they would not receive their salaries. Meanwhile there were strike activities before the Ministry of Regional Development and Construction. Over the period 1997-2000 was developed the following scheme for payment of the salaries: the Ministry transferred to Metalni konstruktzii holding SP JSC a part of the fixed tangible assets. The holding sold the fixed tangible assets and with a part of the incomes paid working salaries. In this period on different schemes were paid about USD 230 000. In March 2001, a little before the consecutive Parliament elections, the scheme was ceased. The company started to take credits from different banks and guaranteed them through the fixed tangible assets of the company. The mechanism did not work out and the company began to sell fixed tangible assets TK Metalni konstruktzii possesses a hostel, a building, in which is situated the very company and the production base in Kremikovtsi. Now at the company are employed 10 people. However, one of the most serious problems for the company remains the incapability to take part in tenders in accordance with the Public procurements Law because of the accumulated debts.
Source: Capital (26.04.2004)

The total indebtedness of Bulgarian corporate sector reached around BGN 40 billion, which is significantly above GDP and is quite worrying, Mr. Bojidar Danev, Chairman of BIA said at a seminar in Veliko Tarnovo. 30 per cent of this amount is inter-company indebtedness, which is growing with 12-20 per cent annually. This, according to Mr. Danev, is an indicator, that there is something wrong in the economic laws. He gave as an example the Medical Drugs Ordinance, which stipulates for the supply of drugs without them being paid. Mr. Danev said a long time ago BIA proposed the establishment of clearing houses with the state insitutions or with the private business. Currently, BIA is preparing a web-page, through which the debts could be traded. This is one of the ways to solve the problem of inter-company indebtedness, Mr. Bojidar Danev said.
Source: Pari (27.04.2004)

European Steel Industry gained from the growing demand of steel over the past two years. Nevertheless, the companies operating in the branch are nervous because they do not know how long this favourable market situation will last. There are fears the high prices, which almost doubled for some types of steel, won’t be maintained in the long-term perspective. A lot of metallurgical companies had to increase significantly their production costs with a view to the higher prices of the used iron ore. This trend will probably continue to press the marges of their profits. The hidden tension among European producers became obvious when Rautaruuki (a Finland-based medium-sized metallurgical company, specialized in the production of materials for the construction sector and developing a large-scale business in Eastern Europe) revealed its financial results for the fourth quarter of 2003. Revealing big profit, Rautaruuki indicated almost the complete growth of world production in 2003 was achieved due to the higher production and consumption in China. Meanwhile, European demand remained flat. The quotes of the shares of European metallurgical companies are going up, regardless of the increasing steel prices, but they are still behind those of companies, operating in other world regions. According to the investment bank UBS, producers were somehow surprised by the increased number of orders in the beginning of this ear and the new market situation also impacted the change in the adjustment of the world steel leader – Luxembourg-based Arcelor. While over the past two years the company’s CEO Guy Doll was playing the role of an obscure seller, who was constantly warning that major steel consumers (construction and automobile industry) were not in shape, now he is in a much better mood and he himself forecasted a 1-2 per cent growth in European economy. Europe is the most important consumer of Arcelor’s production, which is supposed to reach 42 million tons this year. Company representatives predicted the production capacities in Europe would grow significantly in 2004. Even the British-Dutch Corus – world’s sixth largest producer, which suffered greatly from the expensive British pound against the euro over the past 3 years, is hoping for a better year 2004. Corus has been losing an average of over EUR 2 billion a year since it was established through the merger of British Steel and Ducth-registered Hoogovens in 1999. The French side’s Executive Director is moderately optimistic about the company’s results this year, considering the big demand and high loading of its production capacities. The perspectives ahead of Sweden-based SSAB (producer of special steel products) are also improving. It expects higher demand in 2004 compared with last year. Another challenge ahead of European steel producers are their big plants, which are turning into a threat to the environment. They are using a lot of energy carriers and thus further the increase of the temperature on Earth. Another indicator of the danger European metallurgy is facing, is the news, related to Germany’s biggest steel producer – ThyssenKrupp, which recently announced the solid investment in a high blast furnace in its plant in Duizburg, which is actually one of world’s largest, will be frozen in the near future, since it could not meet EU requirements for carbon dioxide emissions.
Source: Pari (27.04.2004)

The American metallurgy has been transforming during the last 2 years, owing to the consolidation and improvement of the financial state of steel-extraction sector but probably the most important change is the so-called Chinese factor. The two pillars that sustained the industry’ efforts, are the functioning for 2 years now duties, with which the import was imposed, the change in the Bankruptcy Law that allowed the acquisition of insolvent assets and the shrunk expenditures for social insurance of the workers in the acquired companies in the American metallurgy. The permanent demand of steel by China made the country a chief player on the global market. This causes some problems on the American steel-extraction industry that points 84 per cent of the produced 120-125 million tons per year there. According to Mr. Loyd O’Carol from BB&T Capital Markets this trend in the sector is extremely improper at the moment since the leading role in the metallurgy today is for China. The American industry is regrouping to a high degree during the last 2 years but the prices’ formation, the demand and supply beyond the ocean can’t remain isolated by the market conditions in the world and mainly in China, the major engine for the boom in the world steel-extraction industry. Since 2002, when the President Mr. George Bush introduced duties on the cheap import, the American metallurgy has been favoured by the restricted import. However, the President required from the sector to restructure. At the moment the big players in the metallurgic sector beyond the ocean are the giants US Steel, Nucor and International Steel Group /ISG/. The three companies became bigger after 2002 when approximately 40 local companies were sinking. In 2003 the acquisitions and mergers in the US metallurgy reached USD 4 billion, which is 2 times more in comparison with 2002. Just for comparison, in 2000 were not realized any like these deals in the fragmented then industry. US Steel with capacity of 19 million tons flat-rolled steel per year is N 1 beyond the ocean. It bought the bankrupted National Steel, the fifth by size metallurgic company in USA. Nucor, known as the corporation with low costs, acquired the competitor Birmingham Steel. ISG was created by the financial expert Mr. Ros in 2002, owing to a purchase of the assets of LTV. It became the second by size producer through the acquisition of Acme Steel and Bethlehem Steel, even more – the company is ready to exceed US Steel after buying Weirton Steel. The other two companies in the league of the five biggest are AK Steel and Ispat Steel, which is included in the structure of LNM, the second by size producer of steel in the world. The enlargement, done by US Steel, ISG and Nucor, increased the share of the five top steel-extraction companies in USA from 43 in 1997 to 58 per cent in 2002 and the per centage continued to increase, according to data of FTN Midwest Research. The higher share, especially of US Steel, ISG and Nucor has a positive effect on the steel prices’ definition. First, they receive a bigger priority at the dealing of the prices with some more cautious final big consumers, such as the consumers from the automobile industry. Second, thanks to the consolidation, from the game dropped out small producers that attempting to keep in the business or to avoid a liquidation or bankruptcy, sold at extremely low prices or at almost production prices. The bankruptcy of many American companies followed a period of drastic low prices of the steel, started in the end of 90’s and continued until 2002. It was preceded by a recession in USA in combination with a rush of cheap steel products. Washington tried to support the down and out sector and introduced duties in March, 2002 with the intention for restriction of the import from other countries that sent their surpluses to USA. In November the duties were defined by the World Trade Organization /WTO/ as incorrect and Washington postponed them during the next month – quite earlier than the preliminary plans, in order to be avoided the trade war with Europe. Meanwhile the steel’s prices considerable increased. The analyzators forecast to reach their peak as of the middle of 2004 when the Chinese consumption reduces and the foreign companies point their production again to USA.
Source: Pari (27.04.2004)

The biggest diversified mine-extraction company in the world - BHP Billiton registered record extractions for the first quarter of nickel and aluminum and higher manufacture of almost all extracted raw-materials. The company explained the success with the permanent orders from China. The British-Australian group made higher extractions of nickel with 14 per cent /21 000 tons/, while the aluminum production jumped with 25 per cent up to 333 000 tons. Last month BHP approved a project in amount of USD 1.4 billion in Western Australia, owing to which is going to increase the nickel extractions from 85 000 tons up to over 130 000 tons per year, which is equal to 12 per cent of the global consumption at the moment. BHP extracted with 4 per cent more copper or 240.6 thous. tons. The company intends to enlarge its copper capacities and to invest USD 870 million in enlargement of its production in Escondida, the biggest copper mine in the world, with 15 per cent as of the end of 2006. The produced iron ore by BHP increased with 22 per cent on annual base up to 21 million tons. The increase is stimulated by the higher consumption of China. The group won a deal for USD 9 billion for delivery of 12 million tons ore during the next 25 years for the needs of the Chinese steel-extraction. Over 10 per cent of the incomes of BHP are registered namely by the export to China.
Source: Pari (27.04.2004)

The non-ferrous metals registered higher price rates yesterday. The three-month copper deals were concluded with 18 USD/t higher in comparison with Friday, i. å. at 2730 USD/t. Since the summer is quite near, there is a great probability of selling offs that may crush down the metal to 2600 USD/t. Aluminum became expensive with 10 USD/t up to 1725 USD/t and zinc stabilized at levels with 12.50 USD/t higher or at 1049.50 USD/t. Lead added 4 USD/t to its prices and nickel became cheaper with 100 USD/t to 11 900 USD/t.
Source: Pari (27.04.2004)

Zinc, which recently was traded at a price of 1105 USD/t – record price as of the last three years, is already sold at a price of 1025 USD/t, confirming the expectations that the supply, which exceeded demand will lead to drop in the prices of the metal. At the moment the inventories have reached their highest levels since 1995. Experts expect that the price of zinc will reach 950 USD/t. At the same time Chinese and American consumption, which showed a growth of 7.09 per cent and 3.2 per cent, will lead to a deficit during this year. At a level of world consumption of 7.3 million tons of zinc Australia&New Zealand Bank expected a deficit of 94 000 tons as of 2004. Meanwhile the world leading producer - the Canadian company Teck Cominco reported a growth of nearly 12 times of its profit as of the first quarter. The profit reached CAD 71 million. During this period the company produced 146 000 tons.
Source: Pari (28.04.2004)

Nickel has crashed down to the lowest price levels for 6 months - 11 500 USD/t when the former day was traded with 200 USD/t more. The three-month copper deals retracted with new 2 USD/t to 2715 USD/t in spite of the support, caused by a strike in mine N 1 in the copper-extraction complex Codelco. Aluminum became cheaper with 3 USD/t to 1717 USD/t and lead and zinc with 8 and 6 USD/t.
Source: Pari (28.04.2004)

For the first time since 1998, Kremikovtzi registered a net annual profit of almost BGN 120 million. The loss from previous years has been gradually reduced from BGN 170 million in 1999 to BGN 10. 680 million in 2002. The net incomes from sales last year were in the amount of BGN 680 352 million. The average sale price per ton production grew last year, reaching BGN 555 per ton. In 2003, Kremikovtzi’s old debts to NII from the pre-privatization period. They were due in extended payment within a period of 36 months. In the same way, the company reached agreement with NEC and Bulgargas to pay up its debts to these companies in a long-term period at equal monthly installments.
Source: Company information (29.04.2004)

The Management of Kremikovtzi is negotiating with four potential investors that could be strategic partners of the plant, announced the Executive Director of the plant Mr. Valentine Zahariev but refused to point them. ISPAT International, a part of the registered in Great Britain LNM, is interested in the coke-chemical production of the plant. Owner of Kremikovtzi with 75 per cent is Finmetals holding, the rest 25 per cent are state-owned and of minor shareholders. It is quite probable more than 51 per cent of Kremikovtzi to be sold if the company’s interests require this, Mr. Zahariev also said.
Source: Pari (29.04.2004)

An investment program for the stopping of harmful productions and harmonization of the labour conditions in Stomana Industry with the provisions of the Law on Healthy and Safe Labour Conditions has been elaborated in the company. BGN 14.5 million from the company’s 2004 budget will be allocated for its implementation. It is developed on the basis of the analysis for working accidents and production breakdowns. In relation to the program for restriction of the use of asbestos, which was stopped from use, a capital repair has been executed, including the replacement of all asbestos-containing materials of the cooling towers. An overall replacement of the asbestos-cement pipes in the company’s water-main, which contain asbestos will be made. BGN 2 million will be allocated for it.
Source: Pari (29.04.2004)

Mr. Zachariev, are your negotiations for strategic partnership with ISPAT making any progress? -There is interest in big companies, which have the potential of becoming Kremikovtzi’s strategic partners. This intention of ours is stated in the privatization contract – we have the right to look for strategic partners and have done this before. Currently, we are leading negotiations with a total of 4 companies for strategic partnership and if Kremikovtzi’s interests make it necessary, we will do it. We may even sell more than 51 per cent of the plant. We do not consider this a sale, neither do we consider this a transaction, we consider it an attempt for globalization. We hope the negotiations will be finalized by the end of the year, although we are free to negotiate until 2005. We may negotiate for sale or share swap with our partner. The process will take some time, we will have to make a number of due-diligences, and in some 4-5 months the actual negotiations will start. We hope that by the end of this year, we will be a part of the large family of the world’s united steel companies. Kremikovtzi cannot stay aside from the global economic processes. Since 5-6 years ago, large-scale mergers have been taking place in the branch. Kremikovtzi cannot stay out of these processes, otherwise it will experience a sharp raw material crisis. Coal prices have jumped almost threefold – from USD 60-65 per ton to USD 150-160 per ton at the moment. This shows something is going on in this market. Through the merger of big companies, the raw material market is being controlled. What is the amount of Kremikovtzi’s balance assets? - Kremikovtzi’s balance assets are in the amount of BGN 850 million, and its debts total to some BGN 400 million. But the price of Kremikovtzi is not equal to the difference. It consists of the evaluation of the equipment, markets, the company’s potential to make profit, the amount of the future investments. I cannot tell you what the price of Kremikovtzi will be, because it cannot be calculated using an empiric formula. Can you tell us something about Kremikovtzi’s viability plant? - The European Commission demanded Bulgaria to provide a plan for its steel companies viability. The plan for the period until 2007 has already been adopted by Government decision. The investment plan, included in this program, is the same as the privatization contract. The fact that there are arguments with PA is a different thing. The production capacities will gradually be reduced. When the Government of Ivan Kostov granted BGN 183 million to the state-owned company Kremikovtzi, the money were not included in the privatization contract as state aid. In October-November 1999, following the plant’s privatization, Ministry of Finance registered it as a state aid. The state aid is forbidden in EU’s steel industry because of the branch’s sensibility, and since 1998, Bulgaria is an associated member of the union and the state does not have the right to grant aids to the companies operating in the branch. Kremikovtzi must prove its viability through cutting its capacities. One blast furnace and three rolling looms will be physically destroyed. A part of Kremikovtzi will be turned into scrap. According to experts’ evaluations, this capacity reduction is far bigger than the state aid Competition Protection Commission acknowledged – BGN 392 million. Kremikovtzi’s losses after the stopping of the capacities have been calcualted to USD 340 million. There is disparity between the amount of state aid and the amount of restrictions. EU does not mind the plant to receive a new state aid covering the difference the day the viability plant is accepted. The final evaluation given in the plan is that the plant is viable. Consequently, this plan became a part of the general plan for steel industry restructuring (including Stomana Industry and Promet Steel – editor note). Why did you ask for the challenging of Mr. Ramadan Atalay? - We were forced to do that. Mr. Ramadan Atalay is Chiarman of the Temporary Parliamentary Commission investigating the accidents in the plant. We do not want to interfere in the work of the state organ. We aim to show that the decisions of the commission are prejudiced. What is happening with the arguments between Kremikovtzi and PA? - They are being settled in court. We’ve been leading legal disputes for the year 2001 – we made significant investments back then (totaling to BGN 400 million), and Post Privatization Control Agency acknowledged only BGN 220 million of them. We are arguing about another BGN 180 million as well. PA imposed a sanction of BGN 5.2 million for non-execution of the 2001 investment program. Kremikovtzi has its own project unit. Post Privatization Control Agency does not acknowledge the investments made in economic way. And if we assign the order to a third party, for example Metalurgproject, they will acknowledge the order as an investment. What are the company’s 2003 financial results? - For the first time since 1998, Kremikovtzi has registered a net annual profit of BGN 120 million. We have paid taxes in the amount of BGN 9.5 million. The operational profit reached BGN 39 million, and the rest of it is re-evaluation of the company’s assets according to the National Accounting Standards requirements. Gradually, the loss of BGN 170 million, registered in 1999, has been reduced to BGN 10.680 million in 2002. The annual incomes from sales of metal are for BGN 680.352 million, and from sales of products thereof – BGN 20 million. In 2003, the average number of employees in the plant was 7930 people with an average salary of BGN 604. The salaries are paid with a 15-day delay. The average selling price per 1t of produce is BGN 555. 100-105 000 tons have been produced. 85-90 per cent of the products are exported, chiefly to the European market, but we have exports to China and USA as well. Where are you going to invest the profit? - The General Meeting of Shareholders will make this decision, we may use it to cover losses from previous years.
Source: Pari (29.04.2004)

Arcelor, the world steel giant, was established in 2002 in a grand merger between three European companies – France’s Usinor, Spain’s Arceralia and Luxembourg-based Arbed. In 1999, the world’s sixth biggest producer was associated – Corus, following the merger by UK-based British Steel and Dutch Hoogovens. Thussen Krupp Stahl was set up in 1997 as a result of the joining of the two big German companies Thussen and Krupp. US-based ISG, which is on the way of moving US Steel from the number one position in USA, was established in 2002 through the merger of the assets of LTV, Acme Steel and Bethlehem Steel and is currently preparing to acquire Weirton Steel.
Source: Pari (29.04.2004)

High copper prices will be one of the moving forces for the raising of copper production and processing amounts in the period until 2007 without worrying consumers, International Copper Study Group said in London. Specialists forecasted over the period 2004-2007, copper production would be expanding with some 2.2 million tons annually, instead of the initially expected1.67 million tons. In the beginning of the year, copper prices reached their 8.5-year peak of 3055 USD/t at LME, and later on were down to their 2.5-year minimum of 2665 USD/t . ISCG forecasted production capacities would grow with 38 per cent helped by the new metal production methods. No additional processing capacities would be necessary. Temporary decommissioning of some productions is even expected. According to specialists, production capacities would shrink with some 285 000 t annually, which is significantly lower than the 765 000 t capacities closed a year ago. The surplus capacities are in the amount of 402 000t for the initial processing and 572 000 tons for the refineries. Nevertheless, until 2007, increase of the capacities for processing of copper concentrate is expected. They will be growing with some 1.35 million a year, and the processing capacities – with 1.44 million tons.
Source: Pari (29.04.2004)

On Wednesday on LME the copper on the 3-month deals retracted with USD 82 from the quotes at the closing on Tuesday to 2650 USD/t and headed to the 11-week minimum of 2627.50 USD/t as of February 11. Aluminum also retracted with USD 73 to a new 5-week minimum of 1661 USD/t. Nickel lost USD 270 and traded at 11 185 USD/t. Lead became cheaper with USD 27 to 705 USD/t and zinc – with USD 18.50 to 1031 USD/t. Tin traded at 8660 USD/t from 8725 USD/t.
Source: Pari (29.04.2004)

The only aluminum plant in Romània Alro will raise its production with 3.5 per cent from 198 thousand tons in 2003 to 205 00 tons in 2004 of high quality aluminum products, which will help the company to successfully compete on the European market. The plant, which was privatized in 2002, continues to export around 2/3 of its produce to Europe. It expanded its range with high-quality and high-added value products, such as aluminum slabs and bars of different diameter. In the first quarter, Alro had a turnover of USD 105 million – 50 per cent premium to the same period in 2003. Its profit grew to respectively USD 16 million from USD 11 million in 2003. From the bottom of 1255 USD/t in November 2001, in the middle of April this year, LME aluminum prices grew to their 8.5-year peak of 1831 USD/t. Alro was privatized by US-based Marco International – a company trading non-ferrous metals. The local company Conef has a small stake in Alro. Marco also controls Alprom – a Romania-based supplier of raw materials for Alro.
Source: Pari (29.04.2004)

International Lead and Zinc Study Group (ILZSG) announced in its 2004 Q1 report that the global demand of refined zinc is expected to grow 3.5 per cent this year, reaching 10.1 million tons and will exceed world production with some 100 thousand tons. The main reason for the deficiency will be the increased consumption in Asia, and chiefly in China. World zinc production will grow with 1.7 million tons reaching 10.0 million tons. Lead demand will also increase through the year with 1.6 per cent and will be in the amount of 6.9 million tons because of the higher consumption by rapidly developing Chinese industry. World lead production will drop with 0.4 per cent to 7.0 million tons.
Source: Pari (29.04.2004)

Besttechnika TM – Radomir is operating in the field of manufacture of rolled iron looms, blast furnaces and spare parts for the ferrous and non-ferrous metallurgy; manufacture of cement mills, equipment, installations and spare parts for the chemical industry, as well as machines for the energy industry, mining and coal extraction. The company is also manufacturing machines for some other economic branches. The company has no competitors in Bulgaria in respect of its production capacities, and for some of its products it competes with companies such as Vaptzarov – Pleven, Chimmach – Haskovo, Cherno More – Varna, and ZMM Stomana – Silistra. It has some foreign competitors as well. In 2003, the company generated incomes from sales in the amount of BGN 2 million, and with some other incomes, they total to some BGN 2.5 million. Just for comparison, in 2002, the company’s incomes from sales were in the amount of BGN 7.158 million. The relative share of export dropped to 9.72 per cent last year from 28.30 per cent the year before. The enterprise’s production, warehouse and administrative buildings are located on a total area of 841 thousand sq.m. In 2003, its average listed personnel was 295 people, which is half its number in 2002. The average working salare in 2003 was BGN 269. According to the company’s balance, presented in the Bulgarian Stock Exchange, last year it registered a loss of BGN 1.955 million, which grew from BGN 1.334 million in 2002. This bigger loss is a result of the merger of the shrinking production output and the reduced incomes from sales. Besttechnika TM-Radomir’s liabilities as of December 31 2003 were in the amount of BGN 17 million up from BGN 14.67 million in 2002. Most of them are short-term, chiefly to suppliers and clients, to the tax authorities and insurance institutions. As of the end of last year, the company owes BGN 1.629 million to banks. Bestechnika TM-Radomir had short-term receivables for BGN 2.9 million in the end of 2003, and the material inventories were to the value of over BGN 9.5 million. The capital of Besttechnika TM-Radomir is in the amount of BGN 1.756 million, distributed in ordinary, paperless shares with a nominal value of BGN 1 each. It is 96.35-per cent privately owned. The main shareholder with 79.03 per cent from the capital is Besttechnika & Co. Ltd. – Sofia. The rest of the shares are owned by other legal and physical entities. The shares of Besttechnika TM-Radomir are traded at the Bulgarian Stock Exchange – Sofia, and the latest contracted deals were at a price of BGN 1.50 per share, dated February 16. After yesterday’s session at the Exchange, the shares are offered at BGN 1.05 per shares, but there is no interest in them.
Source: Dnevnik (30.04.2004)

The scope of companies, which will benefit from the reduction of the amount of corporate profit tax is too limited. These are the so-called big tax payers, which will share the lion’s pie from the reduction of profit tax from 19.5 per cent to 15 per cent. Those which will benefit the most are mainly large companies with foreign capitals or having foreign investors. Obviously, the saved money will go overseas.
Source: Cash (30.04.2004)

Jinan Iron and Steel Group, the Chinese steelmaker, is planning an extensive capacity expansion over the next few years, despite government fears of overheating in the sector and in the wider economy. Wen Yanming, executive general manager, said the group also hopes to raise up to Rmb1.8bn ($218m) by issuing shares on the Shanghai stock market and to list a Malaysian subsidiary in Kuala Lumpur. The scale and speed of expansion in China's steel sector is likely to have important implications for steelmakers worldwide. For example, Baoshan Iron & Steel, China's biggest steelmaker, told the FT this month it plans a 50 per cent increase in capacity to 30m tonnes over the next five years. Mr Wen said in an interview with the FT that Jinan Iron expected annual production capacity to reach 8m tonnes of steel this year from 4m tonnes in 2002. The company aimed to raise capacity to about 10m tonnes within three years. Senior Chinese leaders have warned against over-investment in the rapidly growing steel sector, but Mr Wen said calls for tighter bank lending policies and administrative controls were having no impact on Jinan Iron's plans. The company was aiming to produce more high-value products such as hot and cold-rolled strip that were still in short supply in China, and its investment was "as one" with government policy, he said. "The government cuts or limits improper projects, but it encourages healthy ones. We belong to the latter," Mr Wen said. "Companies without scale are companies without competitiveness." Jinan Iron's optimism is founded in part on soaring demand for relatively sophisticated steel products from farm and heavy vehicle manufacturers in its home province of Shandong. While Mr Wen forecast prices for high-value products to remain strong in China over the next four years, he said prices of more basic products such as heavy steel plate were already falling. With international prices for some products climbing above Chinese levels, Jinan Iron - China's number two steel exporter after Baosteel - is stepping up overseas sales. Mr Wen said exports in all of 2003 amounted to about $160m, adding: "This year we expect to reach that figure in the first half." The company's plan to list on the Shanghai stock market was being studied by the National Development and Reform Commission, China's former state planning bureau, in Beijing. It has passed one department in the NDRC and needs to clear two more before it wins approval, Mr Wen said. Jinan Iron is also using cash from its 38,000 employees to help fund its expansion. (source: FT)
Source: Other (30.04.2004)

The regular General Meeting of the Branch Chamber of Ferrous and Non-ferrous Metallurgy was held on April 29 2004. The 2003 report of the Chairman of the Chamber was adopted, as well as the report of the Control Council about the company’s incomes and spendings. The General Meeting adopted Directions about the work of the Chamber in the current year. The forum elected a new Managing Board consisting of the following 10 members: Kremikovtzi JSC, TePro Metal SP JSC, Umicore Med JSC, KCM JSC, Zhiti JSC, Shamot JSC, Eurometal Ltd., Metalsnab Holding JSC, Precise Inter Holding JSC and Prof. Avramov (representative of the Union of Veterans in Metallurgy). Immediately after the General Meeting, the first session of the newly-elected Board of Directors was held, which re-elected Mr. V. Zachariev as its Chairman (Chamber of Metallrugy).
Source: Other (30.04.2004)

Foreign Direct Investment (FDI) was down to 47.8 mln euro in January-February 2004, as compared to 142.3 mln euro a year ago, on lower external crediting, the balance of payments of the central bank showed last Friday. Non-residents did not reinvest any profit in January-February 2004 while non-privatisation equity investment was down y/y. During the period there was no capital on privatization deals attracted, similar to 2003. The biggest amount of the investments attracted during the period came from Netherlands, Greece and the USA.
Source: Dnevnik (03.05.2004)

Some fears that tight credit control in China may restrain the extremely high metal demand by local consumers impacted copper quotes, which were down 5 per cent this week. The prices of other non-ferrous metals were also down at LME. According to analysts, the news from China were only a catalyst for the cheapening of non-ferrous metal prices, which were to go down anyway, pressed by a series of events over the past two weeks. These events started with the comments by the Chairman of the Federal Reserve in USA – Mr. Alan Greenspan and caused a leap in the USD rate. “I think some world investors withdrew from the commodity sector generally”, Ms. Ingrid Sternby – metal market analyst from Barclay’s Capital, commented.
Source: Capital (03.05.2004)

Almost all kinds of investment projects in China including those of steel, aluminum and cement production as well as office building, golf course, urban railway, exhibition center and shopping mall construction are undergoing a nationwide check-up and many may be halted this year. The State Council, the Chinese central government, recently issued a circular requiring all localities and departments to kickoff examinations of most investment projects in fixed assets under construction or to be built. Those projects banned by national policies or conflicting with laws and regulations on land management should be halted, whereas those not in compliance with environmental protection norms, urban construction blueprints, approval procedures or loan policies should be suspended, according to the circular released by the General Office of the State Council. All projects that started in 2004 excluding some agricultural, ecological educational, health and science projects should be checked, the circular said, stressing that projects of over-investment and low-level repeated construction with consumption of huge energy, water, materials and great pollution should be firmly stopped. No new projects of steel, aluminum and cement would be approved this year, the circular said, acknowledging that some projects in agricultural, ecological, infrastructure and social fields would still be supported. The fixed assets investment rose 26.7 percent in 2003 from the previous year and the growth rate of the steel, aluminum and cement industries almost doubled, official figures showed. (èçòî÷íèê: Ñèíõóà)
Source: Other (03.05.2004)

Efficient cost management is the goal of the first stage of the creation of an integrated business management system in the non-ferrous metal plant. It is expected to end in June with the building of a modern communication infrastructure on a territory of 900 decares and the introducing of 7 modules from SAP/R3. The overall project provides for the optimization of the management processes, and the integrated business management system will cover a total of 12 SAP/R3 modules and the existing specialized systems. Siemens Business Services, SAP Bulgaria, Hewlett-Packard Bulgaria and Stemo are the chief executors of the project.
Source: ComputerWorld e-Daily (03.05.2004)

The workers occupied in some of the main productions in Kremikovtzi JSC stopped working, complaining they had not received their salaries since October. The company’s Executive Director Mr. Valentin Zachariev promised the salaries due would be paid by Wednesday.
Source: Trud (04.05.2004)

The Director of the Bourgas-branch of Sofia-registered Metalsnab Holding SP JSC Mr. Valentin Mihalev died in a car accident near Bourgas. The accident happened around 17 p.m. in the region of the cemetery park on the main road Bourgas-Varna. The automobile Ford Focus was moving from Sarafovo residential area and went out of the road. The car self-ignited in the crash. The 48-year old man burnt in his car. According to preliminary information, the reason for the accident was high speed. The Bourgas Regional Interior Directorate did not release information about any other casualties. Currently, the place of the accident is being inspected. Metalsnab Holding SP JSC is registered in Sofia, 1 Vladaysko Vastanie Str., It operates in the field of electrical equipment, electrical materials, sanitary materials, terracotta, dyes, lacquers, etc. distribution.
Source: Darik Radio (04.05.2004)

Prime Minister Mr. Simeon Sax Cobourg announced at a meeting with the citizens of Belene the Government decision for the building of NPP Belene. “This is the biggest investment project in Bulgaria over the past few decades and the Council of Ministers will select the investor for the implementation of the project by the end of this year”, Mr. Sax Cobourg said. NPP Belene was also one of the topics, discussed at the meeting of the Council of European Integration at Council of Ministers, held in Vratza.
Source: National radio (04.05.2004)

On May 3 Sofia City Court decided to block the shares of the major owner of Kremikovtzi JSC – Finmetals holding. The case has been initiated by the Post-privatization control agency for non-execution of the investment programme for 2000-2001. According to the agency data in 2000 and 2001 in the plant were not invested USD 50 million per year as it was set in the privatization contract. According to the contract, the engagements for total investments for 5 years are USD 300 million. The Management of Kremikovtzi refused to comment. According to PARI sources, the case was initiated by the team of the recently dismissed Director of the agency Ms. Aksinia Slavcheva, who permanently pointed Kremikovtzi as one of the biggest breakers of the privatization contract. The company sues the State for latent debts in amount of USD 200 million that were found out in the plant after the deal. Lawyers, acquainted with the agency’s practice, specified that it is able to impose a veto on Kremikovtzi owner in order for the company’s shares. This would seriously confuse the plans of the owners of Kremikovtzi to sell the major stake to a strategic investor.
Source: Pari (05.05.2004)

In Tzigov chark district was turned the first sod for the construction of the roads, included in PHARE Roads programme for access to tourist object. The value of LOT 1 is EUR 3.105 million and includes 6 segments with total length of 42 kilometres. The six segments are in Smolyan, Haskovo and Kurdjali regions. LOT 2 includes 3 segments with total length of 32 kilometres in Pazardjik region. Their value is EUR 3 275 000.
Source: Pari (05.05.2004)

Vratza region will be granted EUR 900 000 for execution of projects which will provide work for the dismissed employees of NPP Kozloduy. On April 1, the UK Government okayed the start of a joint project with Bulgaria, according to which EUR 300 000 will be provided this year. The project will be implemented two years ahead of the measures for liquidation of the consequences from the closing of I and IV unit of NPP Kozloduy, planned by EU. A working meeting was held in the town’s regional administration with the participation of 4 representatives of the British-Bulgarian consultancy company New I, authorized by the UK state to work under the project.
Source: Pari (05.05.2004)

PA decided to sell 100 per cent of the capital of Eliseina SP JSC at an open-bid tender. The initial tender price is BGN 10 000 and the bidding step – BGN 1000. The deposit for participation is BGN 100 000. The price on the contract will be paid through a bank transfer by the following way – 50 per cent on the day of sign of the contract and the rest within 20 calendar days. The property on the shares will be transferred after payment of the debts of Eliseina together with the accumulated interests in two months period as of the date of conclusion of the sale contract. According to non-official data, the debts of Eliseina are about BGN 16 million. From them BGN 2 million are debts to the State Receivables Collection Agency. The company’s activity is flotation of copper ores, manufacture of black copper and articles of non-ferrous metals.
Source: Dnevnik (05.05.2004)

According to Deputy Minister of Transport and Communications Ms. Sofia Kasidova, quoted by Reuters, the second Danube bridge near Vidin should be completed by the end of 2007. No later than February 2005, Ministry of Transport, assignor of the project, will sign a contract with a big construction company. On May 7, the Ministry announced the first one of the two tenders for the building of the facility – for design and construction. The tender for election of supervisor is expected soon. Companies from all EU member states, as well as companies from Bulgaria, Romania and Turkey, will take part in the competition. The deadline for submission of offers is June 14 2004. The tender commission will make the so-called short-list of 8 companies, which will later be approved by the European Commission. The value of the project is EUR 223 million.
Source: Pari (10.05.2004)

Direct foreign investments in Bulgaria for January and February, 2004 are totally USD 60.1 million or 0.2 per cent of GDP. This is with 60.5 per cent less than the attracted investments during the first two months of 2003, evaluated at USD 152.1 million. The biggest investors in the State for the two months are Netherlands - 26.3 per cent, Greece - 8.7 per cent and USA - 6.9 per cent.
Source: Banker (10.05.2004)

The biggest company for manufacture of aluminum in the world – the American Alcoa is going to buy the two biggest companies for processing of the metal in Russia – Samara and Belaia Kalitva. The deals are a part of the company’s strategy to get use of the expected growth of 8.1 per cent in the demand of aluminum during the current year. According to the agreement, the US company will acquire two huge plants with 14 000 employees from the biggest Russian producer of aluminum Rusal. The companies, object of the deal, process aluminum for the needs of the industrial, transport and packing companies. At the moment they are working only with 38 per cent of their capacity. During the last year they provided 25 per cent of the consumption of the metal in the countries from the former USSR. Analyzators from the branch reveal that the American investors will bring in the new companies a know-how for making of aluminum products for the cosmic rocket-construction. The production will be pointed to the markets of Asia, Europe and America. The purchase of the two companies will be finalized within June 30, 2004 and this is one of the biggest investments in the metallurgic sector in Russia. The financial aspects of the deals are not specified since the government approval is still waiting. Analyzators claim that the Americans are going to pay USD 50 million for the two companies and will invest USD 250 million during the next three years. According to Alcoa, this price is quite reasonable.
Source: Dnevnik (10.05.2004)

One of the biggest producers of precious metals in the world – the Belgian Umicore gave a positive forecast for the performance in 2004 of its Bulgarian plant in Pirdop, in which is major owner. The company also envisages the manufacture of copper to keep at the levels from the former year. Except this Umicore expects to increase the profit from activity with about 78 per cent. The reason for these optimistic forecasts is the higher prices of platinum and silver.
Source: Dnevnik (10.05.2004)

On Friday on LME the complex of non-ferrous metals became cheap, stuck to the trend from the last several weeks. The three-month deals endured the most drastic decrease in comparison with the rest non-ferrous metals. The copper became cheaper with more than 100 USD/t in comparison with Thursday and closed at 2607 USD/t. A little more than one month ago it reached 3055 USD/t. Aluminum retracted with 18 USD/t to 1647 USD/t and nickel ended at 10 940 USD/t at 11 050 USD/t on the former day. Lead crashed with 24 USD/t to 730 USD/t and zinc became cheaper with 25 USD/t to 1034 USD/t.
Source: Pari (10.05.2004)

The fifth by size producer of copper in the world – Peru reached in March a 2-year peak of about 89 000 tons in comparison with the extracted volumes one year ago.
Source: Pari (10.05.2004)

Iran is planning to produce 280 000 tons copper for the one-year period by March, 2005 as a result of the capacities’ expansion at 143 000 tons for the last year.
Source: Pari (10.05.2004)

The biggest ore-extraction company – Brasilian expects to double its export to China and to reach USD 1 billion. China became the biggest client of CVRD in 2003.
Source: Pari (10.05.2004)

One of the biggest metal-extraction companies in the world - RIO TINTO rose its forecasts for the steel consumption in China up to 390 million tons by 2010.
Source: Pari (10.05.2004)

Arcelor SA, the world's biggest steelmaker, posted a record quarterly profit and said second- quarter earnings will rise further as steel prices stay close to nine-year highs and European demand improves. First-quarter net income jumped 22 percent to 234 million euros ($277 million), or 49 cents a share, from 192 million euros, or 40 cents, a year earlier. Sales were little changed at 6.9 billion euros. Luxembourg-based Arcelor plans to boost third- quarter prices by 15 percent for flat carbon steel used to make cars, about twice the rate of increases in January and April.
Source: Other (10.05.2004)

Minister of Regional Development and Public Works Mr. Valentin Tzerovski will open the repair of the road Bourgas-Sliven today. The project is being implemented under the programme Transborder Roads 3, including the rehabilitation of the road sections in the direction of the European Transport Corridors No. 6, 8 and 9 on the territory of the country. It provides for the rehabilitation of the sections under Lot No. 8 of the first class road t-6 Sliven-Bourgas with a total length of 66.5 km. The value of theproject is EUR 6 139 283. 75 per cent of the funds will be granted under the ISPA programme of the European Union, and 25 per cent will be granted by the State budget. After the held international tender procedure for executor of the construction, the selected executor is the Bulgarian consortium PANVIA.
Source: Pari (11.05.2004)

Copper sharply reduced its price to the record low for 3.5 months prices on LME 2530 USD/t. The crash of over 50 USD/t was caused by liquidations of positions of brokers and traders in a moment when the non-ferrous and ferrous metals start to lose the fame of an attractive investment, shadowed by the US dollar. In April copper registered a 8.5-maximum of 3055 USD/t. Yesterday aluminum crashed to the lowest as of the end of December levels of 1680 USD/t and nickel to unseen for 7 months prices. The non-ferrous metals most probably will continue to sink.
Source: Pari (11.05.2004)

The net profit of the biggest producer of nickel and metals from the group of platinum – the Russian company Norilski nikel increased with 82 per cent during the first quarter up to USD 597.4 million.
Source: Pari (11.05.2004)

Sources from the State Development and Reform Commission unveiled that prices domestic steel products, especially those used in construction, fell back remarkably since mid-March. Take wire rods and reinforced bars. Prices of these products are standing at about 3250 yuan per ton and 3440 yuan per ton respectively, more than 750 yuan lower than that in early March. The reasons are believed to include the state government??s efforts on macro-control by tightening money supply and reigning in blind investment and low-level expansion in some overheating sectors, as well as the stronger US dollar and decline of main raw materials prices both in domestic and international markets. The downward movement of steel prices will continue in an even more faster speed. (source: Xinhua)
Source: Other (12.05.2004)

Members of National federation Metallurgy to the trade union Podkrepa in Kremikovtzi did not let in MPs who is investigating the case with the break-down in the plant in January. From Kremikovtzi was explained that the Executive Director and Chairman of the managing Board Mr. Valentine Zahariev tried to collaborate with the MPs but the syndicate did not accept his position. Earlier, the Management of the plant demanded to dismiss the Chairman of the commission Mr. Ramadan Atalai since he had worked as a Director in Kremikovtzi over the period 1992-1995 when Mr. Lilian Vachkov was Executive Director of the plant and both cause financial damages on the plant. The Managers of Kremikovtzi complained that the report was being prepared without any of the Commission’s members to visit the plant.
Source: Pari (13.05.2004)

Pirinhart JSC, Razlog has debts in amount of BGN 405 431 to 78 companies in the country. The companies have delivered paper, wood, foodstuffs and raw materials for the activity of the cellulose factory for months, without payment. In the list of the greatest creditors of the company are Kremikovtzi, NEC Razlog, DS TBO – Simitli, Nevrokop – Gotze delchev, Phenix – Blagoevgrad, Apogey V – Kresna, wood-processing factories Vishteritza – Mesta, Beslet – Garmen, Zenit – Eleshnitza.Pirinhart JSC - Razlog
Source: Struma - Blagoevgrad (13.05.2004)

The energy market is going to be liberalized as of July 1, became clear at discussion, organized by Stomana industry with the participation of BIBA, the Ministry of Energetics, producers and consumers. 10 companies will take a statute of privileged consumers and four stations will receive quotes for their sales.
Source: 24 chasa (13.05.2004)

The market of electricity in Bulgaria is going to be open for competition as of July 1, this year. This was decided after discussion in Pernik-based company Stomana industry between experts from the Ministry of Energetics, from NEC and from companies, which are big consumers of electricity. At first only 10 companies with annual consumption of over 100 million kV/h will be able to choose the supplier of electricity on their own. They are going to deal the prices and conditions directly with the producers. By the end of the year such a right are also going to acquire the companies with consumption of 40 MV/h. In 2007 all consumers will be privileged to deal directly with the producers of electricity, announced Mr. Plamen Popov, who is Director of a department in NEC.
Source: Trud (13.05.2004)

14 companies, among which Agropolichim, Stomana, Umicore and Devnia tziment are going to buy electricity directly from TPS Varna, TPS Bobov dol, TPS Ruse and TPS Maritza iztok 2 as of the beginning of July, announced the Deputy Minister of Energetics Mr. Angel Minev. On Wednesday Stomana industry was a host of the organized by BIBA discussion for the liberalization of the energy market. NEC has already started trainings with the privileged consumers for the opening of the market. According to the decree for the privileged consumers of the State Energetics Regulation Commission, the companies that will have the right to conclude such deals are those with annual consumption of electricity over 100 GV/h and not having debts to NEC. The deliveries’ confidence should be guaranteed if any company, for example, has a contract with TPS Varna but it can not sell the energy because of a break-down, said the Executive Director of Agropolichim Mr. Philip Rombaut. Representatives of NEC assured the companies that there would be reserved capacities and with the next opening of the market they would be also able to sign reserved contracts with other stations. One of the major problems for us is the request for giving forecasts for the consumption per hour, stated the Administrative Director of Stomana industry Mr. Konstantin Stamenov. He explained that the company’s manufacture is very specific and hardly such a forecast may be given. It became clear that the electric stations could make a discount of BGN 1 for MV/h of the price, offered at the moment. Now the companies are paying BGN 30 per MV/h, plus a fee for cold capacity of BGN 15 and other BGN 12 for transfer fee. The price for transfer is formed by two components, one of which is the reserve of the system, was explained from NEC. If the consumed quantity is more than the declared, the companies are going to buy electricity from NEC, which will be more expensive than the prices of the stations.
Source: Dnevnik (13.05.2004)

Confidence in the Bulgarian economy improved in April, statistical data show. The total confidence indicator rose by 5.0 percentage points, compared with January and reached minus 8.4 per cent, NSI announced. The indicator is the average confidence in industry, construction and retail sale. Consumer confidence was up 3.8 points over the period January-April 2004. The general economic situation in Bulgaria is evaluated as favourable compared with the situation three months ago. The evaluation of the current development of the economic situation as well as for its development over the next 12 months is also positive.
Source: Pari (14.05.2004)

Kozlodui-based company Enemona constructed the building for discharge, warehouse and processing of copper concentrate for the needs of the copper-extraction plant Umicore med in Pirdop. This is the third successfully realized project of Enemona for Umicore med. The amount of the projects is BGN 1.5 million.
Source: Dnevnik (14.05.2004)

The inflation rate in April is 0.3 per cent, was reported from the National Statistical Institute - Sofia. During April, compared to March the prices of the foodstuffs and services increased with 0.4 per cent. Non-food prices held steady, while the prices of flour, sausages and dairy products were lower. The prices of meat and eggs over the review period were slightly up.
Source: BTA (15.05.2004)

10 MPs from the temporary inquiry Commission to the Parliament inspected the labour conditions in the different productions of Kremikovtzi. The report of the Commission should be ready by May 20, announced its Director Mr. Ramadan Atalai. The MPs were allowed to visit several production units. Several days ago their visit was spoiled by syndics who protested against eventual closing of Kremikovtzi.
Source: Sega (15.05.2004)

Kremikovtzi remains the biggest public company in Bulgaria with 2003 registered incomes in the amount of BGN 700 million, according to Top 50 – the second annual survey on the financial results of the companies, traded on BSE-Sofia. The second position in this top list is held by LUKoil-Neftochim with incomes of BGN 463 million, followed by Navigation Maritime Bulgare - BGN 462 million. The same companies are also included in the top rating by profit. In 2002 Kremikovtzi registered the biggest loss and in 2003 became the most profitable company.
Source: Pari (17.05.2004)

Lukoil is raising the prices of gasoline, diesel, gas oil and LPG as of May 16. From now on, gasoline A-92N will cost BGN1326.22 per ton, or 1.17 per cent premium to the previous price. The price of A-95A will be raised with 1.8 per cent up to BGN 1344.74 per ton, and that of gasoline A-98N – with 0.98 per cent to BGN 1367.32 per ton. The prices of diesel and fuel will be increased with 1.52 per cent, and that of LPG – with 3.01 per cent.
Source: Pari (17.05.2004)

In the negotiations with EU on the chapter Agriculture, the Managing Board of Sugar Plants – Gorna Oriahovitza suggested the quote for manufacture of sugar from sugar beetroot for Bulgaria to be up to 50 000 tons per year. According to the Managers’ analyses, if this quote is approved by the European experts, the refinery is going to process entirely own raw materials. The effect will be quite favourable for the encouragement of the beetroot manufacture, providing means of living to the population in the region and for the development of the company after Bulgaria's EU accession.
Source: Monitor (17.05.2004)

The strong demand of steel in China is the major reason for its higher price lately on the world market – up to the highest price levels for 15 years now, was reported from the German Federal statistical office. The prices of some steel products even reached record levels. In April the prices of the armature for steel concrete increased with 86,4 per cent in comparison with December, 2003, of the profile steel – with 22,6 per cent and of the hot-rolled steel – with 16,5 per cent. Except the demand in China, the process of American economy’s boom is causing a pressure on the prices.
Source: BTA (18.05.2004)

In 2003 mine industry, construction and manufacture of metals were the sectors with the most unfavourable labour conditions, according to data of Chief Labour Inspection. 2/3 of over 62 000 violations during last year were made because of bad labour surroundings. The inspectors imposed fines for BGN 2.3 million, from which have been gathered BGN 1.4 million. Varna, Burgas and Blagoevgrad regions are the places with the highest number of violations.
Source: Dnevnik (18.05.2004)

The commodity exchange of the State for the first quarter of the year is BGN 8.1 billion, was reported from NSI. The trade balance continues to be negative and has reached BGN 995.5 million. The deficit in USD is 642.6 million. Compared to the same period of the last year its increase is 74 per cent, was reported from NSI. This is quite natural development of our economy and there is no any reason for trouble, considers Mr. Dimitar Chobanov from the Institute for market economy. He explained the bigger import with the higher manufacture and the crediting, which rises the population’s incomes and therefore the demand of imported goods. The exported goods for the first quarter are for BGN 3.4 billion., which is 5.2 per cent more than the same period of 2003. The import is for BGN 4.7 billion and the increase is 15.8 per cent. The average price of the exported goods was 3 per cent higher in comparison with the first quarter of 2003. It remains almost unchanged for the imported goods. This is owing to the higher prices at which Kremikovtzi, Stomana industry and Agropolichim export their products but not because Bulgarian products have become more qualified or have found higher price markets, explained Mr. George Stoev.
Source: Pari (18.05.2004)

The world manufacture of stainless steel is going to increase with 6.8 per cent in 2004 up to 24.35 million tons, was reported from ISSF. During next year the manufacture is going to jump with other 6.2 per cent up to 25.85 million tons on the background of the extracted 22.8 million tons in 2003, which are with 10 per cent more than the former year. 47 per cent or 11.4 million tons of the world manufacture in 2004 are going to be manufactured in Asia. In Western Europe and Africa will be extracted 9.65 million tons and in America – 3 million tons. The contribution of Europe is calculated at 300 000 tons. During 2005 the manufacture in Asia is going to reach 12.25 million tons and in the Eastern Europe – 350 000 tons. Western Europe and Africa are going to extract totally 10.10 million tons and America - 3.15 million tons.
Source: Pari (18.05.2004)

On LME the sales realized quite a serious pressure on the prices of the traded non-ferrous metals. The three-month copper deals contracted at 2565-2569 USD/t in comparison with 2592 USD/t at the closing on Friday. Aluminum quoted under 1600 USD/t - at 1593 USD/t in comparison with 1615 USD/t in the end of last week. Tin became cheaper with 60 USD/t to 8700 USD/t in spite of the support of market factors. Zinc retracted with 2 USD/t to 1018 USD/t and lead stabilized at 746 USD/t compared to 734 USD/t on Friday.
Source: Pari (18.05.2004)

The biggest producer of nickel and palladium in the world – the Russian company Norilski nikel registered net sales for 2003 in amount of RUB 135.3 billion or at RUB 88.34 billion for the former year. The non-consolidated operative profit is RUB 62.9 billion at RUB 22.95 billion for 2002. The net profit is RUB 36.5 billion.
Source: Pari (18.05.2004)

Montenegro selected the British Midland Resources Holding for a buyer of about 58 per cent of the almost non-functional steel-extraction plant Niksic. The buyer is obliged to invest EUR 30.5 million during the next 5 years. The capacities of Niksic are 300 000 tons steel and 190 000 steel articles.
Source: Pari (18.05.2004)

Inward investment in Bulgaria's industrial sector will edge up by 5.3% in 2004, found an investment sentiment survey conducted by the National Statistical Institute in April. The public industrial sector is expected to ingest 53% more investment this year than it did in 2004 with the bulk of the cash burned up by the energy companies.The public sector is forecast to incur 47% of the overall cost of the acquisition of long-term fixed assets in 2004.Investment in the private sector is seen falling 17% in 2004.
Source: Sega (20.05.2004)

THE OFFER of the European Defence and Space Company (EADS) for replacement of Bulgaria's Mi-17s and Mi-24s with French Puma helicopters is better than the offer of UK-based BAE systems for repair and modernization of the available Russian equipment, Minister of Defence Mr. Nikolay Svinarov announced following negotiations with EADS representatives. Bulgaria has already allocated USD 150 million for the deal. EADS were considered a favourite in the other project of the Ministry of Defense for the modernization of the airplanes MiG-29, but were ousted by Russia’s RSK MiG. The current offer made by EADS is better than the one made by the company in December, Mr. Svinarov said. In December, Ministry of Defence’s expert group indicated BAE Systems as a preferred executor of the order for repair and modernization of the helicopters Mi-17 and Mi-24.
Source: Pari (20.05.2004)

The biggest producer of copper in Europe – the German company Norddeutsche Affinerie forecasts quite favourable prospectives for the red metal in 2004 and higher consumption, which will stabilize the prices at higher levels. Norddeutsche with head-office in Hamburg, registered a net profit for the second quarter of EUR 8.9 million. It produced 138 000 tons copper cathodes during the second quarter, with 1 ton less than in 2003 and 269 000 tons concentrate, which is with 25 000 tons more in comparison with the same period of the last year. According to Norddeutsche, as a whole, the copper-extraction companies are earning quite well at the moment. According to the company, only China consumed with 21 per cent more copper during the first 2 months of 2004, the demand in Japan increased with 14 per cent and in USA – with 9 per cent. Meanwhile the seven biggest producers of copper in China are planning to shrink the import of copper concentrate regarding the low fee for processing and the prices on the domestic market.
Source: Pari (20.05.2004)

Copper on LME became cheaper with 15 USD/t compared to Tuesday to 2538 USD/t. It became clear that the fire in one of 12 mines in Kazahmis, a leading producer of the metal in the world, will not be the reason for the lower extractions, which did not allow the prices to increase more considerably. Kazahmis produces over 400 000 tons copper per year. The three-month aluminum deals retracted with 7 USD/t to 1618 USD/t and nickel - with 25 USD/t to 10 775 USD/t. Lead added 16 USD/t to its prices up to 751 USD/t.
Source: Pari (20.05.2004)

The Finnish producer of metals Outokumpu is going to extract 2.05 million tons stainless steel during the present year, which is with 17 per cent more in comparison with the former and in 2005 is going to increase its production with new 7 per cent up to 2.2 million tons. Outokumpu has plants in USA, Great Britain and Sweden and has capacities of 2.1 million tons hot-rolled and 1.2 million cold-rolled steel. The company expects the high demand in China to keep the same for a long-term period, although it may slow down in 2004 and 2005.
Source: Pari (20.05.2004)

Macquarie Bank expects a delay in the growth of the import of iron ore in China of 148 million tons for 2003 by the end of this year. China is the biggest importer of raw-materials in the world and the iron ore is used in the steel-extraction.
Source: Pari (20.05.2004)

The managing board of the Bulgarian National Bank (BNB) rejected on Thursday the suggestion of the commercial banks to charge an interest on the minimum reserves that they are required to maintain with the central bank. The central bankers adopted on Thursday changes to Regulation no.21 on the minimum required reserves (MRRs) in a bid to put at ease the IMF which is worried about runaway domestic lending. MRRs are one of the few tools for monetary policy management at BNB's disposal within the framework of the existing currency board arrangement. After July 1, 2004, MRRs will include resources deposited for a period longer than 2 years and repo transactions (excluding subordinated term debt and hybrid instruments). Resources deposited by other local banks or by the overseas branch of a local bank will continue to be excluded from the scope of the deposit base on which MRRs are calculated. Not so for most of the agreed external credit lines and the increasingly popular mortgage bonds which will be charged 4% MRRs, a rate that could be jacked up to 8% if the measure fails to deliver. Starting in late September, the local banks will also be expected to remit as part of their MRRs obligations 50% of their cash resource. If that measure doesn't work, they could be asked to hand over all their cash holdings. BNB said that even if the request to charge an interest on MRRs was granted, the banks stand to gain no more than 17 mln levs annually. The government is dutifully implementing all restrictive measures agreed with the last IMF mission and has already emptied 300 mln levs from its accounts with local banks. Finance minister Milen Velchev said on Thursday that the money from the National Fund (the pre-accession funds plus the accounts of the tax administration) is still deposited with Bulbank but several options are being considered for its transfer to BNB, a move that must happen by late September 2004. The finance ministry refused to cite the amount accumulated in the National Fund.
Source: Dnevnik (21.05.2004)

BGN 48.6 thousand worth of taxes have been paid through the Internet since this service was first introduced on April 15 , Chief Tax Directorate reported. Most frequently, people use the electronic network to pay their income tax. . So far 122 people have transferred through Internet BGN 33 000 taxes on the incomes from 2003. 1425 citizens and companies have registered to use this service.
Source: Standart (21.05.2004)

The average social security income in the 20 most correct companies, employing up to 15 people, is BGN 989, according to a reference on the most correct insurers in the first half of this year, published by National Social Security Institute. The total number of employees engaged in them is 248. Some of the entities included in the list are the embassy of Switzerland, Prista Oil Trading, BM Leasing, Sony Bulgaria, Coca-Cola Bulgaria, Biochim Leasing Bulgaria, 3M, Solvay-Bulgaria, etc. BGN 216.061 million are the unpaid insurances of the 50 biggest debtors of the National Social Security Institute. The top list is headed by the metallurgic plant Kremikovtzi, followed by Stomana-Pernik, Varna shipyards and Vidachim.
Source: Pari (21.05.2004)

The seven Luxembourg plants of the world’s biggest steelmaker Arcelor were paralysed on May 14 as workers staged a 24-hour strike in protest at plans for massive job cuts, AFP reported, quoting union officials. “At the start of the afternoon, the strike call was heeded by 95 percent of factory hands and 75 percent of white-collar staff at Arcelor,” said union official Josephine Mammola. The strike, the first to hit steel production in Luxembourg since 1982, was called after management announced plans to cut about 1,000 of Arcelor’s 6,000-strong workforce in the country. The company argues that the Europe-wide restructuring, which foresees the closure of one plant in Luxembourg and two furnaces in neighbouring Belgium by 2007, is needed to safeguard its competitiveness. “Industrial sites (in Luxembourg) were shut down on Friday morning for 24 hours as a precaution because of the strike call announced by the trade unions,” a spokesman for the French-Spanish-Luxembourg giant said. Arcelor executive Roland Junck told RTL Leutzebuerg radio that the company’s “opening of talks and willingness to reinforce the Luxembourg operation by strengthening its competitiveness are not affected” by the strike. Source: www.new-europe.info
Source: Other (23.05.2004)

The European Commission recently decided to launch an in-depth probe into restructuring of Poland’s second largest steel producer Huta Czestochowa SA. The probe aims to establish the precise facts of the case and invites interested parties to submit their views. Huta Czestochowa is a well-known producer of steel plate in Poland, which has been in financial difficulties. Poland is currently planning financial measures as regards the company, the Commission said in a statement. The Commission has doubts that the restructuring of Huta Czestochowa has been achieved without state aid. It is seeking clarification whether and what kind of state aids will have been granted up to 2006, the statement said. Protocol No. 8 of the accession treaty on the restructuring of the Polish steel industry prohibits the granting of restructuring state aid to companies not included in it. Poland did not include Huta Czestochowa in Protocol No. 8 of the accession treaty as a beneficiary of restructuring state aid, the statement said. The Commission said it has doubts whether the current operation of the steel production at Huta Czestochowa is achieved without state aid. In addition, the Commission has doubts whether the restructuring of the company meets the private creditor test. The current restructuring plan raises the impression that the winding up of the company was avoided by convincing the commercial creditors to agree to a restructuring plan, the statement said. It appears that state, although in the possession of pledges on the steel assets, did not request liquidation but agreed to write off parts of its debt, the precise amount of which will only be established after the realisation of the sale of assets in the future, it added.
Source: Other (23.05.2004)

The investments in Bulgarian agriculture have reached over BGN 1 billion with the financial aid of SAPARD programme, announced the Executive Director of SAPARD agency Mr. Assen Drumev. On Friday were signed 19 projects in amount of BGN 107 182 898. The total number of the approved until now projects is 1219. For the whole 2002 were approved 248 projects.
Source: Pari (25.05.2004)

Bulgaria's Ekologichen Zavod JSC, a consortium set up between the municipality of Plovdiv and an ex-steel maker, launched construction works on a BGN 37 million waste and garbage processing plant near Plovdiv. The equipment will be supplied by the French engineering company Tecem. The plant will recycle waste and garbage to produce compost with a production capacity of 120,000 tonnes a year. The production capacity may be further increased by 100 per cent if needed. The plant will open 70 jobs. The construction works are scheduled for completion after a year and a half.
Source: Pari (25.05.2004)

Bank Austria Creditanstalt /BA-CA/, owner of Biochim forecasts foreign investments in Bulgaria for this and next year to reach EUR 2.5 billion. For this year BA-CA forecasts EUR 1.3 billion direct investments. The expectations of the Austrian bank for 2005 are the foreign investments to reach EUR 1.2 billion. Bulgaria is going to be at the fifth place during 2004 by foreign investments’ flow among the 11 countries from Central and Eastern Europe.
Source: Pari (26.05.2004)

At the fifth centralized public tender for sale of residual state-owned shares at the stock exchange, which ended in the beginning of last week, investors showed no interest in the stake of Kovashko-presov Zavod JSC – Dryanovo municipality. 7031 of the company’s shares, representing 4.52 per cent of the capital, were put for sale. The initially fixed minimum price was BGN 4.28, the company being one of the few which shares were sold against BGN. There was no interest in the share even after their minimum price fell twofold. The state stake will probably be sold if the shares are released at the next public tender without a minimum pirce. Kovashko-presov Zavod JSC operates in the field of manufacture and sale of mouldings of steel and non-ferrous metals and other services, related to the company’s main activity, chiefly on the domestic market. It has no revenues from export. According to the information memorandum about the company’s sale, published on BSE-Sofia’s web site, its chief competitors are Preskov – Stara Zagora, and VMZ – Sopot. The company has no debts to banks, except for a short-term credit, which was due to be sank in the end of 1995, granted by the bankrupt Agrobusinessbank. The company also owns a building, electricity station and two production units located on a total area of 3 000 sq.m. Its basic technological equipment was put into operation in 1984, but is currently operating using less than 1/3 of its loading capacity. In 2003, the staff was reduced almost twofold to 83 workers, who are paid an average monthly wage of BGN 212. Over the past few years, the plant has been operating at loss, which has grown from BGN 11 000 in 2001, BGN 73 000 in 2002, reaching BGN 209 000 last year. The main reason for the almost double drop in sales (from BGN 1.665 mln in 2002 to BGN 820 mln in 2003) and the smaller reduction in production costs, which last year were for BGN 1.049 mln. The company’s long-term liabilities are for BGN 44 000, and its short-terms ones – for BGN 1.517 mln. Most of them consist of unpaid taxies and debts to suppliers and clients. Nevertheless, the company’s own capital is positive, chiefly due to the company’s total reserves. The net value of the plant’s assets is BGN 4.28 per share. The capital of Kovashko-presov Zavod JSC is in the amount of BGN 155 000, distributed in registered shares of BGN 1.00 each. 76 per cent of the shares are common, 20 per cent – privileged, and 4 per cent – restitution shares, according to the memorandum. The biggest shareholders is KPZ 99, holding 76 per cent of the company’s capital.
Source: Dnevnik (26.05.2004)

Ministry of Economy and Ministry of Finance, as well as PA, are looking for ways of offering Pernik-based plant Kamet for privatization. Ministry of Economy explained their intention was Kamet to be sold as a whole enterprise. Before this is done, the debts of the company under the Law on Settlement of Non-performing Credits (LSNPC) may be canceled. The future owner will also be obliged to serve the company’s former debts (besides those under LSNPC). This means the company will be offered for sale through publicly announced tender. According to Ministry of Finance data, Kamet has non-performing BGN (BGN 16 843 000) and foreign currency (USD 85 824 000) credits under LSNPC, on which the interest due has been calculated. In 2002, following PA request, Commission for Protection of Competition (CPC) also delivered its judgment about the case with Kamet. CPC allowed the company’s debts under LSNPC to be canceled. The decision of the antimonopoly commission, however, did not reach the Government for approval.
Source: Dnevnik (27.05.2004)

Financial Supervision Commission ceased the procedure for listing of Boyana film and Eliseina by a request of Privatization Agency. The reason for ceasing the procedure is that both companies will not be sold by the method of bourse privatization. Boyana film will be privatized at two-stage competition and Eliseina – by a open bid-tender auction.
Source: Sega (27.05.2004)

17 members of the Board of Directors of Canada’s Dundee Precious Metals arrived at the golden deposit Ada tepe near Krumovgrad. Last fall, the company acquired the assets of Navan Mining, which owned a concession for the research of the mine. The Directors had a meeting with the mayors of Krumovgrad municipality and Kurdjali. The local officials expressed their concerns about the ecological balance in the region, in case industrial extraction starts in the deposit. The Canadian businessmen assured them they would observe international standards and would not disturb the ecological balance.
Source: Standart (27.05.2004)

The directors of Bulgaria's Kremikovtsi are in negotiations with metallurgical giant ISPAT over joint management of the steelworks, supervisory board chairman Mr. Bozhko Bonev told the PARI daily. ISPAT officials have stated they plan to invest USD 170 million in the plant. The steel production capacity will rise to some 2 million tonnes a year, compared to 1.2 million t at present. The plant is also planned to supply raw materials to ISPAT's works. Mr. Bonev, however, declined to say if the investment would be connected with the transfer of part of Kremikovtsi's ownership. In early April it emerged that ISPAT was interested in Kremikovtsi's coke production, negotiations were even held with a British-registered Indian company. The executive director of the steelworks, Mr. Valentin Zahariev, confirmed then the company was in talks with four potential investors for strategic partnership, purchase of a stake or exchange of shares. In early May, however, the Sofia city court blocked the shares of Kremikovtsi's majority owner, Finmetals Holding (71%), due to a case filed by the post-privatisation control authority over a default on the 2000-1 programme. This may obstruct the plans of the owner to sell a majority stake to a strategic investor. Meanwhile it emerged the report of the ad-hoc parliamentary commission inquiring into the accident and labour conditions in Kremikovtsi would be discussed after June 15, when Bulgaria is to close the competition chapter of the acquis. Then the idea for cancellation of the deal with Finmetals Holding may again be put on the agenda. ISPAT International is owner of the metallurgical plant Sidex in the Romanian town of Galatz. Its annual project capacity is 6 mln tons of steel. The London trust has plants in the USA, Canada, Mexico, Germany, France, Luxembourg, Ireland, Indonesia, Trinidad. In 1995, it acquired the world’s biggest metallurgical plant Karmet, based in Kazakhstan, which is a copy of Sidex. It also owns metallurgical plants in Poland, Nova Huda in the Czech Republic, the Philippines, Bosnia, Libya.
Source: Pari (28.05.2004)

The transportation of Arsenal-produced weapons by ships owned by Naviation Maritime Bulgaria was forbidden by order of the NMB’s General Director Mr. Hristo Donev. Last month, ship Varna was arrested in Istanbul. On the board of the ship, the Turkish authorities found a container of weapons. According to the container’s documents, it was filled with hunting weapons at Varna port. According to the Turkish authorities, however, the weapons is fighting. For the time being, the container is at port Istanbul and the case is under investigation.
Source: Monitor (28.05.2004)

The chemical plants located in the Devnya area - Solvay-Sodi, Agropolychim, Devnya Cement and Polymeri, are contemplating a cluster configuration, a joint environmental program and shared use of the Varna-West port, a senior Agropolychim executive told an international business forum in Varna on Thursday.
Source: Dnevnik (28.05.2004)

The minimum monthly wage in the Metallurgy branch will be raised from BGN 150 to BGN 180, according to the recently signed two-year collective labour agreement. The additional remuneration for harmful working environment will be raised from BGN 0.06 to BGN 0.12. The remuneration for night shifts has been increased to BGN 0.35 from BGN 0.25. Employee insurance will be differentiated and will depend on the level of risk. In case of death accident, the employer will have to pay additional support to the deceased worker’s heirs, which amount should be no smaller than 5 minimum monthly wages. The collective labour agreement affects 10 000 people employed in 32 enterprises operating in the branch, which accounts for some 8 per cent of Bulgaria’s GDP and 10 per cent of Bulgaria’s export.
Source: National radio (28.05.2004)

The Collective Labour Agreement for the Metallurgy and Production of Metal Products branch will be officially signed in BIA’s session hall. The document will be signed by the Chairmen of Bulgaria’s Ferrous and Non-Ferrous Metallurgy – Mr. Valentin Zachariev, SF Metalitzi with KNSB – Mr. Vasil Yanachkov, and NF Metallurgy with KT Podkrepa – Mr. Tzvetozar Boyanov. Many guests, representatives of the biggest companies, operating in the branch, as well as of the nationally representative employee organizations were invited to take part in the official session.
Source: BIA (28.05.2004)

“Bulgaria and Greece may be to the Balkans a useful union, just like Germany and France are a useful union to Western Europe,” Greece’s Deputy Minister of Foreign Affairs Mr. Evripidis Stilianidis said. He was a guest at the establishing of the Greek-Bulgarian Chamber of Commerce and Industry. Mr. Stiliadis put a stress on the opening of new border check points at the border between Bulgaria and Greece in the near future, on the financing of the modernization of Port Lom using funds under the plan for the development and building of the oil pipe-line Bourgas-Alexandropulis. He announced Solun would apply to become host of EXPO’2008 and promised the exhibition would be of common-Balkan nature, if Greece won the competition. Since 1992, Greece has invested USD 2.8 bln in Bulgaria. This amount includes credits and funds granted by Greek companies, registered in Cyprus, etc., the Chamber’s Director Mr. Panayotis Kutzikos said. He added last year’s investments were in the amount of USD 863 mln. A total of 3400 Greek companies are operating in Bulgaria. They employ 85 000 Bulgarian citizens, Mr. Kutzikos announced. 33 per cent of the Bulgarian bank system is owned by Greek banks. The volume of trade between the two countries, according to the Greek side, is in the amount of USD 1.25 bln, and according to the Bulgarian side – USD 1.48 bln. According to Greek data, Greece is second by number of tourists traveling to Bulgaria last year. They have spent here a total of USD 130 000. Bulgaria’s Deputy Minister of Economy Mr. Dimitar Hadjinikolov explained 500 000 Greek citizens have chosen to take their holidays in Bulgaria. During the forum, different opportunities for banking and investment, as well as for joint infrastructure projects in Bulgaria were discussed.
Source: Sega (28.05.2004)

State-owned companies have formed BGN 216.4 million profit for the first quarter of the year, NSI reported. The biggest share in this financial result – BGN 197.4 million, is occupied by electricity, gas, heating energy and water distribution companies. Companies, operating in the construction branch registered a BGN 2.97 million loss, and those operating in the field of transport, warehousing, and communications posted a BGN 69.3 million profit. Meanwhile, the debts of state-owned companies reached BGN 5.187 billion.
Source: Sega (31.05.2004)

Kremikovtzi is leading negotiations for strategic partnership, purchase of a part of the shares or share-swap with 5 foreign investors. Besides London-registered ISPAT International, some of the other possible partners of the Bulgarian metallurgical plant are a Ukraine-based company, Italy’s Marcegalia, and a European steel group. This was announced by the plant’s Director Mr. Valentin Zahariev yesterday. We are currently in the process of selecting the best offer. One possibility is allowing foreign investors to penetrate the company through shares or property, and another one is to start joint management for a certain period of time. Following this period, we expect to gain from re-investing, Mr. Zahariev explained. During the negotiations with potential candidates, possible increase of the plant’s capacity has been discussed, as well as some ecological projects. The metallurgical plant is quite an attractive company, Mr. Zachariev added. The Director of Ispat International Mr. Pramod Mital and his first assistant Mr. Alok Gupta recently announced they were planning to invest USD 170 mln in the plant’s production capacities. Kremikovtzi’s annual steel production capacity will be increased to 2-2 mln t (from the current 1.2 mln t). Supply of raw materials from Kremikovtzi to ISPAT is also planned. Mr. Bonev did not wish to comment whether these investments were related to transferring a part of the plant’s ownership. On May 3, by decision of Sofia City Court, the shares of Kremikovtzi’s majority shareholder – Finmetals Holding were blocked because of a lawsuit initiated by the Agency for Post-privatization control for non-execution of the 2000-2001 investment program.
Source: Monitor (31.05.2004)

Labour Inspectorates put 50 Bulgarian enterprises under special regime of operation. The measure will be getting tighter, Mr. Totyu Mladenov – CEO of the Chief Labour Inspectorate said. In more than half of the cases, employers cannot stand the heavy procedure and stop their facilities themselves. That is why on July 1 Kremikovtzi’s third blast furnace, which should undergo overall repair, will be stopped from operation, Mr. Mladenov explained. The second blast furnace stopped operating this year, after it functioned under a special regime for 6 months, Mr. Mladenov went on. The Freezing-Ammonia installation of the dairy processing company Serdika 90 JSC is being operated in the same way. The measure has been implemented for the freezing cameras of the former plant Rodopa in Dobrich as well. They should be decommissioned in 2004. The special regime provides for operation with reduced capacity of the machines and equipment under the direct supervision of a labour inspector. A schedule for the removing of all irregularities is being prepared jointly. In case an accident happens over this period, the employer is held responsible. Over the first four months of 2004, the labour inspectorates have stopped 637 machines and facilities. Their number of the whole year 2003 is 1400.
Source: Pari (31.05.2004)

The world’s third largest aluminum producer – RusAL, is to build in Kazakhstan a plant for processing of 500 000t and 1.5 mln t of alumina annually jointly with local Eurasian Industrial Association, thus making a further step to becoming the industry’s number one. The project is valued at USD 3 bln and is the biggest one ever implemented in a country from the former Soviet Union after 1991. The first stage of the project is due to be completed within a year and a half, when 250 000 t of the metal will be produced. In 2003, the Russian giant produced 2.59 mln t and is planning to become the world’s top producer within 10 years by modernizing old and acquiring new assets. For this purpose, RusAL strengthened its presence in one of the key regions – Asia, opening new offices in Tokyo and Singapore (formerly, it had representations in New York and Dusseldorf). China’s government undertook measures for detaining the country’s economic growth, therefore the company canceled its plants to build a 2.37 mln t annual capacity facility in the country. Alcoa is planning to build a USD 1 bln aluminum plant in Trinidad, and the two world leaders – Alcoa and Alcan, signed a good will memorandum for a new aluminum plant in Guinea, with a capacity of 1.5 mln t, which is due to start operating by the year 2008. The UAE-based producer – DUBAL intends to increase the capacity of one of its plants from 686 to 761 thous. t annually. Brasil-registered CVRD is planning to build jointly with China’s Chalco an aluminum refinery with a 1.8 mln t capacity in 2007.
Source: Pari (31.05.2004)

EU started a probe into a possible dumping of special Russian and US-produced steel, penetrating European markets.
Source: Pari (31.05.2004)

Zambia, one of the world top copper producers, will sharply increase the amount of its production output this year. It is expected to reach 450 000t from 349 000t in 2003.
Source: Pari (31.05.2004)

The latest failures of USD against its chief rival – EUR, immediately affected the prices of non-ferrous metals at LME in reverse proportion, and they started going up. The funds, which had lately withdrawn from LME, appeared on the market again. The tone of the heights was supported by tin and copper. The fundamental factors were more stable for tin, after a new reduction f the metal’s inventories at LME was revealed. This sent its price to an almost 16-year maximum. Rising copper prices were somehow unstable due to the sales on the Chinese market, which were restricting their upper move. Another reason for the strong positions of copper is the fact that Indian producers are expected to start filling in their copper concentrate reserves soon.
Source: Capital (31.05.2004)

Foreign direct investment (FDI) in Bulgaria for the first quarter of 2004 amounted to EUR 294.1 million, up 13.1 per cent on the year-ago period, preliminary data of the Bulgarian National Bank show. For the first three months of the year no receipts from privatisation deals were registered. 83.8 per cent of foreign investment, or EUR 246.3 mln represent the increase of the amount of credits granted by mother companies to enterprises of foreign interest in Bulgaria. Foreign trade deficit in the first quarter was in the amount of EUR 509 mln EUR 217.5 mln worse than the same period of 2003. Export has increased with 5.2 per cent up to EUR 1.718 bln.
Source: Standart (01.06.2004)

Domestic trade in non-ferrous metals has come to a standstill following China's decision last month to cut down sharply on imports of raw materials which sank global prices, the local Association of Traders in Non-Ferrous Metals said on Monday. Local copper-zinc scrap now sells at USD1,300 per ton versus USD 1,500-USD 1,600 per ton a month ago. Aluminium scrap has cheapened from USD 1,300 to USD 1,050 per ton. Bulgarian plants traditionally process some 950,000 tons of ferrous scrap annually. Of these, 700,000 tons are purchased by the Kremikovtzi and Stomana steel works, and the remainder is exported. In terms of non-ferrous scrap, exports account for 75 per cent. This trend will probably persist in the coming years as local plants operate on concentrates mostly. Scrap processing, however, is extremely energy-efficient. According to EUROMETREC data, when non-ferrous metals are produced from aluminium scrap some 95 per cent of energy is saved; with copper, lead and zinc this portion is 70 per cent, 80 per cent and 75 per cent, respectively.
Source: Dnevnik (01.06.2004)

More than 3,000 redundant employees of Bulgaria's Stomana JSC have received their wages and severance payments in less than two months. The metallurgical company has paid up a total of BGN 2.03 mln to workers in the form of wages and compensations and BGN 63 419 to employees suing the company.
Source: Pari (02.06.2004)

Sofia City Court discharged the former Minister of Agriculture Mr. Georgi Tanev and the financier Mr. Emil Harsev from the accusation of showing dereliction of duty in the so-called American Corn case. Mr. Tanev was accused, that in his position of Minister from the Cabinet Berov in 1993, he demonstrated dereliction of duty over handling the USD 7 mln gained from the sale of 157 t of American corn, donated as a gratuitous aid. He cosigned the money for trust management to Harsev & Co. The guarantee in the deal was the bankrupt TS Bank. The USD 7 mln were later invested in Stomana JSC – Pernik. Stomana was declared insolvent in June 1999. On July 7 1999, Mr. Ventzislav Varbanov – back then Minister of Agriculture in the Government of Mr. Ivan Kostov, revealed some information about the deal in an open session of the Council of Ministers.
Source: Dnevnik (03.06.2004)

The excess in the funded budget is BGN 528.8 mln. It raised by over BGN 300 mln for a month. The fiscal refill is BGN 4.415 bln compared to BGN 4.114 bln for the first 3 months. The revenues are BGN 5.097 bln. BGN 4 bln are funded by duties. The growth of the general revenues is by BGN 1.460 bln. The execution of the consolidation program shows BGN 4.568 bln outlays. The revenues in the State budget are BGN 3.368 bln (37.2 per cent), the outlays – BGN 2.962 bln (31.9 per cent).
Source: Pari (03.06.2004)

On Wednesday afternoon, non-ferrous metals stayed under the high levels, reached at LME on Tuesday evening. Copper reached 2840 USD/t compared with 2817 USD/t at the closing of trade the previous day and far from the 6-week peak of 2867.50 USD/t. Aluminum and lead added USD 8 each to respectively 1718 and 845 USD/t. Zinc headed to its 11-week maximum of USD 1134.50, but stepped down to 1127 USD/t at noontime. Nickel went down to USD 12 400 after hitting 12 425 USD/t on Tuesday evening, and far from the April peak of USD 12 600.
Source: Pari (03.06.2004)

Russia’s Norilsk Nickel reported a 47-per cent growth in net profit, which in 2003 reached USD 861 mln. Incomes from metal sales posted a 68-per cent jump from 2002, hitting USD 5.186 bln. Norilsk is to pay its shareholders a dividend of 20-25 per cent of the net profit, according to International Accounting Standards.
Source: Pari (03.06.2004)

French steel producer Arcelor expects its 2004 profit to be at the level of the profit, registered in 2003. Real steel consumption in EU (Arcelor’s main market) will grow by 2.1 per cent, and visible consumption together with buys from accumulated reserves – by 3.7 per cent.
Source: Pari (03.06.2004)

US-Bulgarian company Nord has invested BGN 350 000 in the building of metal products store in Sofia. The outlet is located on an area of 2 decares and was officially opened on Thursday. Nord’s Manager Ms. Monika Ivanova stated the company was planning to build similar stores on the whole territory of Bulgaria. So far, the company has developed a network of 130 stations for buy-up of ferrous and non-ferrous metals in the country. Around 80 per cent of its activity has to do with buy-up of ferrous metal scrap, and the other 20 per cent are related to non-ferrous metals. According to Ms. Ivanova, the investment may start paying up within the next 2-5 years. The store has been built on the platform for buy-up of scrap, and the idea is to close the production cycle and to facilitate customers. The other facilities the company is planning to build in the country will be built under the same scheme. The newly-opened store is located near the Sofia-north railway station. Nord Ltd. was registered in 1995 as a company, operating in the field of waste ferrous and non-ferrous metal buy-up. Ms. Monika Ivanova is Manager and owner of 25 per cent of Nord. The majority stake of shares (75 per cent) is held by the US-based company Premium Asset Management, which is also owner of Ecomarket and holds 98 per cent in Stroyconsult. Mr. Borislav Malinov is owner of the remaining 2 per cent of Stroyconsult’s capital. Mr. Malinov is also owner of Ecometals, which operates in the field of commercial mediation, as well as owner of Politrade-Borislav Malinov , which deals with wholesale of wastes and scrap. Mr. Malinov is owner of Ecologistic and Ecosped as well.
Source: Dnevnik (04.06.2004)

In 2007 1.2 per cent of Bulgaria’s GDP will be paid in EU’s budget, Minister of European Affairs Ms. Meglena Kuneva said. The installments over the next two years will be respectively 1.3 per cent and 1.2 per cent of GDP, she explained. Bulgaria has been receiving more than it has been giving for years, Ms. Kuneva added. According to her, Bulgaria needs big investments in education and culture. The most important thing is to manage to persuade the EU member states to support the technical completion of the negotiations with Bulgaria within the shortest term possible, Ms. Kuneva said.
Source: Standart (07.06.2004)

Fiscal reserves hit record-high level and will shortly reach BGN 5.0 billion, the ex-deputy finance minister, Krasimir Katev, told the local TV broadcaster bTV. According to the official data provided by the ministry of finances the fiscal reserves reached BGN 4.415 billion at the end of April, which is an increase of BGN 300 million compared to March 2004. Thus the preliminary repayment of the foreign debt becomes more probable, since the minimum inviolable extent of the fiscal reserves is BGN 2.5 billion.
Source: Pari (07.06.2004)

US biggest steel producer – US Steel Corp., denied all speculations concerning the purchase of the metallurgical plant Sartid, based in the Serbian town of Smederevo, in the beginning of the year, Wallstreet Journal reported. Nevertheless, the company agreed the deal for the privatization deal of the former state-owned steel plant, to be investigated. Serbian authorities did not mention any specific arguments for initiating the probe, but according to sources, close to the matter, the reason is purely political, since the names of members of the cabinet of the country’s former Prime Minister – Zorna Jinjich, were involved. The purchase of Sartid had been brought in compliance with all legislative regulations on bankruptcy in Serbia, and the procedure itself was extremely transparent, US Steel’s management said in their defense. The investigation is expected to end very soon, and the US giant will continue to implement its investment programme in the country’s steel sector. The US company kicked off the purchase deal in September 2003, when the Serbia-based enterprise was in a state of bankruptcy. Back then, the company engaged to pay USD 33 mln, USD 23 mln of them in cash. The costs for the transactions totaled to some USD 6 mln. US Steel paid another USD 4 mln for employee pension and disability insurance. The company promised to keep all jobs (around 9 000) within the next three years. In the next five years, US Steel must invest another USD 150 mln in the equipment, modernization and maintenance of the metallurgical plant. Currently, the new company is capable of producing around 1 mln tons of steel annually, but according to the undertaken obligations under the contract, the steel company expects this figure to reach 2.4 mln tons.
Source: Dnevnik (07.06.2004)

Big investors in Bulgaria, who used tax relieves, will be deprived of them when Bulgaria becomes a full-right EU member without receiving any compensations by the Government. According to par. 60 of the transitional and final orders of the currently active Law on Corporate Income Taxation (LCIT), they have the right to reduce the tax due on their profit by 30 per cent over a period of ten years as of the date, on which they have invested their money in Bulgaria. However, they will be able to take advantage of this benefit until December 31 2006, when Bulgaria is expected to join EU, after which European legislation will automatically become effective in our country. According to European legislation, all taxpayers, operating in the same branch, are equal. The tax preferences for investors will be removed after Parliament votes the new amendments in the LCIT, which were urgently adopted by the budget commission on June 3 2004. According to the precondition set by EU for the closing of the negotiation chapter Policy and Competition, the National Assembly should remove all tax preferences no later than June 8. The removing of tax preferences for big investors after December 31 2006, was included in the initial reading of the bill for amendments in the LCIT, approved by the budget commission on May 11. According to a survey, made by Ministry of Finance, however, this amendment affects the interests of four big companies operating in Bulgaria – Metro, Prista Oil, Shell, and Steelmet, for which the 10-year term for using tax relieves will expire after 2007.
Source: Banker (07.06.2004)

Securities of the steelmaker Kremikovtsi marked a 25.27% increase at the Bulgarian stock exchange Friday close. A total of 1,784 shares of the metallurgical giant changed hands this day, 965 of which was traded through the investment intermediary Bulbrokers. Sector company Stomana AD of Pernik registered a 30.15% improvement reaching a level of BGN 0.77 a par. The shares of Chimco AD of Vratsa were traded at BGN 0.12, a 9.09% rise. A total of 15,250 Chimco shares was traded on the stock exchange Friday session. SOFIX index rose to 488.46 points, an increase of 0.76% compared to Thursday. A total of 18,674 shares of the petrol distributor Petrol AD was traded at an average price of BGN 2.59, down by 1.52%. Zlatni Pyasatsi was the biggest looser with a fall of 4.31%, although only four share of the company changed hands on Friday. The securities of Sopharma, DZI and Bulgratabac fell by 1.58%, 1.25% and 1.41% respectively. A total of 13,851 shares of the central Co-operative Bank (CCB) was traded at an average price of BGN 2.70, unchanged compared to the previous session. Aroma, which had been developing gains for seven consecutive days, recessed by 6.63% on Friday, dropping to a level of BGN 6.48.
Source: Pari (07.06.2004)

If Russian economic growth rate and copper demand remain stable over the next few years, consumption will surpass the amounts the country is able to produce itself and Russia may become a net importer. Consumption has been growing with 15-20 per cent annually for the past few years. Russia produces 850 000 t of cathode copper, and in 2003 consumption reached 350 000 t. One of the alternatives for covering the growing demand is to develop the Udakonsko deposit, which has copper reserves of 20 mln. Meanwhile, according to one of the biggest experts in the branch VME, earlier this year the prices of the metal reached their maximum (3055 USD/t – a record value for the past 8.5 years) and will not go over these levels by the end of 2004.
Source: Pari (07.06.2004)

Quarter copper deals at LME on Friday ended the day 35 USD/t lower than the previous day and were made at levels of 2708 USD/t. The prices of the other metals were also lower. Aluminum was down 20 USD/t to 1662 USD/t, and nickel marked a 375 USD/t drop reaching 11 800 USD/t. Zinc’s price was 1110 USD/t or 28 USD/t lower.
Source: Pari (07.06.2004)

The Union of Entrepreneurs in Panagyurishte adjudged its annual awards. The Golden Rhyton for contribution to the development and raising the prestige of Panagyurishte municipality was awarded to Asarel Medet.
Source: Pari (08.06.2004)

National Social Security Institute published a list of the 20 “most upright employers having staff of over 250 people” for the first quarter of 2004. These 20 companies provide work for a total of 50391 people. The average social security income in these enterprises is BGN 621. 1. NPP KOZLODUY – KOZLODUY 2. LUKOIL NEFTOCHIM BOURGAS – BOURGAS 3. MINES MARITZA-IZTOK SP JSC – BRANCH PIT TROYANOVO-SEVER – village of KOVACHEVO 4. MINES MARITZA-IZTOK SP JSC – BRANCH PIT TROYANOVO – 1 – village of TROYANOVO 5. VIDIMA SEVLIEVO 6. STATE-OWNED COMPANY “AIR TRAFFIC DIRECTION” – SOFIA 7. MOBILTEL – SOFIA 8. TECHNOLOGICAL REGION OF LONG-DISTANCE COMMUNICATIONS “STTS” – SOFIA 9. BLAGOEVGRAD-BT JSC – BLAGOEVGRAD 10. MINES MARITZA-IZTOK JSC – BRANCH GROOVE TROANOVO-3 – village of MEDNIKAROVO 11. BULBANK – SOFIA 12. UNIVERSITY MULTI-PROFILE HOSPITAL FOR ACTIVE TREATMENT “ST. GEORGE” – PLOVDIV 13. TOPLOFIKATZIA SOFIA – SOFIA 14. ELATZITE-MED – village of MIRKOVO 15. STOMANA INDUSTRY – PERNIK 16. VAZOV’S MACHINE PLANTS (VMZ) – SOPOT 17. TPP MARITZA-IZTOK 2 –village of KOVACHEVO 18. BALKANPHARMA-DUPNITZA – DUPNITZA 19. PORT VARNA – VARNA 20. UMICORE MED - PIRDOP
Source: Other (08.06.2004)

The average salaries in the 100 companies, reported as most upright employers for the first quarter of 2004, vary in the range of BGN 621 - BGN 989, thus approaching the maximum social security upper limit, determined by the Parliament. These salaries are far higher than the minimum social security limits. More than 57 000 people, working in the top 100 companies, are secured over income of up to BGN 989. The top list, published by NSSI on a quarterly basis, is made on the basis of the amount of the social security income and the regularity of the payment. The companies are divided into 5 categories of 20 companies each, depending on the number of employees. The highest average social security income is observed in companies of up to 10 employees. An average increase of over BGN 100 (12 per cent) has been marked since 2003. Traditionally, the top list is headed by the Rousse-based Bulgarian representation of the German company Busak Shabman, which produces hydraulic gaskets. NSSI’s list also includes Alpha Laval, Prista Oil Trading, Sony Bulgaria, Biochim Leasing, etc. the biggest growth in salaries – with over 15 per cent compared to last year, is observed in big industrial companies, employing more than 250 people. The average salary in NPP Kozloduy, Lukoil-Neftochim, Vidima, Balkanpharma-Dupnitza, Umicore Med, etc. between January and March is in the amount of BGN 621, and the number of the employees, secured by those companies exceeds BGN 50 000. Over 4 000 people, working in the 20 companies, employing between 100 and 250 workers, were paid social security over an average income of BGN 674. Among these companies are Amilum-Bulgaria, Bulgartabac Holding, Festo Production, Unionbank, Borg Instruments, Daru Car, Plevenski Cement, and another 17 companies, employing between 50 and 100 people, providing work to 1656 employees with an average salary of BGN 731. As of March 31 2004, the Top 50 biggest debtors to NSSI have accumulated debts of BGN 216 mln, which is BGN 500 000 more than last year. This list is headed by Kremikovtzi, Stomana-Pernik and Varna Shipyard. The two metallurgical companies’ debt sinking plan for extension of their debts has been approved, and the assets of the shipyard have been sold to Navigation Maritime Bulgare.
Source: Dnevnik (08.06.2004)

The world’s biggest nickel and palladium producer Norilsk Nickel, accounting for 20 per cent of global nickel and 30 per cent of global copper production, for the first time publicly revealed information about the amount of its stockpile. The confirmed nickel reserves amount to 6.6. mln tons, and copper reserves total to 9.7 mln tons. Nickel reserves under research are in the amount of 8.1 mln tons and he copper ones – in the amount of 15.7 mln. tons. The total volume of the reserves will be enough to cover the demand over the next 50 years. The giant reported a 47-per cent higher net profit, which last year reached USD 861 mln. Rumours about a possible arrest of one of the company’s key shareholders – Potanin, caused worries among investors.
Source: Pari (08.06.2004)

Russian metallurgical companies are already competing for foreign assets. Following the officially announced plan for alliance between Severstal and Arcelor, Evrazholding also reported its intention to take part in the privatization of Ukraine-based Krivorojstal, which is the biggest metallurgical plant in the country with a capacity of 12 mln tons. It is 100-per cent owned by the state. Evrazholding is number one in Russia. US Steel and LNM Group have also teamed up in the fight for Krivojstal, as have Severstal and Arcelor. The deadline for submission of offers expired yesterday.
Source: Pari (08.06.2004)

The world’s sixth largest copper refinery – Kazakhstan-based Kazakhmills is planning to produce 425 00 t of metal in 2004, compared with 418 000 t last year. Kazakhmills, which last year set up the zinc plant Baklash, which has a 100 000 t annual zinc production capacity, expects it to produce 70 000 t of the metal this year and 90 000 t next year.
Source: Pari (08.06.2004)

ThyssenKrupp’s 60-per cent-owned China-based stainless steel producing joint venture is planning to increase its annual capacity to 400 000 t by the year 006. Its current annual production capacity is 80 000 t.
Source: Pari (08.06.2004)

Steelmet, which is related to the Greek industrial group Viohalco, has raised its capital from BGN 50 000 to BGN 343 374 through an issue of 293 374 new registered shares with a face value of BGN 1 each, the company’s legal advisor Mr. Yordan Yordanov announced. The change was made in the end of 2003, but was just recently registered by Sofia City Court. The type of shares has also been changed – from bearer to registered. The majority shareholder in Steelmet is Steel Metal – Greece. Mr. Anton Petrov, who is representative of the Greek group Viohalco in Bulgaria, also has a stake in the company. According to the information included in the Daxi register, Steelmet holds 32 per cent in the Bulgarian Steelmet JSC, but according to Mr. Yordanov this percentage may have changed following the restructuring of the company’s capital. The sum, accumulated through the increase of the capital, has been used for the purchase of lands and real estate in the region of Plovdiv. Some time ago, Steelmet’s CEO Mr. Anton Petrov said the company was planning to build a new trading and warehouse base near the town. Steelmet is an aluminum profiles producer. The plant in Sofia was built as a greenfield investment in 1999. The initial investment was in the amount of EUR 12.5 mln, and the total investments made in the enterprise so far exceed EUR 16 mln. The company has warehouse facilities in Varna and Blagoevgrad. It is a part of the plants, owned by the Viohalco group. Some of the other Bulgarian companies, owned by the Greek industrial group are Lesko – Blagoevgrad (producer of wood packaging for the needs of Viohalco), Sofia Med – Sofia, Stomana Industry – Pernik, Thermo-calibrating plant in Pernik, Sigma – Pernik (operating in the field of repair), etc.
Source: Dnevnik (09.06.2004)

When the decommissioning of some capacities in NPP Kozloduy’s takes place, NPP Belene should be ready to start operating, according to a declaration by the Bulgarian Branch Chamber of Ferrous and Non-Ferrous Metallurgy. The new nuclear capacities are of major significance to the overall development of local industry, a part of which is Bulgarian metallurgy, to its competitiveness on the local and international market. According to the declaration, there was no other alternative to develop and keep nuclear industry working, because of the law quality of the available coal reserves and the unfavourable natural conditions, which limit the possibilities of building hydro stations. The prices of electricity, produced in nuclear power plants, is lowest of all.
Source: Sega (09.06.2004)

Stainless steel with higher nickel content (replaced with manganese) is expanding its market share, especially in Asia. According to current evaluations, consumption has jumped almost twofold to 7.5 per cent of the total amount of stainless steel over the period 2000-2003. One Finnish expert even expects it to grow up to 12 per cent (3.5 mln t) in 2010. This type of steel is cheaper, but is less resistant to corrosion, which makes it suitable for concrete reinforcement. Perspectives ahead of producers are good, considering the fact that USA is planning to modernize 600 000 bridges over the next 100 years. The money, which will be spent for this undertaking alone, is estimated at USD 200 bln. According to specialists, steel with lower nickel content is suitable for this purpose.
Source: Pari (09.06.2004)

A 842 000 t aluminum deficit is expected on the world market in 2004, which will unavoidably result in higher aluminum prices, BME forecasted. Growing demand in USA and China has resulted in reducing world inventories and the market is entering a phase of serious deficit. In 2003, 7.4 per cent or 28 mln t more initial aluminum was produced in the world, while demand jumped with 8 per cent to 27.6 mln t. For this year, BME forecasted a 4.3 per cent increase in production output, which is expected to reach 29.2 mln t, while consumption will be up 9 per cent to 30 mln t. Aluminum may gain from the speculative interests of exchange players, motivated by the cheap USD, and the average cash prices in 2004 will exceed 1700 USD/t.
Source: Pari (09.06.2004)

Vedanta, the London-listed minerals company, has invited international minerals companies to acquire a minority stake in its USD 1bn alumina refining project in India, said Anil Agarwal, chief executive.He did not name the potential bidders but people close to the deal said BHP Billiton of Australia, South African coal-miner Xtrata, Pechiney of France, Canada's Alcan, and Alcoa of the US are among at least six companies that have been approached.Vedanta is also thought to have targeted companies in China, where demand for alumina - the intermediate material that is refined into aluminium - is strong. (source: FT)
Source: Other (10.06.2004)

Copper prices will probably overcome their current levels and will start going up, following the news that there was a 379 000 t deficiency on the world market in the first quarter of the year, British metal experts forecasted. According to them, copper will be traded between 2500 – 3000 USD/t, and if deficiency gets bigger, the red metal may go even beyond these levels. Yesterday, the prices stabled around levels of 2680 USD/t, and in February, they marked an 8.5-year record of 3055 USD/t. Meanwhile, Russia’s second biggest copper producer – UMMK, is planning to produce 300-310 000 t of copper cathodes this year. 200-220 000 t of copper wire will be produced of them. In 2005, UMMK is planning to stop exporting cathodes and to start exporting copper wire.
Source: Pari (10.06.2004)

According to recent notice published in Official Journal of Turkish Republic, Turkish steel wire rope producer Celik Halat ve Tel Sanayi A.S submitted a petition to Board of Evaluation of Unfair Competition in Importation, stating that the imports of steel wire rope and cable from Russia and China are sold in Turkey at prices less than fair value, thus causing material injury for Turkish industry. It is found out the petitioner produced 51% of Turkey’s total production of subject merchandise in 2003. The other domestic producers, Has Celik ve Halat Sanayi A.S, Yzmit Celik Tel ve Halat Sanayi Ltd and Ko?kerler Celik Halat ve Makine Sanayi also notified Board of Evaluation of Unfair Competition in Importation that they support the complaint filed by Celik Halat. Finding sufficient evidence that the case requires an investigation, Board of Evaluation of Unfair Competition in Importation determined that an anti-dumping investigation should be initiated for imports of subject merchandise from Russia and China. The investigation will be conducted by Turkish Undersecretariat of the Prime Ministry for Foreign Trade (DTM).
Source: Other (11.06.2004)

India plans to boost steel output by 86 per cent by 2012 and remove import duty on steel scrap to cut input costs, Steel Minister Ram Vilas Paswan said on Saturday. The world's eighth-largest steel producer would further boost steel output by 2020 to meet the growing demand from industry and infrastructure projects such as ports and roads, Paswan told reporters. "We will take production to 60 million tonne by 2012, and the target for 2020 is 100 million tonne," he said. India, with a per capita steel consumption of just 29 kg, produced 36.19 million tonne of steel in the year ended March 2004. In comparison, China, the world's largest producer made 220.1 million tonne in 2003. Private companies such as Tata Iron and Steel Company Ltd produce more than 55 per cent of India's annual steel output, while the remainder is contributed by state-run firms like Steel Authority of India Ltd. Paswan did not say how much Government-owned companies would spend on increasing capacity but analysts say it costs up to Rs 30 billion to augment capacity by one million tonne. Paswan said his ministry wanted the import duty on scrap to be reduced to zero from the current five per cent to lower costs for steel producers. Import duties are fixed by the Finance Ministry. The Steel Ministry was also considering setting up a regulatory body to monitor prices and identify demand and supply bottlenecks in the industry, he said. He said consumers were clamouring to reduce the 15 per cent import duty on finished steel to five per cent to curb domestic prices, but producers were against any such move. Average steel prices jumped 19 per cent in 2003-04, tracing a rising global trend that was driven by growing demand from countlike China. A boom in the domestic housing and automobile sectors also contributed to firm steel prices.
Source: Other (12.06.2004)

Elatsite-Med JSC is launching a new technological line for over EUR 15 mln. The equipment is Europe’s biggest hydraulic electric-operated excavator, manufactured by Terex Mining – Germany, and the highest-class production trucks.
Source: Pari (14.06.2004)

The Competition Tribunal has unconditionally approved the merger of the world's second largest steel group LNM Holdings and South African steel group Iscor. Reasons for the decision will be released in due course, the Tribunal said. LNM Holdings currently holds 49.9% in Iscor and the ruling will allow the group to increase its stake in Iscor to over the 50% mark. Several trade unions and the Department of Trade and Industry participated in the merger proceedings. Trade unions like Solidarity expressed concern about the effect of the merger on domestic steel prices as well as the possibility of retrenchments. Subsequent to the Minister's Notice of Intention to Participate, the Department of Trade and Industry reached an agreement with LNM on 4 May 2004 and gave its support for the merger.
Source: Other (14.06.2004)

Jinan Iron and Steel, the Chinese steelmaker, on Monday raised $169m from a share placement in Shanghai to raise funds for an extensive capacity expansion plan, despite state measures to curb over-investment in the sector. The sale, which China's 11th largest steelmaker said should not be regarded as a public listing, offered 220m new shares in the company at Rmb6.36 each. Investors holding at least Rmb10,000-worth of A-shares trading in the domestic markets were eligible to subscribe. The offer price represented 7.66 times Jinan Steel's 2003 earnings. It was considered one of the lowest multiple among A-shares issued this year. Jinan Steel's executive general manager, Mr Wen Yanming, said in an earlier interview with the FT that the company expected annual production capacity to reach 8m tonnes of steel this year from 4m tonnes in 2002. The company aimed to raise capacity to about 10m tonnes within three years. Sales in 2005 is expected to reach Rmb15bn.
Source: Other (14.06.2004)

A company owned by the son-in-law of Ukraine's President Leonid Kuchma has won a tender to buy Kryvorizhstal, the country's biggest steel plant. Viktor Pinchuk, who has interests in steel, energy and media, won the bid in partnership with Rinat Akhmetov, Ukraine's richest man. Their 4.3bn-hryvnia (?430m; $780m) bid won despite competition from Russian, US and European steel firms. The tender has aroused vigorous protest in Ukraine and abroad. Opposition politicians have accused Mr Kuchma and his associates of blatant corruption; Severstal, a Russian steel company that was seen as the likeliest winner in the tender, has said it will take the issue to court.
Source: Other (14.06.2004)

1.97 per cent is the inflation from the beginning of the year (comparing May 2004 to December 2003), and 6.43 per cent comparing the period January – May this year to the same period last year, National Statistical Institute announced. The inflation in May 2004 comparing to May 2003 is 6.83 per cent. The prices have remained stable comparing with April this year.
Source: Darik Radio (15.06.2004)

The life of the Elatzite groove will be extended by at least 10 years following the investment, recently made in it. The company, operating the groove – Elatzite Med JSC, has bought Europe’s biggest electricity-powered hydraulic excavator, made by the German company Terex. Five new 100-ton tip lorries made by the same company have also been bought. Another three 130-ton tip lorries have been bought from Belarus. The total investment is in the amount of EUR 10 mln. The high productivity of the new machines will allow us to open 25 mln new earth mass in the eastern section of the groove and to reach the ore by the end of 2005, Mr. Tzolo Vutov – CEO of Elatzite Med JSC announced. Elatzite is the biggest open groove for production of copper ore on the Balkans. Some 12 mln tons of copper ore and 150 000 tons of copper concentrate are produced in it annually, which are mainly sold to Umicore – Pirdop. The copper ore has gold alloys. 1.5 tons of gold are produced in the groove annually.
Source: Pari (15.06.2004)

Trade deficit for the first 4 months of 2004 reached BGN 1.52 bln, National Statistical Institute data show. The increase is 56.8 per cent compared with the same period last year when the deficiency was BGN 967 mln. The export in the first 4 months of the year increases with 6.6 per cent up to BGN 4.53 bln compared with the same period last year. However the import is increased by 13 per cent up to BGN 6.05 bln which is the reason for the record commercial deficiency.
Source: Pari (15.06.2004)

Bulgaria's Kozloduy nuclear plant will join the list of local power plants that will be allowed to sell electricity to a list of major energy consumers as of July, said chairman of the State Energy Regulatory Commission (SERC) Konstantin Shushulov. The exact amounts of energy supplies will be determined shortly. The SERC plans to expand the privileged consumer group to include consumers with annual intake of over 40gWh such as Amylum Bulgaria, Balkanpharma, Biovet, Sofia Med, Leko Co and Miroglio Bulgaria. For the time being, to be granted a privileged consumer status a company needs to have an annual consumption of over 100gW annually and to have no outstanding liabilities to the National Electricity Transmission Company (NETC). NETC expects that actual trading between consumers and the power plants will begin after July 3. As of 2007 household consumers too will be able to select an electricity supplier. An issue that still remains open regards the size of the transmission fee which the companies will be paying to NETC. The privileged consumers are currently appealing before the Supreme Administrative Court the SERC's decision to bring the fee to 11.8 levs/mW. The next court hearing is scheduled for this autumn.
Source: Dnevnik (15.06.2004)

Metal prices at LME on Monday collapsed, following the strengthening USD, which reached a 3-week peak against the euro. Quarterly copper supplies went down to 2530 USD/t, but later stabled around 2350 USD/t and were again contracted 8 USD/t lower than on Friday. Regardless of the decreasing aluminum inventories, which wend under 1 mln tons (for the first time since March 2002), the price of the metal added 7 USD/t reaching 1630 USD/t. Nickel was moving against the flow and its price added 160 USD/t to 12 890 USD/t Lead and zinc, influenced by speculative sales, lost respectively 7 and 16 USD/t to 760 USD/t and 1015 USD/t. Gold’s price increased with 1.20 USD/t from Friday, reaching 385.90-386.60 USD/t, and silver – with 4 CTS to 5.73 – 5.75 USD/t.
Source: Pari (15.06.2004)

Electrostomana’s activities, according to the company’s information memorandum, published on BSE’s web site, include production of steel castings, pig iron and non-ferrous metals, as well as manufacture of spare parts for tractors, agricultural machines and cars. The company’s production activities are focused into two main directions: founding and mechanical processing and repair. The main suppliers of Electrostomana are SP Lilyana Delevska – Karlovo, Gordis Ltd. – Plovdiv, Kamet – Sofia, Bentonite – Kardjali, etc. Its main clients are Asarel Medet, Elatzite Med, Kremikovtzi, Gorubso – Kardjali, Zlatna Panega, and its main competitors are Besttechnika – Struma, Bamex, as well as other Bulgarian enterprises, operating in the same field. The company has its own production platform in Karlovo (with an area of over 94 thousand sq.m.), as well as two holiday bases in Kalofer and the village of Starosel. On the production platform, there are steelworks, warehouses, as well as an administrative building. One of the company’s problems is the fact, that the equipment in the holiday bases is not good enough. The company’s long-term tangible assets have a balance value of BGN 51 000. Electrostomana is also holder of trade mark certificate and a license to operate in the field of ferrous and non-ferrous metal trade. As of the middle of last year, Electrostomana has no long-term liabilities, and its short-term liabilities are in the amount of BGN 664 000. Most of them are liabilities to suppliers, clients, and related companies, which are actually non-distributed dividends. The short term receivables of the company are in the amount of BGN 71 000 (most of them being from clients). The ratio between the available financial funds and receivables, on one hand, and the liabilities, on the other, is very low, which creates problems with the company’s liquidity. The liquidity and profitability financial indicators have aggravated sharply over the past three years. Their reduction is an indicator of the company’s poor financial state, the difficulty, with which it executes orders and the low solvency of its clients. This leads to reduction in the company’s staff, which in the end of last year numbered 158 people. Nevertheless, the company is still operating.
Source: Dnevnik (16.06.2004)

One of Ukraine's most lucrative privatisation deals has been awarded to the richest man in Ukraine and along with arguably the most well connected man in the country. On Monday, Rinat Akhmetov, Ukraine's wealthiest man and businessman Viktor Pinchuk, the son in law of President Leonid Kuchma, won the tender to buy Kryvorizhstal, one of the world's largest steel plants. For some Ukrainians this is being viewed as another cynical example of pro-government oligarchs profiting at their country's expense. No contest A consortium of international firms LNM and US Steel had offered USD 1.5bn for Kryvorizhstal, but the Akhmetov-Pinchuk partnership won despite bidding half as much. The tough rules set out by Ukraine's State Property Fund excluded most of the proposals - including all the foreign ones. Companies were required to have a history of producing at least a million tonnes a year of coke in Ukraine. While claiming to welcome international bids, this condition meant it was never going to be an open competition for Kryvorizhstal, which employs 52,000 people, and which last year made a pre-tax profit of around USD 300m.
Source: Other (16.06.2004)

According to the recent statement released by Vietnamese government, the duties on imported steel products and ingots will be increased to 15-20% and 5-10% respectively. The duties are stated to have been increased due to sharp decrease in steel prices in international markets. Moreover, supply in Vietnamese market is high. With the implementation of new tariffs, prices in Vietnamese steel market is expected to decreased by VND700’000 ($44) per ton.
Source: Other (17.06.2004)

IMCO Recycling Inc. has agreed to acquire Commonwealth Industries Inc., creating a company that will be in both the aluminum recycling and aluminum sheet manufacturing businesses, the companies said on Thursday. Commonwealth stockholders will receive 0.815 IMCO share for each Commonwealth share. When the transaction is completed, IMCO stockholders will own about 54 percent of the new company and Commonwealth stockholders will own about 46 percent, based on the number of shares outstanding as of June 16, according to a statement.
Source: Other (17.06.2004)

China ordered an immediate stop to the unlicensed production and sale of steel rods used in construction, which it says has aggravated power shortages and helped push up prices of raw materials. Local governments must cut off such steel mills' electricity and dismantle their power equipment, the National Development and Reform Commission, China Electricity Regulatory Commission, Ministry of Commerce and four other bureaus said in a statement. A four-fifths rise in the price of imported steel rods, or rebars, has lured some investors to set up illegal plants that make inferior products, the statement said. The use of outdated equipment consume high levels of power, pollute the environment and use up raw materials, resulting in ``serious disruptions'' to the steel sector, the statement said. China yesterday raised electricity rates for industries and businesses in four regions facing power shortages to curb usage.
Source: Other (17.06.2004)

A spike in steel prices over the past two years may be coming to an end, the head of Arcelor, the world's biggest steel maker, told the Financial Times in an interview published Tuesday. Steelmakers would have "limited room" to hike prices further after the third quarter of this year, Guy Dolle was quoted as saying. That was because Chinese demand was beginning to slacken off and industrial activity in Europe remained weak, according to the report. "There are no signs of any real economic recovery in Europe this year," Dolle said. Prices have doubled for many types of steel over the past two years but the newspaper said the cyclical industry "may be at or close to its current peak in terms of overall demand for the metal and opportunities for profitability". This year should nonetheless be a very good one for steel groups, the Arcelor chief executive noted. "This year will be the best year of the decade (for earnings) for the steel industry," he said. Supplies of raw materials, coke in particular, could continue to pose problems into 2005, however, Dolle forecast.
Source: Other (17.06.2004)

The global resources company BHP Billiton is moving the corporate headquarters of its $5.7 billion base metals division from the United States to Chile. The shift will be completed by the end of the year, and follows the April appointment of Chilean Diego Hernandez as president of the base metals customer sector group.The move will put the corporate centre for base metals closer to its major assets, especially its copper operations.BHP Billiton has the majority stake in the world's largest copper mine, Mineria Escondida, in northern Chile.The company also has ownership or part-ownership of three other major copper projects in Chile and neighbouring Peru. The announcement of the shift from Houston to the Chilean capital, Santiago, was made by BHP Billiton chief executive Charles Goodyear after an hour-long meeting with Chile's President, Ricardo Lagos, this week. Mr Goodyear is visiting Chile, which is hosting the first-ever Asia-Pacific Economic Co-operation mining conference. He told Chilean media Santiago would become another corporate centre for BHP Billiton along with Melbourne and London. BHP Billiton's base metals group has operating assets in copper, lead and zinc worth $5.7 billion and expansion plans worth a further $2.3 billion.
Source: Other (17.06.2004)

Bulgaria's defence ministry is expected to sign with car maker DaimlerChrysler by the end of next week a contract for the supply of 100-120 Mercedes vehicles for the needs of the armed forces. The supply deal, estimated at an eight-digit figure, will be financed by the state budget and will involve a direct offset mechanism. At this point, the offset deal envisages that construction of three repair centers for the German vehicles. DaimlerChrysler has handpicked Pleven-based Alucom as local supplier, Dnevnik learned from colonel Kiril Stoichev, chief of the armament and equipment policy department at the defence ministry. DaimlerChrysler and the defence ministry signed in late 2003 a framework agreement for the replacement of some 12,000 army vehicles. The fleet purchase is part of a package of 11 strategic projects for the modernisation of the armed forces which is expected to absorb 1.5 bln levs by 2007 with the blessing of the government. Between 50% and 60% of the overall tab is expected to be recouped under various offset arrangements. All candidates for the army upgrade projects, and these include Lockheed Martin, General Dynamics, EADS, BAEs, Thales and Sagem, have offered to employ offset mechanisms, Stoichev said. DaimlerChrysler has reportedly offered to offset 70% of the value of the supply contract seen at over 500 mln levs. The second contract that will go to DaimlerChrysler in 2005 - for the supply of another 1,000 vehicles, will employ an indirect offset scheme which will result in investment and the supply of technology for the industrial sector.
Source: Dnevnik (18.06.2004)

World Bank granted EUR 123.7 million worth of credit to Bulgaria in support of the country's balance of payments. The credit comes under the second loan programme for restructuring PAL II. The agreement was signed yesterday by the finance minister, Milen Velchev, and the World Bank's director, Anand Seth. The credit will be extended in two installments. The second EUR 20 million will come after achieving satisfactory progress with the privatisation of Bulgartabac. The sum under PAL II has a five-year grace period and a maturity date after 17 years. The credit's gratis period is 5 years.
Source: Pari (18.06.2004)

A waste incineration facility will be built by the middle of 2006 on the grounds of Bulgaria's Kremikovtsi metallurgical plant. This emerged at a discussion at the Sofia municipality on the problem of industrial waste management in the capital city. Two companies have been short-listed to the final stage of the procedure: Greek-American Balkan Engineering and Belgian-British Rem. The first candidate offers a price of EUR 16 per tonne of wastes (including inflation adjustment), the second, EUR 5 per tonne. The Belgian-British consortium also offers to incinerate hazardous wastes. The project has to be first approved by the environment ministry. Representatives of Kremikovtsi commented for the PARI daily that they did not object to the project; the company is ready to provide the infrastructure but is not going to finance the construction. When the facility is completed, Kremikovtsi may use the products of incineration for the company's heating plant, the works said.
Source: Pari (18.06.2004)

Enemona JSC is ending the installation of the purifying facilities in Kremikovtzi JSC. The air-purifying facilities, which have been installed, completely guarantee the ecological effect of the new flow line’s production. The overall project is to the value of BGN 3 mln and also includes building of steel founding facility.
Source: Dnevnik (18.06.2004)

China Steel Corp, the nation's biggest steelmaker, said it's considering widening its partnership with Sumitomo Metal Industries Ltd of Japan to build plants in China. The two companies are evaluating building a plant in China to make steel plates used in automobiles, a Chinese-language newspaper reported yesterday in Taipei. The two may invest more than NT$5 billion (US$148 million) in the mill with an annual production capacity of at least 300,000 tonnes, the report said. "We have cooperated rather well and we have all along been looking at ways to extend that partnership,'' said China Steel executive vice president Chen Yuan-cheng. "We haven't ruled out investing in China," he said. Chen declined to elaborate and said the companies have no timetable for a venture.
Source: Other (19.06.2004)

If an owner or a creditor starts selling shares of Kremikovtzi JSC – Sofia, they will find out that loan in amount of BGN 1 responds to sinking assets in amount of BGN 0.01. This is written in the report of Temporary Parliament Commission that explores the company. The members of the Parliament appointed control after the fatal incident on January 10, 2004 when 3 men died. “The company is falling into bigger dependence on the related with it parties. The existence of related companies (such in which the enterprise is sole- or majority owner or co-owner) is a precondition for the transfer of loan between them”, is written in the report. There are 10 companies listed. The Commission suggests that the Minister of Finance should appoint an urgent control, and the Minister of Economy Mrs. Lidya Shuleva should take steps for its recovery and the Post-Privation Agency to draw a conclusion for the way that the privatization program is performed.
Source: 24 chasa (21.06.2004)

Steel maker Iscor has appealed to government to retain punitive import duties that have been in place against steel imports from Russia and the Ukraine for the past five years. Iscor has warned that removal of the duties would open the door to unfairly priced steel from these countries. Cheap imports would benefit steel users, but could hurt Iscor's bottom line. The duties on hot-rolled coil and sheet from these countries were implemented after Iscor petitioned against these imports. A government investigation confirmed Iscor's claims that suppliers from those countries had been dumping steel in the domestic market. Antidumping duties are typically reviewed after five years, and fall away unless SA's International Trade Administration Commission is convinced that the threat of unfair imports remains valid.
Source: Other (21.06.2004)

POSCO was named the "most competitive steel company" in the world for the third consecutive year. According to an evaluation conducted by the US steel information service World Steel Dynamics, POSCO ranked first out of 21 international steel companies with a total score of 7.95. POSCO received the highest score in six categories, including profitability, market dominance, cash operating, skilled workforce, price negotiability, and product quality. POSCO has been ceaselessly striving to conceive a competitive edge by trying to commercialize new steel technologies such as FINEX and and Strip Casting, corporate restructuring, and starting a massive five-year investment plan. In the evaluation, Severstal of Russia rose from last year's fifth-place ranking to sole second-place, Bao Steel of China ranked third, Tata Steel of India fourth, and US New Core fifth. Nippon Steel and JFE of Japan ranked 11th and 13th, and Arcelor of the EU, which is the world's biggest steel company, ranked only 18th. The advancement of Chinese companies was especially notable. In addition to Bao Steel, which ranked 2nd, the Sagang Group was also ranked 11th, making it to the final 17 companies selected.
Source: Other (21.06.2004)

Stainless steel exports have fallen by more than 50 per cent in the first two months of current financial year mainly due to suspension of export related incentives like DEPB by the previous government in March.Jindal Stainless Steel exported only 16233 tonnes during April-May this year compared to 39,856 tonnes in the same period last year and continuation of this trend may lead to a situation of glut in the domestic market, says Indian Stainless Steel Development Association.
Source: Other (21.06.2004)

Copper prices rose in London as inventories fell to their lowest for almost eight years because of increasing demand in China and the U.S., the two biggest users. A Bloomberg survey this week showed six of 11 analysts in New York, London and Sydney predicted copper would rise on the shortage of the metal used in power cables and electrical wiring. ``You would need some sort of material change to see a fall in copper,'' said Kevin Tuohy, analyst at Man Financial in London. Copper rose $27, or 1 percent, to $2,642 at 10:54 a.m. in London. Stockpiles in officially denominated London Metal Exchange warehouses fell 2,100 tons to 112,175 tons, the lowest level since November 1996. Copper demand in the U.S., the world's largest economy, rose 8.3 percent in the first quarter, said the International Copper Study Group, based in Lisbon, driven in part by home construction. Prices were unlikely to fall below $2,400 a ton, although copper would continue to fluctuate as investors sought to use commodities as a hedge against the declining dollar, Tuohy said. The two biggest issues for the copper market are the Chinese demand and the return to full production of Freeport McMoran Copper & Gold Inc.'s Grasberg mine in Indonesia, the world's second- largest copper mine, which suffered from a fatal rockslide in October last year, Tuohy said. Other analysts such as Barclays Capital say large investment in China's power sector will ensure strong demand for the metal this year. Power cables represent about 30 percent of copper demand in China, Barclay's said in its bi-monthly Commodity Refiner report published late last week. Grasberg is expected to resume normal shipments in the third- quarter of this year after output plummeted since the October 2003 landslide, Tuohy said. Among other metals, nickel rose for a fourth day, after surging 12.8 percent last week. It rose $190 a ton, or 1.3 percent, to $14,600 in London. Nickel inventories fell 186 tons to 8,298 tons, their lowest since November 1991. Tin, used in solders in electrical equipment, rose $125, or by 1.4 percent, to $9,025 a ton, as stocks continued to decline. Aluminum rose $10.5 to $1,714 a ton, while lead rose $4 to $839. Zinc fell $6 to $1,020.
Source: Other (21.06.2004)

Within two months, Council of Ministers will have to elaborate an analysis of the state of the metallurgical giant Kremikovtzi, UDF deputy Mr. Yordan Nihrizov announced. This is written in the final report of the temporary investigation commission, which was formed to investigate the labour conditions in the company. The head of the commission is the MRL deputy Mr. Ramadan Atalay. The specific purpose for the establishment of the commission was the breakdown, which happened in Kremikovtzi in January this year, in which a number of workers either died or were heavily wounded. Within a week after the analysis is completed, the Government should suggest specific measures for the improvement of Kremikovtzi’s state and for the implementation of Buglaria’s steel industry overall development programme. It was adopted by the Cabinet this spring following demand by the European Commission, in connection with the closing of the Competition chapter. Brussels wanted Bulgaria to fix the amount of steel it shall produce by the year 2007, when we expect to become full-right EU members. Therefore the steel industry development programme includes not only Kremikovtzi and Stomana Industry – Pernik, but also Promet Steel – Bourgas. According to the report of the temporary commission, the Cabinet will ask Kremikovtzi’s owner – Mr. Valentin Zachariev, to provide guarantees he would keep the parameters, envisaged in the steel industry development programme. According to Mr. Nihrizov this means that the plant may be requested to provide some bank guarantees as well. He added the working conditions in the plant are not good. Our statements are based on the report prepared by the Chief Labour Inspectorate, Mr. Nihrizov explained, adding the report did not recommend the plant to be declared insolvent, despite assumptions this might happen.
Source: Monitor (21.06.2004)

Bulgaria's economy expanded by 5.3 per cent in Q1 as GDP growth quickened to a pace not witnessed since the third quarter of 2002, shows preliminary data of the National Statistical Institute. Industrial manufacture and services were the biggest growth engines in Q1, pumping Bulgaria's GDP to BGN 8.056 bln with only token help from the farming sector. Buoyant oil and slower-than-expected global growth forced the Bulgarian government to revise in late May its 2004 economic growth forecast from 5.3 per cent down to 5.0 per cent. The statisticians expect the surge in oil prices to catch up with Bulgaria's GDP by the second quarter. End consumption ate up 91 per cent of GDP produced in Q1 while the GDP share of individual consumption rose 4.9 per cent to 81.1 per cent. Gross value added increased by 6 per cent, the statisticians said. The private sector created 72.7 per cent of value added in Q1, up 8.8 per cent, while the value added input of the public sector fell 1 per cent to 27.3 per cent. Bulgaria's GDP per capita stood at EUR 526.5 in Q1 or 27 per cent of the relevant average for the EU-15 and 29 per cent of the EU-25 average, NSI said
Source: Dnevnik (22.06.2004)

Local investment has jumped with 21.4 per cent over the period January-March, NSI announced. Most of bank credits are also allocated for investments in local economy, according to the statistical data. Financial agents services posted a 31 per cent growth in the first quarter of the current year. Bank profits from their main activity have marked the same increase. Goods and services demand for the needs of production have increased with 11.1 per cent, Mr. Todor Todorov, head of the National Accounts department in NSI. Final consumption by citizens has grown with 4.9 per cent, which is smaller than the growth, marked by economy – 5.3 per cent.
Source: Standart (22.06.2004)

Bulgarian companies are already enjoying the benefits of the agreement for free trade with Serbia and Montenegro, which became effective on June 1, Ms. Anelia Angelova – head of the Customs Agency’s Tariff Policy directorate said. Since the beginning of June, almost all industrial products are traded between the two countries free of duty. For only 10 per cent of them, the duties will be removed in stages by the year 2007. The products concerned are fuel, washing detergents, nitric fertilizers, ceramic tiles, shoes, pumps, electrical machines, etc. Serbia will partially keep duties on Bulgarian tyres, clothing and textile, furniture, ceramic vessels, glass, steel products and apparatus. By the end of the year, the amount of duty imposed on these products will be 80 per cent of the base amount. For agricultural products, we are conceding each other mutual preferences within certain quotas. If our exporters want to take advantage of these preferences, the goods should be of Bulgarian origin, without allowing the so called cummulation (including of third parties), such as we have with EU.
Source: Pari (22.06.2004)

No candidates appeared on the tender for the oldest copper processing and non-ferrous metal producing plant in Bulgaria – Eliseina. PA is selling the facility for BGN 10 000. Eliseina, which is located near the town of Vratza, has accumulated debts in the amount of BGN 16 mln, which the future owner should assume. Since there were no candidates, a temporary syndic will be appointed in the enterprise, which last week was declared insolvent by Vratza District Court, the company’s CEO Mr. Slavcho Todorov told. The claim for insolvency has been made by State Receivables Collection agency. Eliseina owes to the state JPY 127 mln (USD 1.1 mln).
Source: Monitor (23.06.2004)

Chinese officials have recently extended the deadline, which was determined as July 1, for scrap exporters to register the government to export subject raw material to the country. Representatives from the Bureau of International Recycling (BIR), Institute of Scrap Recycling Industries (ISRI) and General Administration of Quality Supervision, Inspection and Quarantine of China (AQSIQ) at a meeting held on June 18 determined to extend the deadline to register to export scrap to China. Deadline for registration processes is extended to July 20, 2004. After that day, any exporter wishing to export scrap to China will have to wait till 2005 at the earliest. Moreover the scrap exporters will only be allowed to register provided that they directly contract with companies in China. Exporters, shipping through brokers outside China, will not be allowed to ship to China.
Source: Other (23.06.2004)

Kremikovtzi’s debts as of March 2004 are in the amount of BGN 284.7 mln, according to the report, prepared by the temporary commission in parliament, which is investigating the labour conditions in the plant. The commission was established in the beginning of the year, following the breakdown in one of the plant’s blast furnaces. The report also reveales that the biggest liabilites of the plant are to NEC -–BGN 93.92 mln, followed by State Receivables Collection Agency – BGN 78 mln, NSSI – BGN 62 mln, Bulgargas – BGN 37 mln, and BDZ – BGN 5 mln. According to the report, these liabiliites should be extended in time in order to avoid the insolvency of the plant. Repayment agreements have been signed with Bulgargas, NSSI and NEC. Deputies will demand the Cabinet to make a full analysis of the company’s overall state within a period of 2 months, and then to give account of the specific measures that have been undertaken.
Source: Monitor (24.06.2004)

EC’s delegation to Bulgaria visited the Combinate for Non-ferrous Metals near Plovdiv, in order to make evaluation of the execution of the country’s obligations under Bulgaria’s EU accession negotiation process.
Source: Pari (24.06.2004)

According to recent news in the market, European Union (EU) and Ukraine have recently signed an agreement regarding expansion of the steel quota allocated to Ukraine. In line with the deal, EU increased the quota allocated to Ukrainian steel exports to 606’824 tons, taking country’s sale to new ten members of EU into account. Officials from both sides will examine the draft and with a formal approval, the quota will be effective. The quota division is as follows: 230’879 tons of heavy plate, 80’007 tons of coils, 66’608 tons of other flat products, 93’679 tons of wire rod, 13’481 tons of beam and 122’170 tons of other long products. As previously reported by SteelOrbis, EU increased steel quota allocated to Russia to compensate the possible loss of Russia following the expansion of EU.
Source: Other (24.06.2004)

Rio Tinto Iron Ore today said it had signed long-term sales contracts to supply an additional 40 million tonnes a year of iron ore to leading Chinese steel mills. Under the contracts, subsidiary Hamersley Iron will supply more than 30 million tonnes and the Robe River Joint Venture, which is 53 per cent owned by Rio Tinto, will add 10 million tonnes a year. The contracts, which have an average duration of 10 years, will reach their stated volumes following the completion of the expansion program at the end of 2005. The sales arrangements are in addition to the long-term contract signed in April 2004 between Rio Tinto Iron Ore and Shanghai Baosteel Group Corp for the supply of 7 million tonnes a year of product over 10 years. Rio Tinto Iron Ore chief executive Chris Renwick said the new agreements mean that from 2006, Hamersley Iron would have a total of about 70 million tonnes a year of product locked into long-term arrangements with Chinese steel mills through joint ventures or long term contracts. Robe River will have 15 million tonnes a year under long-term contracts to China.
Source: Other (24.06.2004)

Russian aluminum companies produced almost 1.498 million tonnes of primary aluminum in the first five months of this year, 5.2% more than in January-May 2003, the Moscow-based engineering and consulting firm Aluminum told Interfax. Combined primary aluminum output in Russia, Ukraine and Tajikistan increased 5.7% to 1.691 million tonnes. Ukraine turned out 47,793 tonnes of the metal (2.7% more year-on-year) and Tajikistan 145,469 tonnes (12% more) in January-May.
Source: Other (25.06.2004)

The world's steel companies are set to increase profits by nearly 60 per cent this year, underlining the massively improved financial state of the industry driven by soaring steel prices and rapacious demand from China. According to World Steel Dynamics, a US steel consultancy, the average profitability per ton shipped in 2004 of a group of 33 leading steelmakers will be $107, compared to $67 in 2003 and $58 in 2002. The profit figures are equivalent to a rise of 45 per cent. In analysis presented to a conference in New York - organised by WSD with American Metal Markets, a research group - the most profitable company projected for 2004 will be Tata of India with a figure of $230 per ton, with CSN of Brazil second with $221. The data are based on estimates by WSD of 33 companies, including most of the biggest steelmakers, which are likely to ship roughly 400m tons of steel in 2004, nearly half of global steel output. According to WSD, the strong profits record of steelmakers will continue in 2005 though earnings for many steel companies will drop slightly from levels that the consultancy believes are "unsustainable". In the past two years, prices of many types of steel have doubled, driven by constraints in steel supply as excess capacity has been shut down; heavy demand from China, which now accounts for nearly one-third of world steel consumption; and steady demand from global steel users. Peter Marcus, managing partner of WSD, said it was possible that prices of benchmark flat steel in the US - now at about $500-$600 per ton - could stay about this level and were unlikely to go down significantly because of strong demand. Illustrating the upbeat mood, Keith Busse, chief executive of Steel Dynamics, a leading US steel mini mill, said: "I can see steel prices staying high for some time and certainly beyond the third quarter. I'm feeling bullish also for 2005." Other observers, however, have noted that in recent months demand from China seems to have fallen slightly, because of government efforts to cool down the economy, and as a result they believe the global steel market is likely to decline. Bruno Bolfo, chairman of Duferco, a Swiss steel trading company, said: "I believe in the laws of gravity. The steel market is bound to cool off and it's only a question of when."
Source: Other (25.06.2004)

Companies from Brazil and Japan have emerged as the front-runners in the race for a majority stake in the Teesside operations of Anglo-Dutch steel maker Corus. CSN of Brazil, which nearly merged with Corus last year, and Sumitomo Metals of Japan are thought to head a list of five interested groups. The plant centres on the Redcar blast furnace which employs 2,000 people turning out 3.4 million tonnes of steel slabs. Last year, Corus said it wanted a partner for Teesside and planned to reduce its stake to 25%. The decision was taken when steel prices were lower than present. Corus, which has announced it has returned to the black, estimates that pre-tax profits for the year will be ?125m against a ?57m loss last year. It is also in talks with Alcan, Alcoa and Norsk Hydro about selling its aluminium business.
Source: Other (27.06.2004)

Delegates from 37 steel-producing countries are to meet in Paris Monday and Tuesday to decide if talks on cutting steel subsidies, which are currently deadlocked, should continue. The meeting is to be held under the auspices of the Organisation for Economic Cooperation and Development. The OECD has acknowledged that plans - adopted at a meeting here in December 2003 - to reach an agreement in principle on the future of subsidies before the end of the summer are not likely to fulfilled. That agreement was then to have been presented to the World Trade Organisation. While steel producers concur that subsidies have to go, differences remain on exceptions to the rule that should be respected. Certain countries argue that governments should be able to continue to assist steelmakers with research and development and in their implementation of environmental protection measures. There are also disagreements on special treatment for developing countries that want to subsidise their steel sectors. In addition some countries want to be able impose countervailing duties on steel imports when their domestic steel industry gets in trouble. A source close to the negotiations said the United States and Europe are ranged on one side of the issue with China, India and Egypt on the other. Initially planned for early May, the meeting here this week was postponed in light of differences among the parties, and delegates will have to decide if the process can be saved.
Source: Other (28.06.2004)

Turkey's Borcelik expects a 30% increase in sales in 2004, following the commissioning of its new HDG line in September 2003and the start-up of its second cold rolling mill in April 2004. As a result, the plant's CRC capacity has been doubled to 900KT/year and its HDG capacity is at 450KT/year. The Borcelik plant was officially inaugurated on 19 June. The opening was attended by Turkey's Prime Minister Recep Tayyip Erdogan, Arcelor's CEO Guy Dolle, Borusan's CEO and Borcelik's chairman Ahmet Kocabiyik as well as Erdemir's chairman Recai Berber. Borcelik is owned by Arcelor, Borusan, Erdemir and the International Finance Corporation - the private sector arm of the World Bank. Borcelik's expansions should result in a $90m reduction in Turkish imports. Turkey's CR steel consumption is estimated at 1.800KT/year, and its galvanised steel at 860 KT/yeat.
Source: Other (28.06.2004)

In June, the overall business climate indicator has increased with 2.3 points compared to its level in May. The improvement is due to the favourable situation in industry, construction, retail and the service sector, NSI reported. Industrial enterprises performed better, local orders increase, while the number of orders from abroad is reducing. Managers expect industrial selling prices to grow over the next quarter.
Source: Pari (29.06.2004)

Another BGN 1.54 mln from the state budget will be allocated as subsidy of the metallurgical plant Kremikovtzi. The funds will be granted in the form of state aid, which the company is to receive starting this year and ending in the end of 2006. The money will be used for compensations and re-qualification of the workers, which will be dismissed in the current and the next two years, according to the report, prepared by the temporary commission in Parliament, associated in relation to the breakdown, which happened in the plant on January 10 this year. 3 people died and another 22 were injured in the accident. Besides this BGN 1.5 mln, the state has also poured in the plant another BGN 431.075 mln, which makes the total amount of the funds over BGN 432.5 mln. All the money have been granted in the form of state aid. The state obligation is envisaged in the Steel Industry Restructuring Programme, covering the period until 2007. The programme itself has been approved at a session of the Council of Ministers held in March this year. The document allows Kremikovtzi to reduce its workforce from 6709 people to 5780 people within a period of two year. This means that BGN 1.5 mln will be used for compensation and re-qualification of the dismissed 900 people. The Steel Industry Restructuring Programme was requested by the European Commission as a precondition for the closing of the Competition negotiations chapter. The document included a whole chapter, prepared in the form of a plan for the development and stabilization of the Kremikovtzi plant. Exactly in this plan, the option of cutting jobs in the plant was mentioned, with the aim of increasing the plant’s productivity. The granting of BGN 1.5 mln from the budget has been coordinated with the Competition Protection Commission. The antimonopoly watchdog ruled the state aid was in conformity to the law, therefore it was admissible. The European Commission also allowed the granting of the money, as long as they were to be used for the company’s stabilization. As early as in the middle of 1999, when the company was privatized by Daru Metals (currently Finmetals Holding), the state forgave BGN 393.556 mln of the plant’s debts. BGN 200 930 of them were debts under the Law on Settlement of Non-performing Debts, BGN 183 mln were debts to the state and municipal budgets, NEC and Bulgargas, and BGN 9 626 mln were from a granted, but non-sunk credit from the State Fund for Restructuring and Development. The debts were accumulated before the company was privatized, but were forgiven in the name of its stabilization. Following the privatization, another BGN 100 mln were poured in the plant through the state-owned enterprises NEC and Bulgargas. Both of them have receivables from the plants in this amount, which are due to be completely paid up in 2013. BGN 36 mln of them are state aid, according to the Competition Protection Commission, because the state is crediting the company. According to the report, the plant also has BGN 5.13 mln debts to the Bulgarian State Railways (BDZ) as of March 2004. It turned out Kremikovtzi had not completely paid up all its liabilities to the carrier. Europe will cut some of the financial aid it promised us earlier after we join EU in 2007, if Kremikovtzi does not manage to invest EUR 260 mln in modernization projects, Mr. Ramadan Atalai – Chairman of the Parliamentary Commission, said. Europe has promised to grant EUR 4.361 bln gratuitously over the period 2007-2010. Kremikovtzi’s obligations are included in the steel industry development programme. According to it, the company should invest EUR 256 mln over the period 2003-2007. The funds should be used for the launching of machines for continuous casting, modernization of one of the blast furnaces, and ecological projects. According to Mr. Atalay, if the plant fails to perform its obligations, EU will deduct the granted funds from the financial framework sum. “The other option is EU to request us to close some steel producing capacities,” Mr. Atalay commented. Europe has already asked us to close almost 1/3 of the production capacities in Kremikovtzi ( one blast furnace and some looms), explaining the company has received state aid in its privatization. Kremikovtzi refused to comment the report, arguing they had not received it as yet. Company officials said they had required it from the head of the Parliamentary Commission Mr. Ramadan Atalay yesterday.
Source: Monitor (29.06.2004)

From June 30 on, the base interest rate of Bulgaria's Central Bank BNB is to drop from 3.83 percent down to 2.44 percent, sources from the MoF released. It means reduction of interests on loans. The upgraded credit rating to investment grade BBB- from BB+ was helpful for all in the private sector, who are being granted credits from abroad under more favourable conditions, said IMF Mission Leader for Bulgaria Hans Flickenschild. He said further that the stumping block in the talks held with Bulgaria's Cabinet was the way to reduce the liquidity of banks. The Fund is concerned over the fact that no slowdown in crediting is witnessed, that loans are being granted to people unable to afford paying them back, and the current account deficit grew by 8 percent by end-March.
Source: 24 chasa (29.06.2004)

The Government should review Kremikovtzi’s state, the temporary parliamentary commission, investigating the safe labour conditions in the plant, insisted during yesterday’s presentation of its report in the National Assembly. Deputies, however, did not manage to reach any final decision until late afternoon. According to the conclusions, made by the temporary commission, headed by the deputy Mr. Ramadan Atalay, the majority shareholder (71 per cent) of Kremikovtzi – Finmetal Holding, is not performing its obligations concerning the financial stabilization of the enterprise. This is the main conclusion, made in this report. Concerning the safety in the company, the investigators found serious weaknesses in the organization of the internal control and the technical supervision on the safe operation of the facilities. Workers and employees are not provided with the necessary workclothes and personal protective means. Most of the main equipment has been installed 30-40 years ago and is technically old. Therefore, a conclusion can be made that the plant is operating in a situation of obvious lack of sufficient investments, which is the reason why new equipment is not installed in it. Concerning the privatization, the report found that Finmetals Holding did not perform its key obligation under the privatization contract – to make investments in Kremikovtzi, in accordance with the specific investment programme. This has resulted in the accruing of a total of USD 53 536 043 of defaults. A destraint of the company’s shares, subject to the contract, has been requested, an the court permitted the requested collateral. The company’s incomes from sales over the period 1998-2003 have been unstable. An 11-per cent increase was marked in 2000, followed by significant decrease. In 2003, compared with 1998, 9-per cent smaller amounts of produce were sold. In 2003, the plant’s loss was reduced and a profit of BGN 119 443 thousand was observed. Kremikovtzi, however, has not presented its 2003 financial reports, certified by the company’s auditors, and has not as yet confirmed this result. With the exception of 2000, the company has never achieved any efficiency from its core activity. In 2003, for an income of BGN 0.99, BGN 1 has been spent. The fact that there are some companies related to Kremikovtzi, is a prerequisite for transfer of debts between them.
Source: Trud (30.06.2004)

The facts, mentioned in this report, have been selected tendentiously, and the conclusions made do not reflect fully and objectively what has been made in the direction of improving the labour conditions in the plant. The production results have also been exaggerated, according to the statement of the plant’s management, headed by Mr. Valentin Zahariev. Here are some discrepancies: 1. In April 1999, the company’s debts amounted to over BGN 940 mln., and the booked loss was in the amount of BGN 187 mln. Therefore, many potential investors claimed the company was futureless. In 2003, for the first time in many years, the company managed to register a significant profit (BGN 120 mln), which was confirmed by the audit, performed by a first-class western-European auditing company. For the first time, Kremikovtzi paid a significant profit tax, but these facts have been deliberately missed by the chairman of the commission. 2. Over the period 1993-1999, Kremikovtzi JSC systematically did not pay its liabilities to the budget, which caused major losses to the state. Nowadays, 4 years later, the plant has no outstanding debts to the budget and to the customs authorities. The report missed to mention that Kremikovtzi JSC has reached an agreement for rescheduling and repayment of its debts. 3. The chairman of the commission, absolutely unfairly and partially, misled the deputies by not presenting the non-execution of the privatization contract by the state administration, which resulted in partial non-execution of the privatization contract by Kremikovtzi, but in much smaller sizes. The parliament commission, which existed in 2002-2003, unconditionally proved that some extra nearly BGN 290 mln hidden debts have been claimed towards Kremikovtzi, contrary to article 8 of the privatization contract, BGN 77 mln. of which principal. Of them, Kremikovtzi JSC has paid up efficiently over BGN 46 mln, BGN 19.5 mln. of which have been paid in the state budget. Therefore we have not received a single lev as a compensation, as we should have according to article 28 of the privatization contract. Nevertheless, a total of over BGN 297 mln have been invested in Kremikovtzi. As a whole, Post Privatization Control Agency does not recognize USD 46 mln. chiefly as made investments in an economic way, and which are being contested by Kremikovtzi in court. 4. The report mentions only the negative facts and does not mention the positive things that have been done to improve the healthy labour conditions in the plant at all. Of course, we are far from thinking that all that has to be done has been done in Kremikovtzi, but we have a strategy, which is directly bound to the company’s strive towards strategic penetration on the European market and towards even bigger increase of its production output. There isn’t a single word about this strategy, about the Complex for continuous steel casting, about the giant investment project COREX, in the report.
Source: Trud (30.06.2004)

Yesterday Kremikovtzi’s management asked for the recusal of Mr. Ramadan Atalay - Chairman of the parliamentary commission, investigating the labour conditions in the plant, in a letter, addressed to the Chairman of the National Assembly Mr. Ognyan Gerdjikov. According to Kremikovtzi’s management, there is a serious conflict of interests involved in the case. The reason is that in the 90’s Mr. Ramadan Atalay was director in Kremikovtzi. He is prejudiced and subjective, and has deliberately misled the members of the commission. Kremikovtzi’s official also complained they had learned about the report from the media and had not received an official copy of it as yet. The management was invited to answer certain question only a few days before the commission’s mandate expired.
Source: Trud (30.06.2004)

Kremikovtzi’s net debts, according to the company’s accounting balance sheet, are in the amount of BGN 476 mln. For comparison, when it was privatized back in 1999, its debts totaled BGN 648 mln. In 2003, Kremikovtzi’s liabilities to NSSI were settled. Their payment was rescheduled and is due over the next 36 months. The payment of the company’s debts to NEC and Bulgargas was rescheduled over the next 10 years. In 2003, the plant employed 7930 people, compared to 15 000 before the privatization deal. During the privatization, the average monthly wage in the enterprise was BGN 401, while now it is BGN 604. In 1999, the company’s incomes from sales were in the amount of BGN 639 249 mln, while in 2003 they reached BGN 680 mln.
Source: Trud (30.06.2004)

Yesterday, deputies argued for five hours without reaching any decision on the report prepared by the temporary commission, investigating the labour conditions in the Kremikovtzi plant. Following a few-month’s investigations, the commission made a complete analysis of the labour conditions and the execution of the company’s privatization programme. The conclusions, which were made, are quite explicit – Kremikovtzi’s managers did not perform a single obligation under the privatization contract and did not manage to provide safe labour conditions, neither did they make the promised investments. They did not manage to stablilize the financial state of the enterprise either. Besides, the plant has been polluting Sofia in scales much higher than the allowed ones without being punished for that. “As I read the report, I have the feeling that Kremikovtzi is not in Bulgaria at all, because the plant has been systematically violating the local legislation”, UDF deputy Mr. Valentin Vasilev commented during the debates. On behalf of his parliamentary group, Mr. Vasilev suggested Parliament should oblige the Cabinet to undertake urgent measures to collect the state receivables from the plant. The commission itself insists the Cabinet should only make a new evaluation of the plant’s state and control the execution of the plant’s viability plan, which is a part of the national strategy for the restructuring of the steel industry. According to deputies, Ministry of Economy, in its role of a principal, did not implement efficient control over the execution of the obligations, envisaged in the privatization contract. “The report of the temporary parliamentary commission, investigating the labour conditions in Kremikovtzi, could have been much more emphatic, but we tried to find some compromise decisions, so that the national viability plan could be executing under the Government’s control”. Thus, the BSP deputy and member of the temporary commission Mr. Atanas Paparizov explained the motives of his colleagues to entrust to the Cabinet the final decision about the possible ways of protecting the state’s interest in the country’s biggest metallurgical enterprise. His colleague from the commission Ms. Rositza Totkova from UDF, was more self-critical, explaining that the tragic labour conditions in most of the heavy productions in the country are also due to the lack of adequate legislation. She reminded that the adoption of a Law on Labour Inspection, which should regulate the obligations of this institution, had been discussed for a long time now. “Currently, the inspection is collecting the necessary social security contributions, which is not a part of its obligations”, Ms. Totkova explained. She also pointed out the urgent need of differentiated social security, which should be fixed depending on the safety of the labour conditions in the respective enterprise. Currently, regardless of the investments made in labour safety, these contributions are equal for all employers. Following long debates, the deputies canceled their final decision for today.
Source: Dnevnik (30.06.2004)

Shumen-based aluminium company Alcomet, 74.6 per cent-owned by Turkey's Alumetal, has earmarked USD 14.5 mln for investment exercises in 2004, Dnevnik learned from Ivan Dinev who liaisons with investors. Alcomet posted higher sales of extrusions and rollings in January-April 2004 while monthly output rose 500 to 2,000 tons. YTD date sales totalled BGN 40 mln versus BGN 68 mln for the entire 2003. Alcomet still markets only 10 per cent of its output locally.
Source: Dnevnik (01.07.2004)

USD 9 800 and BGN 700 were stolen from the cash-box of Bourgas metallurgy factory Promet in Debelt. The robbery happened about 5 o’clock on Tuesday, the police announced. The cash-box of GBS - Bourgas JSC – Bourgas was emptied the night after. The thieves entered the office, situated in the SMK building on Bourgas. They force opened the safe and scrounged the employees’ wages.
Source: Standart (01.07.2004)

The Netherlandish steel giant LNM corporation announced Thursday that it would raise its annual procurement in China to 200 million to 300 million US dollars by 2005 to 2006 from the current 5 million US dollars. LNM's purchasing plan will cover fireproof materials, ferroalloy, coke, graphite electrode, design of metallurgy project, whole set equipment and project contracting, according LNM CEO Malay Muckherjee. The second steel company in the world, LNM produced 38 million tons of rolled steel last year and recorded sales totaling 12 billion US dollars. Its output is expected to top 42 million tons this year as a result expansion of its original capacity and taking in other steel and iron plants. Malay Muckherjee said LNM needed to buy 10 million US dollars of raw materials, metallurgical equipment and fittings from around the world annually, to meet the demand of its capacity expansion and acquisition. Meanwhile, LNM is stepping up its investment in and trade with China. LNM has announced to set up a solely-financed cold rolled sheet plant in Yingkou City of northeast China's Liaoning Province. Last year, LNM exported some 2 million tons of rolled steel to China.
Source: Other (01.07.2004)

Bulgaria's Minister of Finance Mr. Milen Velchev has revoked Alkomet's permit to use the special VAT charging scheme. The company was virtually relieved of VAT on import goods. Alkomet was deprived of permit due to a breach of one of the requirements for using the scheme by delaying payments to the state. Meanwhile it emerged that Sofia Med, the first company that was granted the VAT preference a year and a half ago, has so far invested EUR 65 million. The company is owned by Greece's Viohalco. A total of 22 companies implementing investment projects worth more than BGN 10 million were given permits to apply the relieved VAT scheme. The biggest investment project is carried out by Maritsa Iztok (EUR 590 million), followed by Globul (EUR 152 million).
Source: Pari (02.07.2004)

Revenues from concessions on the production of ores and minerals last year amounted to BGN 8.322 million, the Bulgarian ministry of economy said. In 2002 concessionaires invested USD 26 million in the operation of deposits countrywide. The economy ministry is suing two companies for outstanding concession commissions. One of them is Kremikovtsi, which owes more than USD 600,000, excluding interest. The other company is Ustrem of Topolovgrad, which operates four mineral deposits. The state claims USD 428,608, including the concession fee and forfeits.
Source: Pari (02.07.2004)

The Korea Trade Commission, the South Korean government's international commerce watchdog, has decided to levy retaliatory antidumping duties on stainless steel bars imported from Japan, India and Spain, officials said Thursday. The 15.39% duty will be applied to the products of Japanese and Spanish steelmakers, while duties ranging from 5.11% to 15.39% will be imposed on Indian-made steel bars, the officials said.
Source: Other (02.07.2004)

Steel producer Iscor Limited, has change its name to Ispat Iscor Limited, the company said on Tuesday. The brand name "Ispat" is associated with the Indian steel company LNM group that recently became Iscor's controlling shareholder. The change followed the approval of the merger between Iscor and LNM group by the Competition Tribunal and will take effect after formalities have been concluded with the regulatory authorities and shareholders. Lakshmi Mittal, chairperson of the LNM group said: "Iscor is now part of a global family of companies that constitute the world's second largest steel producer." "The Ispat brand is highly regarded globally and we believe will bring a number of new opportunities and benefits to Iscor." Iscor chief executive Louis van Niekerk said Iscor was now firmly on the path to becoming a truly world class steel producer, as part of the LNM group. He said LNM's involvement with Iscor, through a business assistance agreement, had already realised significant cost savings.
Source: Other (02.07.2004)

Russian government and regional agencies say that no decision has been reached yet on whether to approve or veto a proposed $200 million purchase by Alcoa of the Samara and Belaya Kalitva aluminium rolling-mills owned by Russian Aluminium (Rusal). June 30 was the deadline for the approvals announced in a joint press statement by Alcoa and Rusal, issued on May 6. "The deal is still under review," Konstantin Dorokhin, spokesman for the Federal Anti-Monopoly Service (FAS) in Moscow, told The Russia Journal. "We don't have any new information on that matter. Our directorate is certain that it cannot give any statements before the conclusion or decision on the question." Kiril Zhitenev, a spokesman for the Rostov region, where the Belaya Kalitva plant is located, added: "While Moscow is silent, we can't tell you anything new." The FAS was newly created a few weeks ago after its predecessor, the Ministry of Anti-Monopoly Policy, was abolished by President Vladimir Putin. The new agency, headed by Igor Artemiev, may be the lead federal government investigator, Dorokhin said. "We don't know who else will have to review the procedure." Other ministry officials say that the FAS will lead, but other ministries, including the security agencies, are likely to add their views before the government issues its decision on whether to approve or disapprove the proposed deal. A Kremlin source has said that the Kremlin is aware of the Alcoa purchase, and is investigating the activities of Oleg Deripaska, controlling shareholder of Rusal. Deripaska runs Rusal through a Moscow-based holding company called Basic Element, and whose other interests include stakes in paper and pulp, auto building, electricity generation, and insurance. In their deal announcement two months ago, Alcoa and Rusal said they had agreed on a sale and purchase of the Samara and Belaya Kalitva plants. Alcoa also said that the deal required Rusal to allocate supplies of primary aluminum to the mills, while semi-fabricates produced at the mjills would be made available to can production and other fabricating units Rusal retains. Samara Metallurgical is one of the world's largest producers of aluminium semi-fabricates, sheet products, forgings and castings, with a design capacity of 800,000 tonnes per annum. In 1998 it was producing at just 10% of that capacity. Output was raised to 199,404 tonnes in 2002, but last year, Rusal admits, it fell by 13% to just under 174,000 tonnes. That is just 22% of capacity. The Belaya Kalitva Metallurgical Plant is much smaller, with design capacity for 250,000 tons of rolled products. Production in 2003 was just 41,430 tons; that was up 8% on the 2002 result, but just 17% of capacity. According to a website posting by Rusal's CEO, Alexander Boulygin, "this transaction arises from Rusal's strategy to focus on its strengths upstream, as a leading producer of primary aluminum and alloys." Late in May, Russia's Accounting Chamber issued a report of its financial audit of the financial operations of the Chukotka region, whose governor is Roman Abramovich. Abramovich, who amassed a fortune through the Sibneft oil company, was a 50% stakeholder in Rusal until he sold a 25% bloc of shares to Deripaska last autumn. According to the Accounting Chamber report, the Chukotka government has issued several hundred million dollars worth of tax privileges to a list of 22 enterprises. "In 2003," the report says, "the sum of foregone revenues in connection with the granting of tax privileges stipulated by the local legislation, has amounted to 13,7 billion roubles [about US$472 million]. Privileges have been given to 22 enterprises registered in Anadyr, including Trading House Aluminium, Open Company Billings, Trading House Russian Foil, Open Company Omolon, and a number of others. The specified enterprises did not conduct active economic activities in the territory of the district." A search of Russian corporate registration files has turned up confirmation that Trading House Aluminium and Trading House Russian Foil were registered in Anadyr, in Chukotka. On October 19, 2001, the two companies are recorded as having founded a Moscow company, Russian Aluminium Finance LLC. All three companies are part of the Rusal group. At the time, and until September 2003, Abramovich's holding company, Millhouse Capital, controlled 50% of the shares of the Rusal group, while Deripaska and his holding, Basic Element, controlled the other half. Each took substantial dividends from the after-tax profit of Rusal. Thus, if Abramovich's regional government issued savings on tax for the Rusal group, Abramovich could have benefitted personally from the concomitantly larger dividends Rusal paid him. Andrei Belyaev, chief spokesman for the Accounting Chamber, says that he can confirm that in all, the tax privileges issued to all enterprises totaled Rb13.7 billion, but he said the Chamber report does not provide itemized amounts for the individually named companies. Asked specifically about the Rusal group companies, Belyaev said that tax relief was "detected in the schemes in which the 22 companies participated. We did not make conclusions about what money was washed away by whom. We just certify the fact of financial activity of these companies in Anadyr city without physical activity in the region." John Mann, a spokesman for Abramovich, Millhouse Capital, and the Chukotka regional government, has issued the response that the Chukotka special tax zone legislation required that "investors who received tax breaks in accordance with [Chukotka] legislation were required to invest no less than 50% of their total tax savings in state projects in the region." Belyaev confirmed this is the legal requirement. Arguing that the Chamber had found "no infractions of the law", Mann claimed that "as of January 1, 2004, [Chukotka] received more than 14 billion roubles (about $483 million) in investments under agreement signed with investors by the current administration." Belyaev disputes this: "the 14 billion number is not in the report. We don't have information about the value of such investments." Rusal spokesmen Fred and Yevgeniya Harrison were asked to say what was the value of the tax privileges the group received through Chukotka; what business they did in the region; and what investments they have made in the region. They did not respond. Independently, a Rusal source confirmed that the group's companies did not invest any money in Chukotka. The Accounting Chamber auditors, Belyaev told The Russia Journal, are not able to itemize the value of the tax breaks issued to the beneficiary companies, nor the value of their spending in Chukotka, if any. "They did not examine the affairs or accounts of each enterprise."
Source: Other (02.07.2004)

22-years old Ms. Iva Tzvetanova Tzvetkova – the owner of Sofia-based company Kalista SP JSC bought the only briquette factory on the Balkans Brikel (TPP Maritsa-East 1) SPJSC – Galabovo for BGN 29.2 million through an open-bid tender. The initial price was BGN 8.2 million. The auction for the sale of 1 219 642 shares, representing 100 per cent of Brikel’s capital was conducted on July 2, 2004 - Friday. The biding step was BGN 200 000. Papers for participation in the tender were bought by eight candidates. However, only four of them paid the BGN 4 mln deposit and submitted final offers – Eurometalcommerce – Pernik, Vives JSC – Sofia, and Kalista 2004. The bidding itself was extremely interesting. Eurometalcommerce gave up when the price reached BGN 9 mln, and the other two companies continued to compete. According to the Daxy register, Pernik-based Eurometalcommerce SP Ltd. is ownership of Mr. Ludmil Danailov Stoikov, who is also partner in 14 other companies, including Stomana Industry, Eurometal and the vacation village Dyuni. Vives JSC holds shares in the power repair companies in Galabovo, Sofia, Plovdiv, Varna, Kresna, Bobov Dol and Rousse. Ms. Veneta Kostadinova Nikolova and Mr. Milan Ivanov Gornichev hold 50 per cent in Vives JSC each. Kalista 2004 was registered in Sofia City Court on March 11 2004, and its principal place of business and registered office are located on 3020, 34 Industrial Zone, fl.6. In the same building, but on a different floor, are registered ten of the companies of Mr. Hristo Kovachki – one of the biggest investors in Bulgarian power engineering, who, during the tender, was sitting right behind the new owner of Briket.What is curious in this case is that the telephone number of Kalist 2004 is the same as the phone number of two of the companies, owned by the Samokov-based businessman – Danesto SP ltd. and SVA-Sofia SP Ltd. Mr. Kovachki himself refused to comment and left the tender immediately after the name of the winner was announced.
Source: Banker (05.07.2004)

On a closed session held two weeks ago the Government decided to start a procedure for the election of an executor of NPP Belene. A principal decision to close down NPP Kozloduy as an independent company has been taken, where 5th and 6th unit will be transferred as a non-monetary contribution by the state in the future NPP in Belene. This was announced by Minister of Energy and Energy Resources Mr. Milko Kovachev. The decomissioned 1st and 2nd unit will be controlled by the nuclear funds, which are financing their final decommissioning. 3rd and 4th unit will follow the same fate after 2006. This decision of the Cabinet is only principal, Mr. Kovachev said. He did not explain why it had not been announced so far. The competitions for election of a company to build NPP Belene and of a financial consultant will start in the beginning of August. The winner should be chosen by the end of this year, and in 2010 the first unit in Belene should start operating. Meanwhile, the Government will start persuading large-scale industrial electricity consumers to become partners of the state in the new NPP, Mr. Milko Kovachev said. Union Miniere, the owners of Stomana – Viohalco, Solvay-Sodi, etc., are among the companies which will be invited to take part in the undertaking. They are expected to agree, because they want to able to predict electricity prices, Minister Kovachev explained. Thus, the state will hold between 51 per cent and 80 per cent of the shares in the future plant, which will cost some EUR 2.5 bln. Most of the contribution will be in the form of 5th and 6th unit, the platform in Belene and the equipment bought so far. There will also be some financial contribution. The Government is currently leading negotiations with Evratom to provide financing in the amount of EUR 350 mln. The rest of the funds are expected to be provided by export-crediting institutions of the states of the winner companies. There may also be some state guarantees, at least for some of the credits. All three consortiums, with which negotiations have been held so far, are invited to take part in the consortium. One of them is the consortium between Canada’s AECL, Italy’s Ansaldo, and Japan’s Hitachi. The second one is between France’s Framatom, and Russia’s Atostroyexport, and the third one is Skoda, which is involved in a project, supported by US-registered Westinghouse.
Source: Sega (05.07.2004)

As of May 31 2004, Bulgaria’s state and state-guaranteed debt was in the amount of EUR 8.79 bln. Our country’s internal debt reached EUR 1.27 bln., and the foreign one – EUR 7.52 bln. Since the beginning of the year, BGN 843.3 mln worth of principals and interests have been paid (respectively BGN 634.6 mln on the foreign debt and BGN 208.7 mln of the internal debt). Over the review period, Bulgarians have been paying mostly in EUR – 30.8 per cent, followed by USD – 29.4 per cent, and BGN 24.8 per cent.
Source: 24 chasa (05.07.2004)

Businessmen are complaining that the simplified imports procedure that came into force on July 1, 2004, is not actually easing the import process. Under the simplified procedure, the clearing of goods through customs will be possible without customs declaration for companies with a minimum of 15 import transactions monthly. At the same time, a number of additional conditions will have to be met by importers, including the presentation of an invoice or a warehouse receipt stating the sender, receiver, the type and the quantity of the goods. Thus the procedure burden in fact doubles and takes more time, because later the importer has to fill in a customs declaration, according to importers. Importers protested mostly against the 100% guarantee of the landing charges. Now I have to pay in advance and my money are blocked, an importer complained. Other importers recognised just one relief, the fact that they do not need to have constantly cash for the landing charges. Furthermore, the customs information system BIMIS does not include the new module and the customs clerks will have to take down all the information manually in registers, importers said.
Source: Pari (05.07.2004)

Bulgaria generated a budget surplus of BGN 709.748 million under the consolidated fiscal programme at the end of May 2004, the Ministry of Finance said. The budget surplus has risen by BGN 181 million from April. It stood at over BGN 618 million for the first five months of 2003. The budget surplus is expected to reach at least BGN 500 million at the end of the year, according to estimations of vice premier Lidia Shuleva. Fiscal reserves grew to BGN 4.642 billion at the end of May from BGN 4.415 billion at the end of April. Consolidated budget revenue increased by BGN 1.277 billion to BGN 6.375 billion, of which taxes stand at over BGN 5 billion. Total state budget revenue totals BGN 4.2 billion, which is 46.9% of the total amount drafted for the year. Consolidated budget expenditure stood at BGN 5.666 billion for the first five months of 2004.
Source: Pari (06.07.2004)

The biggest greenfield foreign investors in Bulgaria” • OTE – over USD 500 mln in Globul. • American Standard – over USD 100 mln in the plants for sanitary faience and fixture near Sevlievo. • Liebherr – USD 40 mln in the refrigerator plant near Radinovo, Plovdivsko. • Viohalco – EUR 80 mln in the Steelmet and Sofia Med plants. • Metro – around USD 80 mln in 7 hypermarkets. • Miroglio – over USD 150 mn in 4 textile plants in Sliven, Nova Zagora and Elin Pelin. • Socotab – EUR 30 mln in the plant for processing of oriental tobacco in Radinovo. • Petreko – USD 70 mln in the exploitation of the gas deposit near Galata. • Business Park Sofia – total investment of around USD 100 mln. • Opet Aygaz Bulgaria – over USD 100 mln in the chain of petrol stations. • Praktiker – EUR 50 mln in 7 hypermarkets.
Source: Trud (07.07.2004)

India has requested formal consultations with the European Union over exports of metals to the 25-nation bloc, World Trade Organisation officials said today. The move is a required first step before India can seek a legally binding ruling on whether the EU has breached international trade regulations. The EU imposes extra duties on imports of flat rolled iron and non-alloy steel from India on the grounds that the products are "dumped" at below cost price. India claims that the EU is discriminating against its producers because it doesn't impose similar anti-dumping duties on Egypt, Slovakia and Turkey, even though an EU investigation found that products from those countries also were being dumped. The investigation of Slovakia took place before the country joined the EU on May 1. The two parties now have 60 days to hold consultations. If they can't settle the dispute, India can then ask the Geneva-based WTO to set up a panel of legal experts to rule on the case.
Source: Other (07.07.2004)

Gulf Daily News reported that the construction of a multi-million-dollar aluminium smelter project in Sohar will get under way in mid-2005 with production set to start in 2007. An official at the Oman Oil Company (OOC) said that the stage was set for construction to start in the second half of next year, followed by production two years later. OOC, the state-owned firm, holds a 40 percent stake in the Sohar Aluminium Company.
Source: Other (07.07.2004)

Belgium’s largest metal and special materials producer Umicore expects to post a profit of EUR 400-415 mln from its core activities in 2004, the company’s spokesman told Reuters. This is the figure of earnings before interest & tax (EBIT), and before accounting of losses from the depreciation and amortization of property on the basis of the excellent results of the company’s various fields of business. Umicore is owner of Bulgarian-based Umicore-Pirdop, which extracts copper ore and produces copper.
Source: Pari (08.07.2004)

The budget revenues are over BGN 4.2 billion in the end of May, sources from the council of Ministers announced. It represents 46.9 per cent of the annual revenues expected and is 8.5 per cent more than the same period last year. BGN 2.258 billion (19.3 per cent) more than the 2003 same period are the revenues from indirect taxes. The direct taxes revenues are BGN 1.114 billion, and the non-tax revenues are BGN 860 million.
Source: Sega (09.07.2004)

According to the statement released by Russian Economic Development and Trade Ministry, Russian steel producers will be able to start quota-free exports to US as of July. Russia and the US signed a five-year trade agreement on July 12, 1999. According to the agreement, with the expiration of the agreement, quota for Russian exports will be lifted. The agreement restricted exports of certain Russian steel products to US in return for the suspension of the anti-dumping proceeding against hot rolled steel products imported from Russia. Following the expiration of the agreement, Russian exports are expected to increase in significant amounts in 2004 however Russian steel producers fear US may implement other measures to limit exports with the purpose of protecting its industry.
Source: Other (09.07.2004)

The National Assembly, following discussions on the report, prepared by the Temporary Parliamentary Commission, investigating the safe and healthy labour conditions in Kremikovtzi JSC and the execution of the National Assembly’s decision dated March 29 2002, on the grounds of art. 86, par. 1 of the Constitution of the Republic of Bulgaria DECIDED: 1. Adopts the report, prepared by the Temporary Parliamentary Commission, investigating the safe and healthy labour conditions in Kremikovtzi JSC and the execution of the National Assembly’s decision dated March 29 2002, and finds urgent the adoption of all measures, suggested in the report. 2. Evaluates as non-satisfactory the work of Kremikovtzi JSC’s operative management regarding the creation of healthy and safe labour conditions, environment protection and fulfillment of the company’s obligations to its workers and employees under the Collective labour contract 3. Finds that the majority owner of 71 per cent of Kremikovtzi JSC’s capital – Finmetals Holding JSC, does not fulfill its obligations for the financial stabilization of the company, the reducing of Kremikovtzi’s debts to the state creditors – BDZ SP JSC, NEC SP JSC, Bulgargas SP JSC, NSSI and the investment obligations, stipulated in the privatization contract. 4. Evaluates as non-satisfactory the work of the Council of Ministers on the execution of the National Assembly’s decision dated March 29 2002, regarding the coordination of its policy between the Government and the producers and regarding the fulfillment of Bulgaria’s international commitments; regarding the relations between the state creditors; regarding the observing of the owner’s financial discipline; regarding the implementation of the commitments under the privatization contract and the provision of current control over the activities of Kremikovtzi JSC. Evaluates as non-satisfactory the work of the representatives of the state organs in Kremikovti JSC’s managing bodies, in protection of the interests of the state as a co-owner. Obliges the Council of Ministers, within a two-month period: - to examine and evaluate the state of Kremikovtzi JSC; - to undertake immediate measures for the collection of the state receivables from Kremikovtzi JSC; - to specify the measures and guarantees, providing the execution of the National Programme for the Restructuring and Development of Bulgaria’s Steel Industry by the year 2007 on the basis of joint work between Kremikovtzi JSC, Finmetals Holding JSC, the Ruling Committee and the Ministry of Finance as a monitoring organ; - to inform the National Assembly about the results. This decision has been adopted by the XXXIX National Assembly on June 30 2004 and has been sealed with the National Assembly’s official seal. Chairman of the National Assembly: Ognyan Gerdjikov.
Source: State Gazette (09.07.2004)

Canada has jettisoned its July 2, 1999, 41.6% anti-dumping duties on Russian hot-rolled steel as of June 30. In light of the expiration of anti-dumping measures concerning certain kinds of hot-rolled sheet carbon and alloyed steel from France, Romania, Russia and Slovakia, Canada's International Trade Tribunal decided the resumption of steel product deliveries by those countries posed no threat to local industry. The duties therefore expired on June 30 by the Tribunal's decision.
Source: Other (09.07.2004)

Last week, Minister of Energy and Energy Resources Mr. Milko Kovachev managed to surprise everyone – economists, politicians, and his colleagues in the Council of Ministers – with the model for the restructuring of NPP Belene, presented by him. According to the new plan, the two 1000 mW units of NPP Kozloduy will be contributed by the state in the nuclear mega-company, which will continue the building of and will operate the second nuclear power plant in Bulgaria. The company will also include the platform of NPP Belene, which includes “the already built infrastructure and the 1000-mW unit, supplied by the Czech company Skoda years ago”. According to Mr. Kovachev, the company will be associated in early 2005. NPP Kozloduy’s 5th and 6th unit will be detached from the company and will be contributed in the capital of the new nuclear company. The state is to be the majority shareholder in it, where its stake will be between 50 and 80 per cent. In support of his idea, Minister Kovachev also indicated the cluster method, which has been recently actively promoted by Deputy Prime Minister Ms. Lidia Shouleva and enjoys the Government’s positive attitude. According to Mr. Kovachev, in this case, a nuclear power cluster will be created. Major local energy consumers (the names of Solvay Sodi, Umicore and Viohalco were specifically mentioned), as well as foreign investors, are expected to demonstrate interest in taking a stake in the future company. Mr. Milko Kovachev’s statement contains a worrying piece of news – the possibility of building two units of 1000mW each, according to an expert from the consultancy business. “I wonder if big capacities won’t kill some other existing capacities in Bulgaria, which are currently being modernized? Four 1000-mW units will make Bulgaria’s energy system non-maneuver, which is a bad indicator for a market which is expected to be liberalized by the year 2007. Besides, four 1000-mW units would provide production, which will far exceed 50 per cent of what we have as consumption and will practically block competition”, the expert commented. Major energy consumers are not too enthusiastic about the idea of taking a part in Mr. Kovachev’s idea through providing investments. Solvay Sodi’s CEO Mr. Paul Jaquelot stated that the main activity of their company was to produce calcinated soda and they were not interested in the energy business. “Our affiliate Deven, which is a thermal power plant, provides us with the energy resources, necessary for our calcinated soda production: steam and electricity. What is left of these necessary resources, is sold to other clients, including NEC. So we have absolutely no interest whatsoever in the construction of the nuclear power plant in Belene”, Mr. Jaquelot explained. Viohalco’s representative in Bulgaria Mr. Anton Petrov said only principal talks were held with their company. “We know such idea exists, but we are not familiar with any details around it. Taking a decision for participation in such a company is not an easy task. Furthermore, there is no clear economic grounds about the idea, neither there is a clear idea of what our participation in it would be. As a major consumer, we are interested in having safety in the future, which does not necessarily mean we would have to be shareholders in the company”, Mr. Petrov commented. NPP Kozloduy’s CEO Mr. Yordan Kostadinov said this idea was given by the Ministry of Energy and Energy Resources and had not been consulted with them. Consultations would take place after Council of Ministers approved the project.
Source: Capital (10.07.2004)

Foreign Investments Agency’s CEO Mr. Pavel Ezekiev forecasted there would be a new credit rating for Bulgaria within the next three months. The amount of foreign investments registered in Bulgaria over the period January-June is a little over USD 1 bln. This is the biggest sum, ever reached over such a period of time since the start of the changes in Bulgaria, Mr. Ezekiev said. According to the available data, the official amount of foreign investments over the first four months of this year is USD 500 mln. In May and June, Bulgaria has received another USD 500 mln from the privatization of BTC. Another USD 800 mln are expected from the deal for the privatization of the electricity distribution companies, Mr. Ezekiev said. Thus, the total amount of investments made in Bulgaria over the period 1992-2003, will reach USD 9 bln. Data shows that some 60 per cent of this USD 9 bln came over the past three years, Mr. Ezekiev pointed out. Still, most of the direct foreign investments in Bulgaria are made not in small and medium-sized enterprises, which are the moving force of economy, but in monopoly structures, which were until recently operating. Unlike Bulgaria, in USA 80 per cent of the working part of the population is occupied in companies with under 10-people staff. After the signal, given by Bulgaria through the offers for the privatization of the electricity distribution companies, we expect our country to receive a new investment and credit rating within the next three months, Mr. Ezekiev went on. On Friday night it became clear that even the lowest offers submitted for the three pools, would provide for Bulgaria EUR 416 mln.
Source: Sega (12.07.2004)

Bulgaria may become the world’s third biggest manganese exporter, along with China and South Africa, said Mr. James Haslam, CEO and majority shareholder in UK’s Oreyest P.L.C., which is investing in the building of a new manganese groove near the village of Obrochishte. According to Mr. Haslam, who is participating in an international business forum in Sofia on the topic of investment in environment protection, manganese may bring to Bulgaria billions of dollars. In March, manganese prices reached USD 1600-2000 per ton.
Source: Monitor (12.07.2004)

Parts for European cars will be made in a plant near Radomir. Germany’s Khun Technology has bought two halls and the adjacent land from Radomir Metali Engineering JSC, the town’s mayor Mr. Georgi Stoev announced. By the end of 2007, the company is to invest EUR 8 mln in the facility. Initially, the plant will be producing mud-guards and door-stills for EU, and the production range will gradually be expanded to all types of spare parts for western cars.
Source: Standart (12.07.2004)

Industrial production decrease is reported in Bulgaria for two consecutive months, the official statistics data shows. Production in April has decreased with 10.3 per cent compared to March, and with 0.3 per cent in the next month. The biggest decrease is observed in the radio and TV equipment production as well as leather and shoe production. However a 20.4 per cent production increase is observed compared with the respective month of last year.
Source: Monitor (13.07.2004)

Net incomes from retail of household products and appliances have increased with 19.3 per cent in May, NSI announced. Trade of textile, clothing and shoes has marked an 18.2-per cent increase, while sales of pharmaceutical and medical products have grown with 14.9 per cent Trade of automobiles and fuel and car repair has swollen 14.7 per cent. Wholesale over the review period posted an increase of 8.9 per cent, mostly as a result of the bigger trade of machines, equipment and parts for them and trade of household products.
Source: Monitor (13.07.2004)

Russia’s largest steel company Evrazholding was forced to cut its rolled steel production output with 3 per cent down to 5.9 mln tons in the first half of 2004. Production was reduced chiefly in June, while in January and May it went down by only 1.7 per cent. The company undertook these restrictive measures following decision by the Chinese government to slow down the overheating of the country’s economy, as well as to prevent Russia’s steel market from over-supply. In 2003, Evrazholding produced 13.8 mln tons of steel, 12.3 mln of which rolled. Nevertheless, Evrazholding expects China – one of the world’s largest steel markets, to remain a stable consumer. Since the beginning of the year, steel prices have gone down significantly on the world markets. Meanwhile, the Russian steel giant was forced to cut, though just a little, its steel exports to the countries from South East Asia, but is already marking recovery of its export amounts to these regions.
Source: Pari (13.07.2004)

The world’s biggest aliminium producer – Canada’s ALCOA, is to shut down one of its three blast furnaces on Saturday. The move will result in the reduction of the company’s annual production from 403 000 to 270 000 and is aimed at supporting the metal’s prices.
Source: Pari (13.07.2004)

Angola-based state-owned diamond mining company Endiama sold 40 per cent of its shares to South Africa’s Mineral Density Group in return of its participation in a project for the exploitation of a diamond deposit. Angola expects the project to bring to the country some USD 900 mln as early as 2004 and over USD 1 bln in 2005.
Source: Pari (13.07.2004)

A US copper industry group has attacked Chinese practices, justifying its petition to Washington for limits on exports to China by arguing that Beijing is meeting its voracious demand for the metal by engaging in "smuggling, bribes and illegal subsidies". The Copper and Brass Fabricators Council (CBFC), which filed its claims with the Department of Commerce last week, attacked a host of practices which it alleges are pursued by Beijing in the latest potential clash between the US and Chinese manufacturing interests. "Chinese government ownership and control, preferential tax treatment, customs fraud, disregard for the global copper market, and currency manipulation are a lethal combination and have unfairly increased the cost of doing business for those of us who practice integrity in such matters," Joseph L. Mayer, CBFC president and general counsel said in a statement. China, whose copper imports rose 16.5 pct to 2.6 mln tons in 2003, was blamed for much of the tremendous gains in prices on the international markets last year. Although fears of a slowdown dampened prices, they remain at historical highs. The US industry group claims that China is taking an increasing proportion of US scrap, leading to supply shortages and price distortions on the global market. It outlined five complaints about Chinese trading practices, including local government protection of an increasingly decentralized industry, price distortions on the Shanghai Metal Exchange and preferential tax treatment of some domestic producers, including rebates on the 17 pct value-added tax. This last claim is similar to that made by the US semiconductor industry, which last week claimed victory when Beijing effectively agreed to end the subsidies extended to domestic chipmakers. The CBFC also claimed that the Chinese currency is artificially undervalued by about 40 pct relative to the US dollar, to which it is pegged at around 8.27 yuan.
Source: Other (13.07.2004)

The report, prepared by the temporary parliamentary commission on Kremikovtzi JSC, is what we expected – a tendentious report, which we disagree with in three main directions, Kremikovtzi’s CEO Mr. Valentin Zahariev stated. He explained the first one referred to the labour safety in the plant. We intend to introduce new high-quality medical servicing of the employees, to improve the quality of the food, Mr. Zahariev said. The second point of disagreement is the one concerning the state aid. This is not money, granted to Kremikovtzi directly, it was given to us as a credit. The third point we disagree with is related to a dispute with PA, Mr. Zahariev added.
Source: Pari (14.07.2004)

June v/s May consumer prices index stood at 98.2, while inflation was –1.8 per cent, NSI announced. The biggest drop over the review month was posted by food products – with 4.2 per cent, while the prices of non-food products were down 0.5 per cent. A slight increase was observed in the service sector prices – with 0.2 per cent. Inflation since the beginning of the year is 0.2 per cent, and compared with the period January-June 2003 – 6.6 per cent.
Source: Pari (15.07.2004)

The first catalogue of local foundry companies was presented yesterday by the initiators of the project – Branch Chamber of Machinery Construction and Bulgarian Industrial Association (BIA). The brochure contains information about technical opportunities for companies operating in the branch. The catalogue will also be distributed overseas, so that investors are able to choose a foundry, able to produce their mouldings.
Source: Sega (15.07.2004)

The US Assistant Secretary of Commerce for Market Access and Compliance William Lash, in his recent statement, announced that the US has no plans of implementing any measures to limit steel imports from Russia. As reported last week, the quotas on certain steel products imported from Russia would be lifted as of July 12, 2004 under the scope of the agreement signed between the US and Russia back in July 12, 1999. The steel products that have been subject to quota limitation include galvanized products, cold rolled products, tubes, slabs and long products. The fact that the quota limitation would be lifted created concern among Russian steel producers as the US might consider implementing other measures to limit exports of steel products from Russia. However, the recent statement indicates that the US does not have such an intention.
Source: Other (15.07.2004)

OAO Russian Aluminium denied a Kommersant report that its sale of two rolling mills to Alcoa Inc. was delayed because the plants make metal used in fighter jets. Russia's Federal Antimonopoly Service also said the newspaper report was untrue. Alcoa spokesman Kevin Lowery said the Russian regulator asked for information on the plants' business plans once they were integrated.
Source: Other (15.07.2004)

The minimum social insurance thresholds and floor wage in Bulgaria’s machine building industry will be raised with 10-15 per cent starting next year, the chair of the National Syndicate Federation “Metal-Electro” Mr. Asen Asenov announced yesterday, after the collective labour contract for the machine building enterprises was signed. The contract was signed following more than two-and-a-half-year long negotiations between employers, syndicates and representative of the branch chamber. The contract will become effective backdated as of July 1 and will be valid until the end of 2005. The main accent in it is the framing of minimum social insurance thresholds between BGN 180 and BGN 220 for the qualified employees in the branch. According to the contract, the thresholds will be applied as floor wages in the enterprises. One of the moments, disputed most by employers during the negotiations, was the problem whether they should observe the contract’s stipulations or determine the labour relations on the basis of individual criteria, Eng. Ilia Keleshev – chair of the Bulgarian Interbranch Chamber of Machine-Building pointed out. The contract is also regulating the role of the syndicate structures within the enterprises. Some of the other accents in it are the increasing of the social activity funds, allocated for raising the employees’ qualification, as well as the extra-payment for labour conditions in case of incidents. According to data provided by the branch chamber, around 100 000 – 120 000 people are employed in this branch. The members of the chamber are 210 machine-building enterprises, which makes 80 per cent of the plants operating in this branch. The contract will apply to all of them. This is the first collective labour contract in the branch since 2001, when its privatization was completed. Currently, 97-98 per cent of the companies, operating in it, are private. Machine building industry has been developing with an upward trend over the past five years. 2003 incomes from sales amounted to over BGN 2.1 bln, compared to some BGN 1.4 bln in 1999. Current prices last year were up 10.5 per cent. 2003 exports was over 45 per cent, more than half of it being destined to EU. Machine export was from 80 to 95 per cent.
Source: Dnevnik (16.07.2004)

EU companies are becoming more and more interested in ordering mouldings from Bulgarian foundries and investing in the production of moulding elements, the chair of the local Branch Chamber of Machine Building Mr. Ilia Keleshev announced. Information about local producers, however, is hard to find. At the same time, local companies, operating in this subsector, are small and are not able to support their own marketing. The first catalogue of Bulgarian companies, operating in the field of founding and forge-press production, as well as production of joining elements, has been worked up in aid of both investors and producers. It provides detailed information about the capacity, equipment, typical mouldings and the use of the produce of more than 50 local foundries. We want to popularize the companies from the subsector abroad, therefore the catalogue is releasing in English as well, Mr. Mircho Mirchov – manager of the project Economic Growth and Investments of the US International Development Agency, which co-operated in the preparation of the catalogue, said. The catalogue was realized with the aid of the Foreign Investment Agency as well. Founding production is of major importance not only to the machine building industry, but also to many other economic branches. One of the factors, influencing the decision of foreign investors whether or not to invest money in a certain country, is exactly the presence of subcontractors, such as the founding companies are, Mr. Ludmil Mihailov, deputy chair of the Foreign Investment Agency, said. The subbranch, however, is experience sharp need of technical and technological renovation, according to the branch chamber. Over the past ten years, investments in it have been more than modest. Until 1989, some 450 000 t cast iron mouldings and 120 000 steel mouldings were produced in Bulgaria. The number of founding companies and units in the machine building, power engineering, electronics and electrical engineering industries was over 200. Most of the produced mouldings were used in the manufacture of machines and motor trucks. Following 1990, some of the biggest foundries in the country were closed down – Stomanoleene – Rakovski (producing steel mouldings), and Vesletz – Vratza (producing cast iron mouldings). Currently, the number of local foundries is under 60. Most of them are small, self-contained parts of machine-building companies, some of the major ones being Chugunoleene JSC – Ihtiman, Radomir Metali JSC – Radomir, Progress JSC – Stara Zagora, Metacom SLZ JSC – Pleven, Osam JSC – Lovech, Ralomex JSC – Radnevo. Currently, some 70 000 t of mouldings are produced in Bulgaria. Half of them are being exported. However, they are of low technological quality, therefore they are sold at low prices. Nevertheless, over the past few years, a number of foundries made some investments in new equipment. One of them is Chugunoleene JSC – Ihtiman, where a new moulding line and equipment were bought for BGN 8 mln. Immediately afterwards, 51 per cent of the company were bought by a Dutch investor. Progress JSC – Stara Zagora and Madara JSC – Shoumen have also invested in new equipment. On the territory of Optikoelectron – Panagyurishte, the German company Zi Industrie Gesselschaft has bought a hall for production of aluminium mouldings under pressure. Another German company has bought the aluminium mouldings production capacities in the former magnetic carriers plant in Pazardjik. The things that attracts most foreign investors to Bulgarian founding industry are low production costs and low moulding prices. On the other hand, it’s a natural thing for a country to outsource its production, which pollutes the environment and does not offer local workers attractive labour conditions, the branch chamber argues.
Source: Pari (16.07.2004)

Because of the exceedingly low steel prices over the past 15 years, steel producers have been trying to make profit through reduction of production costs on the background of global economic stagnation, which has been losing grounds since mid-2004. Currently the world’s steel branch is developing well. Steel demand mainly by the automobile and petro-chemical industry is growing. Demand remains poor only by the construction industry. One of the main stimulus for the growing steel production output, is increasing demand by China and India, as well as by Japan and South Korea. China is raising its local steel production, but, despite its efforts to slow down its overheating economy, it continues to look for import of ever growing amounts of steel products. India’s economic development is accelerating the rates and the shortage of steel for the railway and industrial projects in the country is expected to maintain for a long period of time.
Source: Pari (16.07.2004)

Following the sharp jump of nickel prices at LME which have reached over 14 500 USD/t since the beginning of 2004, in the end of June China’s stainless steel makers reduced stainless steel prices (type 304 and type 201) with almost 109-115 USD/t. Nickel quarter deals were made at LME starting from a 15-year maximum of 17 250 USD/t in January this year, to around 11 000 USD/t in the middle of May. In July, however, the metal’s quotes were moving between 14 500 USD/t and 15 500 USD/t. Exactly this maintains the high prices of stainless steel and the low profits, registered by producers. In Europe, hot rolled steel type 304 with thickness of 2 mm has been traded at 2450 USD/t since the beginning of July, compared with 2400 USD/t in June. The prices of the same type of steel CIF Hong Kong from South Korea and Taiwan jumped to 2200 – 2300 USD/t. Therefore, Chinese traders were forced to sell this type of steel offering discounts, which practically exist in the country to avoid illegal imports.
Source: Pari (16.07.2004)

Following 5 years of restrictions for Russia’s US imports quotas, the contract between the two countries within the World Trade Organization (WTO) expired on July 12 this year. Now, big Russian producers, such as Evrazholding and Severstal, intend to expand their steel production and to strengthen their presence on the world steel market, considering the growing steel demand. In the second half of 2004, Russian export to USA is expected to increase sharply, though USA will most probably fined other ways of protecting its local producers and impose some other restrictions. This is mostly valid for hot rolled products. In 2003, Evrazholding produced 13.8 mln t of steel, 12.3 mln t of which consisted of round rolled products. In the first half, the company hut its round rolled production output with 3 per cent down to 5.9 mln t, which was aimed at preventing Russia’s local market from possible oversupply and price collapses. According to Russian producers, the steel market in Southeast Asia is already reviving and exports may continue to grow at fast rates.
Source: Pari (16.07.2004)

Yevrazholding Group, Russia's largest steel producer, said Friday that net income at its two biggest mills surged 100-fold last year to a total of $174.2 million as steel prices rose amid increasing demand. Western Siberian Iron & Steel Plant, known as Zapsib, earned $108.8 million, compared with a loss of $10.3 million in 2002, Moscow-based Yevrazholding said in an e-mailed statement. Nizhny Tagil Iron & Steel Plant's profit jumped to $65.4 million from $12 million. Yevrazholding's three Siberian steel mills produce mostly construction beams and rods, accounting for one-fifth of Russia's total steel output. The closely held company said last year it would shift sales to the domestic market as Russia heads for its sixth straight year of economic growth. Zapsib's crude-steel production rose by 4 percent to 5.9 million tons and rolled-steel output rose by 6 percent to 5.3 million tons, Yevrazholding said. At Nizhny Tagil, crude-steel production rose 3 percent to 5.4 million tons and rolled was up 2 percent to 4.7 million tons. The third mill, Novokuznetsk Iron & Steel Mill, earned $9.2 million in 2003, Yevrazholding said, without giving a year-earlier figure. The company doesn't report consolidated results. Its president, Alexander Abramov, is Russia's 12th-richest man, with a fortune estimated by Forbes magazine of $2.4 billion. Yevrazholding plans to raise output 1.4 percent to 14 million tons this year. Production of rolled steel fell 9.6 percent in June, the company said last week, after China's import prices for the metal fell almost 10 percent from the highest in almost 10 years.
Source: Other (18.07.2004)

Bulgaria ranks 78 among 123 countries in the Canadian Fraser Institute latest Economic Freedom of the World, 2004 Annual Report. Bulgaria ranked 103 last year, which means that the country has moved ahead by 25 positions. Economic freedom in Bulgaria is rated with 6.0 from a maximum of 10. In 2001 it was 5.7, in 2000 – 5.1, and in 1995 – 4.6. Among nearly 50 indicators for the economic freedom Bulgaria got its worst rating for the constraints on the capital transactions by foreigners – 1.5.
Source: Sega (19.07.2004)

Slovak-based initial aluminium producer Slovalco expects 4-times higher profits for the first half of 2004 y/y. The company backed up its optimistic forecasts with the higher prices of the metal and increased production, Mr. Milan Veseli, General Director of the company, told Reuters. Over the review period Slovalco has managed to raise its initial aluminium production output to 90 830 t up from 73 204 t y/y. The company expects its production output for the whole year 2004 to reach 158 000 t. Last year, the plant produced 131 998 t of initial aluminium. The average price of aluminium at LME under quarter deals reached an 8.5-year peak of 1845 USD/t in April. On Friday, the metal was quoted at 1728 USD/t. Slovalco exports some 90 per cent of its produce, mainly to Italy. A total of 64 per cent of the company’s shares are held by Norsk Hydro and EBRD, and the remaining part – by the Slovak aluminium producer ZSNP.
Source: Pari (19.07.2004)

US’s Alcoa confirmed it would take part in the USD 2.1 bln project of SUAL in Komi of North Russia, for the building of a new aliminium refinery with an annual capacity of 1.4 mln t by 2008 and the construction of an aliminium plant with an annual capacity of 313-460 thous. t of aliminium.
Source: Pari (19.07.2004)

Dow Jones reports that China's Mineral and Metal Group, or Minmetals, the country's largest metals trader, has outbid Brazil's Companhia Vale do Rio Doce (CVRD) in the running for control of Noranda Inc, the world's third-biggest zinc producer and ninth-biggest copper producer, according to local financial daily Valor Economico. The report, which cited unnamed sources close to the negotiations, said Minmetals made an offer of USD6.0 billion for 100% of Noranda's capital, while CVRD was offering USD5.4 billion for an undisclosed controlling stake, and not the totality of Noranda's capital. Swiss group Xstrata is also seen as a potential buyer of Nornanda. Noranda has said that it is evaluating proposals from several potential buyers.
Source: Other (19.07.2004)

Harris Steel Group Inc. announced late Monday that it's in talks to buy the reinforcing steel business of Lafarge Canada Inc. in British Columbia, Alberta and Saskatchewan. "Although there are no definitive agreements in place or assurance that any transaction will be completed, the parties are working towards finalizing a deal by the end of August," Harris said in a statement. Harris Steel operates as a steel trading business, buying steel from mills and fabricating it into a variety of products for sale to its customers. The company generates annual revenues or more than $500,000. Lafarge Canada is the country's largest maker of cement and concrete-related building materials and also makes finished products such as bricks, paving stones, manholes, and water and sewer pipe. It also provides asphalt paving and road construction services. Lafarge Canada is a subsidiary of building products giant Lafarge North America, which is majority owned by Paris-based Lafarge SA.
Source: Other (19.07.2004)

Production among domestic steelmakers was just over 1.99 million net tons for the week ended July 17. That was up from the nearly 1.96 million net tons produced during the same week last year, but down slightly from the nearly 2 million tons produced during the week of July 10, 2004, according to the American Iron and Steel Institute. AISI is a Washington, D.C.-based nonprofit association of North American companies involved in the iron and steel industry. The organization's data is based on reports from companies representing about 90 percent of the domestic industry's raw steel capacity. Those companies that reported production figures said they were using 89.9 percent of their available capacities for the week ended July 17. That was up considerably from the 83.7 percent capacity utilization they reported during the same week in 2003, but down from the 90.1 percent utilization reported during the week ended July 10, 2004, according to AISI.
Source: Other (19.07.2004)

Canada’s Dundee Precious Metals Inc. is to invest USD 45 mln in gold mining near the town of Krumovgrad. Local inhabitants started subscription against the project because the mine would pollute the air and the water. On the other hand, the people want the project for it will give work to 300 people. According to the forecasts the mine will be exploited 20 years. Prospecting indicates that concentration of gold reaches 17 g per ton of ore in the region of Ada tepe and thus the field is one of the richest in Europe.
Source: Monitor (20.07.2004)

Hungarian steel company Dunaferr Rt has been selected to buy the assets of troubled steel maker DAM Steel Rt, according to DAM's liquidator, Mátraholding Rt. It had made three previous, unsuccessful attempts to sell DAM's assets in a single package valued at Ft 5.3 billion, but was finally forced to offer them piece by piece, asking Ft 2 billion for DAM's real estate, Ft 1.75 billion for machinery and Ft 200 million for a 66.6% stake in DAM's power supplier DAM Energy Rt. The price of the receivables was set at Ft 830 million, and that of stocks at Ft 540 million. Dunaferr now buys all assets excluding stocks of manufactured products, the bailiffs said. MTI reported that Dunaferr paid less than half of the asking price in exchange for a pledge to retain 700 jobs. (Econews, MH 1, Vg 1, Nb 1, NG 1, Nv 5)
Source: Other (20.07.2004)

Investments in Bulgaria’s hi-tech sectors have increased some 40-50 per cent in the first half of 2004 y/y, not considering BTC’s privatization, the Chairman of the local Foreign Investment Agency (FIA) Mr. Pavel Ezekiev announced, explaining the investments were made not only in hi-tech production and software developments, but also in the use of productions, already existing in Bulgaria.
Source: Sega (22.07.2004)

TATA Steel is looking to acquire steel plants in Russia and East Europe ``as and when they become available,'' Mr Ratan Tata, Chairman, said at the company's AGM here on Thursday. It is also studying similar forays on the mining front. Tata Steel has set an export target of 6,00,000 tonnes for 2004-2005. Of this 1,00,000 tonnes is the likely quantum for shipment to China. The company's foreign earnings are projected to rise 20 per cent this fiscal. Tata Steel will explore marketing and technology alliances to gain entry to select markets. On China, Mr Tata said, the country is expected to drive global demand for steel in the near future, at least till 2008, when the Olympic Games are due to be held in Beijing. Even if that activity fades out, there is the infrastructure development activity along China's east coast to maintain strong steel consumption.
Source: Other (22.07.2004)

Two buildings of the former ammonia-sulphate unit in the coke-chemicala production of Kremikovtzi were detonated as a part of the company’s ecological programme for previous ecological damages. Following the clearing of all grounds, included in the programme, some 65 decares of land will be re-cultivated, the plant announced.
Source: Pari (23.07.2004)

All products will be made with a 2-year guarantee, according to the new Law on Consumer Protection, due to be adopted by ministers next week. The seller will be responsible of the product until the day this guarantee term expires. After the defect of the product is found by the consumer, he/she should make their claims within a two week’s term.
Source: Standart (23.07.2004)

STEEL maker Iscor will implement a new pricing policy in October that it says will provide its clients with more certainty and transparency. Iscor, approved for a takeover by world No2 steel maker LNM Group by competition authorities last month, said its steel pricing would continue to be dollar-based, but that it would now apply an actual exchange rate calculation . Iscor previously used a forecastexchange-rate calculation to set prices. The change applies only to flat steel and only to products that are exported. Iscor supplies about 80% of SA's demand for flat steel, widely used in manufacturing of roofing, pipe and tube, packaging, appliance, automotive and structural and engineering industries. Many of Iscor's customers have complained about a lack of transparency in the company's pricing policy.
Source: Other (23.07.2004)

RusAL, the biggest Russian alumium group, plans to produce 2.6 million tonnes of primary aluminium this year, a senior company executive Leonid Krylov has, the Interfax news agency reported on Friday. RusAL, which ranks number three in world aluminium production, produced 2.588 million tonnes of primary aluminium and alloys last year. The group intends to increase production of primary aluminium to five million tonnes in 2013, Krylov, who is deputy director in the aluminium division, said. The increase would be achieved by developing current capacity, through acquisitions and through the construction of new factories. The company would produce 3.1 million tonnes of alumina this year, rising to eight million tonnes in 2013. RusAL produces 70 percent of aluminium produced in Russia and accounts for 10 percent of supplies to the world.
Source: Other (23.07.2004)

Six ministries will be included in the coordination committee, controlling the decommissioning of capacities in Kremikovtzi. The members of the committee are Deputy Minister of Finance Mr. Ilia Linogrski, who is also its head, Deputy Minister of Economy Ms. Evgenia Koldanova, Deputy Social Minister Mr. Rumen Simeonov, Deputy Minister of Environment Ms. Manoela Georgieva. The representative of the Ministry of Transport is the deputy of Bulgaria’s Deputy Prime Minister Mr. Nikolay Vasilev – Mr. Nikola Yankov. The representative of Ministry of Energy and Energy Resources is Deputy Minister Mr. Angel Minev. All members will be responsible for watching how the plant is implementing its viability plant by the year 2007, which was approved by the cabinet this spring. According to the plan, the company is obliging to close 1/3 of its capacities, because it had received state aid before the privatization. According to EU legislation, state subsidies in steel industry are not allowed, and if such have been granted, they should be compensated through production close-downs. Kremikovtzi should invest EUR 256 mln by the year 2007. A part of the money will go for the putting in exploitation of continuous steel founding line, EUR 63 mln will be invested in the modernization of one blast furnace for cast iron production, EUR 56.1 mln will be invested in ecology. The state obliged to grant to Kremikovtzi some BGN 1.54 mln in the form of state aid. The funds will be used for compensation and re-qualification of the plant’s workers, who will be dismissed over the next 2-3 years. Kremikovtzi is the only local metallurgical company, currently implementing a viability programme.
Source: Monitor (23.07.2004)

Pernik-region’s biggest enterprises of structural significance are to establish the first cluster in Bulgaria, Pernik’s regional governor Mr. Dimitar Kolev, announced. The union will include Stomana Industry, mines Otkrit vagledobiv, Toplofikatzia-Pernik, Elektrorazpredelenie, ViK (water supply and sewerage), as well as a number of smaller companies. The aim of the cluster unions is through the establishment of specific inter-branch groups to apply with projects before EU pre-accession funds. According to the chairman of the Bulgarian Industrial Association Mr. Bojidar Danev, Bulgaria should not repeat the mistake of not assimilating the funds of almost EUR 90 mln under the SAPARD programme. We expect serious financing from the European Environment Protection fund and these funds should be used, Mr. Danev pointed out. The managers of the Pernik-based companies have already expressed readiness with projects, which will be taken an inventory of and brought up-to-date. The cluster is an instrument of the new economic policy of the government, Mr. Dimiter Kolev emphasized. Such cluster unions are successfully working in Spain and Austria. In Bulgaria, a similar business structure is unofficially operating in Sevlievo.
Source: Dnevnik (23.07.2004)

Europe’s biggest copper producer, the German company Norddeutsche Affinerie foresees favorable perspectives before the red metal in 2004 and consumption growth that will steady prices at higher levels. The Hamburg-based Norddeutsche reported profit after taxation of EUR 8.9 mln for the second quarter of the year 2004. The company produced 138 000 tons of copper cathodes in the second quarter, by 1 t less as compared to 2003, and 269 000 tons of concentrate, which is by 25 000 tons more as compared to the same period of the last year. According to Norddeutsche, mining companies as a whole are making good money now. After company data, China only consumed 21 per cent more copper over the first three months, demand in Japan increased by 14 per cent, and in the US – by 9 per cent. In the words of experts next year the red metal will go slightly down, but its prices will stay above USD 1 per pound. Shortage of metal and vigorous demand of large volumes by China will remain the determinants in 2005. Slump in world stocks backs high prices of the metal. Quite soon though, stocks may crash down to critically low levels. At the same time shortage will fall down from 590 000 tons in 2003 to nearly 230 000 tons at the end of 2005. The critical level will not be reached since China allows copper from its strategic stocks. At the same time the country produces some 1.7 mln tons of the needed 3 mln tons, while trying to cool its overheated economy.
Source: Pari (26.07.2004)

Copper production came out from the crisis. The jump of the international prices of metals from the end of last year brought the industry back in the money. Companies unfroze their investment plans and announced ambitious intentions. Until 1990 six copper ore extracting and processing companies and combines worked in Bulgaria. They extracted ore from 16 mines and then processed it in 9 ore dressing factories. Annual extraction amounted to 15-18 mln tons of ore, from which 50 000 to 65 000 tons of copper were produced. Some 13 000 people were employed in the extraction and processing of copper ores. Most of the metal mines were closed gradually over the years of transition because of depletion of ledges, adverse technical and market conditions or wrong management decisions. Nowadays only three mines are going: two opencast – Elatsite and Asarel, and one underground – Chelopech. Ore output as a whole is a highly energy-, capital- and labour-consuming industry, it is conservative and this is the reason why it has been adjusting to the market economy conditions more slowly, Velichko Strashilov, Chairman of the Supervisory board of Elatsite – Med JSC, explained. Elatsite experienced a serious crisis in the course of adjustment. The company has been working since 1999 after privatization of the old copper-producing enterprise Elatsite by management-employee buyout (MEBO). Majority shareholder in the MEBO company is Geotechmin and the management is entirely Bulgarian. The period immediately after the privatization, when the most acute organizational problems emerged, coincided with the period of critically low prices of copper and other non-ferrous metals, Strashilov told. Then copper cost from USD 1 300 to 1 700 per ton. At the same time prices of inputs jumped. This forced the company that employed 1700 people to hold up the import of spare parts for maintenance of equipment, its renewal, as well as the extraction works in the mine. However, in October 2003 prices started upwards and reached the record-breaking USD 3 000 per ton in six months. Now they are steadied at USD 2 600-2 700 per ton. Last year the mine managed to achieve profit of BGN 13000, and for the first quarter of 2004 the profit is BGN 1.5 mln. The new favorable conjuncture unfroze the investment plans. The biggest hydraulic excavator in Europe RH120E has been digging in Elatsite for a month. The investment is to the value of USD 10 mln. It will prolong mine’s live with at least 10 years as some 100 mln tons of ore are expected to be extracted for that period. The annual extraction of ore is 11.5 mln tons, but the trend is for it to drop down to 10-8 mln tons in the next five-six years. Between 160 000 and 180 000 tons of copper-gold concentrate, which is sold mainly to Umicore – Pirdop, are expected to be extracted from the ore per annum. It contains 23-25 per cent of copper and from 7 to 10 g of gold. In other words, annual production of unalloyed copper is 36 000 tons and 1.5 tons of gold. Elatsite is actually the biggest producer of gold in Bulgaria. EUR 30 mln more will be invested in the development of the eastern field of the mine in the next ten years. According to the experts some 270 mln tons of ore will remain in the recesses, which means that through additional investments its live may be prolonged up to 35 years. Underground extration of ore is being considered. In order to make better use of the investments, we are searching for other fields in the immediate vicinity of the mine, explained Strashilov. Asarel During the second half of the year 2004 Asarel will carry out a new ambitious programme, which will lead to the discovery of the half-year record-breaking 16 mln tons of mining mass, announced from Asarel-Medet JSC. Thus, slightly over 11 mln tons of copper and copper-pyrites ore will be extracted throughout the year, from which 40 000 tons of copper will be produced. Contents of gold are negligible and have no industrial importance. The mine was privatized in June 1999, as 75 per cent of its capital went in possession of Asarel-Invest JSC, majority property of the Austrian Foest Alpine Intertrading. Production is sold to Umicore – Pirdop, Foest Alpine Intertrading and Transamine. Nature has been none too generous to the field and we are facing great challenges, they say in Asarel-Medet. One of them is the complex mineralogical composition of the ore, which contains large amount of clay. This impedes production of metals and increases costs of processing. The field is of low copper content. The company was the first to start effective extraction and dressing of copper ores with copper contents under 0.4 per cent. That is exactly why we are working vigorously for the improvement of technology of production processes in order to decrease costs, they explain in Asarel-Medet. The project for technical and technological development and improvements of the US engineering company SRK is to this purpose too. Contracts for delivery of ore-extracting and dressing equipment worth USD 20 mln were signed in April. USD 9 mln more will be invested in 2005. Thanks to this the extraction of the red metal will exceed 88 per cent. Asarel-Medet are proud to be the first Bulgarian company in the high-risky heavy industry to introduce an integrated quality management system ISO 9001, system for environment conservation ISO 14 001 and for labour safety and healthfulness OHSAS 18 001. Chelopech The new owners of mine Chelopech have also recently announced ambitious investment plans. In September 2004 the Canadian company Dundee Precious Acquisitions through its subsidiary Dundee Precious Metals acquired the assets of the insolvent holding company Navan Mining, which in 1999 bought 75 per cent of the capital of Chelopech JSC. The Canadian company is planing to invest over USD 100 mln over the next two years in the increase of mine’s output. Currently it is working at 50 per cent of its capacity and is not bringing profit, the CEO of Chelopech Mining JSC said. The main useful component of the copper-gold-pyrites ore extracted here is the gold, while copper is attendant. The ratio is 1 g of gold per 1 per cent of copper. The ore contains also silver. 150 000 troy ounces of gold will be produced in Chelopech by 2006. Initially, USD 40 mln will be invested in ore extraction increase up to 1.5 mln tons per annum. For that purpose modernization of the infrastructure, construction of inclined structure for access to the ore from the mine and expansion of the processing factory are projected. Currently the annual production of concentrate amounts to some 750 000 tons, of which 55 000 troy ounces of gold and 5 000 tons of copper are extracted. Later on the company will build an installation for oxidization under high pressure, which will allow production of gold and silver at the site. Currently the concentrate is being processed in metal works in South America and China because of the high contents of arsenic in it (4-5 per cent). Depending on output capacity, additional investments will be between USD 60 and 100 mln. The Canadian company has also a license for prospecting the gold field at mount Ada tepe near Krumovgrad. The investment planned for the research is to the amount of USD 5 mln. The company is already preparing the documents for the transformation of the license for search and prospecting into a concession for extraction of gold. The assays made showed very promising opportunities for outcast extraction. According to preliminary data gold contents in the ore are 4.6 g per ton.
Source: Pari (26.07.2004)

Strikes are being waged at several North American mines, affecting more than 25 percent of the continent's iron-ore supply, and threatening to disrupt steel production and drive prices up further.The work stoppages, including several mines in Canada and coming as labor contracts expire at some U.S. mines, haven't yet affected steel prices greatly because most steelmakers keep extra supplies of iron ore. The United Steelworkers of America, which represents workers at both steel and mining companies, has seen prices for steel and its ingredients rise over the past year and is less inclined to grant the same kinds of concessions it gave steelmakers two years ago. Last week, about 1,400 USWA workers at Iron Ore Co. of Canada in Labrador City, Newfoundland, went on strike, stopping production. Iron Ore is a division of London-based Rio TintoPLC. Earlier this month, 575 USWA workers went on strike at two Wabush Mines operations in eastern Canada. Those facilities are owned by U.S.-based iron-ore company Cleveland-Cliffs Inc. and Canadian steelmakers Dofasco Inc., and Stelco Inc. Prudential analyst John Tumazos said most North American steel mills have two months' inventory of iron ore, but a strike of more than 30 days could pose a problem. Analysts say protracted strikes could affect steel production at companies like Ispat International's Ispat Inland Inc. and Stelco. Both Ispat Inland and Stelco say they have other sources and don't expect to be affected.
Source: Other (26.07.2004)

The Foreign Investment Agency (FIA) has registered one official from each Bulgarian municipality. Their names, addresses and telephone numbers are in the FIA database and they will be responsible for providing services to companies developing projects at a value higher than BGN 50 million, FIA CEO Mr. Pavel Ezekiev said.. Fines of BGN 5,000 will be levied on those who fail to carry out their tasks. The training program of the 260 officials is carried out with the cooperation of international and Bulgarian organisations in several stages and will be held in September. All required permits, licenses, construction visas and other certificates will be issued in accordance with the system of administrative services.
Source: Pari (27.07.2004)

The first regional cluster in Bulgaria was established in Pernik following initiative by the Bulgarian Industrial Association (BIA) and the local administration. BIA’s Chairman Mr. Bojidar Danev had a meeting with the directors of enterprises, operating in the mining, energy, metallurgical, and machine building industries. They discussed the opportunities for combined activities. Through the regional cluster, companies will be able to apply more successfully for the granting of funds under different projects, financed by EU’s pre-accession funds. The clusters unite a network of inter-connected or complementing rival companies, united on a geographic basis. They use a common specialized infrastructure, labour market and services. In EU members, similar strong cluster policy is implemented in Austria and Spain. In Bulgaria, clusters are rather technologically regional, BIA pointed out. There are such clusters in the Maritza pool, in Rousse, and in Sevlievo. The future regional cluster in Pernik will unite Otkrit vagledobiv mines, the local heating company Toplofikatzia-Pernik, the local electricity distribution company, and Stomana Industry. The companies, involved in the cluster, must make an inventory of the previously developed projects, which have not been approved for financing, observing EU’s latest requirements.
Source: Pari (27.07.2004)

Beijing has ordered Zhejiang's provincial government to punish six officials involved with Ningbo Steel, a giant project that illegally expanded its operations in the booming port city of Ningbo, on the Yangtze River Delta. The authorities have also ordered Ningbo Steel, a Sino-foreign joint venture found by central government investigators to have broken laws governing project approval, land approval and environment protection, among others, to be restructured. The crackdown is part of a series of tough actions that began early this year as China's leaders attempted to cool fixed-asset investment in its overheating industrial sector, particularly in steel, cement, construction and carmaking. The Ningbo project, which began construction in June 2003, has been linked to multimillionaire entrepreneur and National People's Congress member Zhang Zhixiang. Zhang is chairman of Jianlong Steel, a partner in the project.
Source: Other (27.07.2004)

The Sofia city court initiated on Monday insolvency proceedings for Kremikovtzi on a petition filed by local company Stroykomplekt which is trying to collect 520,000 levs from the Sofia-based metallurgical plant. The news was confirmed for Dnevnik by Kremikovtzi supervisory board chairman Bozhko Bonev. The official rebutted claims that a temporary administrator is already in charge of the company and said an appeal against the insolvency motion will be submitted on July 28. Stroykomplekt, which is the first creditor to seek Kremikovtzi's insolvency, bought the 520,000 liability under a debt cession deal before the 1999 acquisition of the metals firm by Daru Metals. The debt was assigned to Stroykomplekt by a company that had supplied water pipes to Kremikovtzi. Since the debt transfer was priced at 1 lev, the management concluded that it was dealing with phantom supplies and refused to pay the debt, Bonev said. It is ridiculous to kick off an insolvency procedure over a liability worth only half a million levs when the assets of the company are valued at many millions, said Bonev. The temporary administrator manages a company undergoing insolvency proceedings until the end of the procedure. If the company is adjudicated bankrupt, a permanent administrator is appointed. Kremikovtzi's liabilities exceed 500 mln levs, found a parliamentary committee after scouring the books of the metallurgical plant for several months earlier this year. The Stroykomplekt petition could be joined by other disgruntled creditors. So far the government prevented major state-owned creditors like the National Electricity Transmission Company (NETC), Bulgargaz and BDZ from collecting forcefully their debts from Kremikovtzi, a company with some 7,000 workers. Kremikovtzi and NETC clinched a deal in 2003 to reschedule over a ten-year period a debt of 70 mln levs owed to the power utility. The rescheduled debt, however, represents only 31% of the overall amount owed to NETC. Under a similar agreement, Kremikovtzi rescheduled in 2003 a debt of 25 mln levs owed to gas supplier Bulgargaz. The metallurgical company also owes 4 mln levs to national railway carrier BDZ. No government official was willing to comment on Tuesday the launch of insolvency proceedings against Kremikovtzi. The towering red ink of the metallurgical plant has forced Finmetals Holding, which owes 71% of Kremikovtzi, to seek new partners. After futile negotiations with Italy's Gruppo Mercegaglia, Kremikovtzi said in April 2004 that India's Ispat was to conduct a due diligence and could sign an agreement for joint management.
Source: Dnevnik (28.07.2004)

Representatives of the world's second biggest steel maker, India's ISPAT, are already surveying Bulgaria's Kremikovtsi and will take over part of the plant's management, the PARI daily learned. Alok Gupta of ISPAT, who will join the company's management board, was officially presented to the board of directors Tuesday. The Indian company was willing to buy some of Kremikovtsi's production facilities but the shares of the steelmaker were blocked by the court at the request of the Post-Privatisation Control Agency (PPCA), which rendered the deal impossible, insiders commented. The agency claims USD 23.759,890 in forfeit and interest for default on the 2001 investment programme, according to which USD 46,608,647 had to be invested in the company. Legal debates are also under way between Kremikovtsi's owner, Finmetals Holding, and the PPCA over the investment commitments for 2002 and 2003. Also Tuesday, a temporary receiver was appointed at Kremikovtsi by decision of the Sofia City Court, knowledgeable sources told the PARI daily. The bankruptcy procedure was initiated by Komplektstroy, one of the steelworks' equipment suppliers. The debts of the company to Komplektstroy amount to more than BGN 300,000. Kremikovtsi has debts to other suppliers as well, but they have not filed lawsuits, PARI's sources explained. In 2003 the steelworks rescheduled its BGN 36,725,460 debts to state-owned National Electric Company and Bulgargas for ten years. The report on the labour conditions and the draining of Kremikovtsi has to be ready by August 10. The parliament gave the government two months to prepare the document.
Source: Pari (28.07.2004)

Moscow and Brussels agreed on Russia increase the imports of steel in the EU by 1/3 in 2004. The agreement was signed yesterday and Brussels officially said that the increased quota is on account of the EU enlargement. The new quota for Russian output is 438 216 tons up than the previous one (for 2002), which was 1.384 mln tons. Meanwhile, US biggest steel producer US Steel reported yesterday a 2004 second quarter profit as compared to the loss reported for the same period last year. Giant’s profit is USD 211 mln as compared to the loss of USD 49 mln for the second quarter of 2003. US Steel’s revenues for the same period amount to USD 3.47 bln.
Source: Pari (28.07.2004)

The three-month copper futures fell down by USD 15 per ton to USD 2699 per ton, and aluminum went up by USD 2.50 per ton, reaching USD 1668 per ton. Lead added new USD 14 per ton and was traded at USD 890 – 892 per ton, while zinc discounted by USD 3 per ton to USD 985 per ton. Nickel went down by USD 100 per ton and sold for USD 14 000 per ton.
Source: Pari (28.07.2004)

On Wednesday the 3-month copper futures on the LME steadied at price levels USD 38 per ton higher than the previous day close. Copper was thus traded at 2702 USD/ton. Lead also performed high, after breaking the 900 USD/ton level and set at 915 USD/ton, USD 15 higher than on Tuesday. Lead is on its way to test the February high of 935 USD/ton. Now lead is only 82 USD/ton cheaper than zinc.
Source: Pari (29.07.2004)

Three of the mining giants – companies number one and two, the British-Australian BHP Billiton and Rio Tinto, and the second biggest copper producer – the US Phelps Dodge, reported brilliant results. The first one has extracted record quantities of aluminum, iron ore and copper. BHP Billiton explained its achievement with the sharp rise in China’s demand. It expects also a 70-percent increase in the full-year profit, which will be announced on August 18, on account of the expensive metals. Besides, Rio Tinto boasted of an 18-percent growth in refined copper during the second quarter up to 81 600 tons. The US Phelps Dodge reported a profit of USD 226.6 mln as compared to the loss of USD 15.2 mln for the same quarter a year earlier.
Source: Pari (29.07.2004)

World’s fifth biggest steel producer, the South-Korean POSCO, raised the prices of the stainless steel by 2.9 to 8.2 percent as from yesterday, on account of the expensive nickel. According to the International Steel and Iron Ore Institute data, POSCO, which was the fourth biggest, now is lagging behind the Luxembourg Arcelor, LNM (owned by the Indian Lakshmi Mital) and Japan’s Nippon Steel and JFE.
Source: Pari (29.07.2004)

Aluminum top producer, the US Alcoa, is planning to acquire stakes in two aluminum works in Russia, owned by RussAl, the third biggest producer in the world. These are Russia’s biggest refineries by output.
Source: Pari (29.07.2004)

Bulgarian Privatization Agency (PA) sold Mini Otkrit Vagledobiv SPJSC – Pernik for BGN 5.4 million on an open bid held on Tuesday (July 27, 2004). The buyer is the Sofia-based company Kornikon LTD whose consultant Mr. Hristo Kovachki occupies serious positions in the energy power sector. This caused newspapers commentaries that the buyer is likely to be his man of straw. The company-winner is likely to be recently established, as it is still not listed in the Daxy online register. Its tender documentation was offered on behalf of Chavdar Peichev. Beside Kornikon LTD, both Energetic 2004 SP LTD – Sofia and Eurometal Commerce SP LTD – Pernik took part in the tender. By the way the Pernik-based company took part in the bidding for the briquette factory Brikel as well. This factory also became a possession of the company consulted by Mr. Hristo Kovachki. The owner of Eurometal Commerce – Mr. Lyudmil Stoikov holds stakes in another 14 companies as well. Stomana - Industry JSC – Pernik and Duni JSC – Sozopol are among them. The other company has far lower potential. Nikolay Atanassov Zaburtov (85 per cent) and Dimitar Assenov Bachev (15 per cent) are the owners of the company. The tender’s start was a little delayed as an hour before the official beginning an unknown male voice had signalized for a bomb setting in the privatization department’s building. That caused the tender to be held in a nearby building, but its conduction was quite uninteresting. The PA had announced an initial price of BGN 5.2 million, and the bid should be in amount of BGN 200 000. Both other companies abdicated as far as the second step. This way Mini Otkrit Vagledobiv became a possession of Kornikon LTD. We are expecting to sign the peremptory contract for the sale of the company in 14 days, and then we are to form an expert team to make an overall real assessment of the company’s assets. Only then we will prepare an investment program for the mines operation’s improvement, announced Mr. Viktor Sokachev – the press attache of Mr. Hristo Kovachki.
Source: Banker (31.07.2004)

The most serious menace of Kremikovtzi bankruptcy since it was privatized continued for 8 days. Sofia-based Stroycomplect LTD claimed an insolvency procedure opening for the metallurgic enterprise due to debts of some BGN 520 000. Sofia City Court granted the claim on July 21, but canceled its decision a week later. There is no syndic, no common money bond of the enterprise, the Court has canceled its decision, the chairman of the Supervisory Board of Kremikovtzi, Mr. Bozhko Bonev commented the situation on Thursday. Despite his initial denying, he thus indirectly confirmed the information that yet a receiver had been appointed in the enterprise. Mr. Bonev added that the new evidence presented by the company were related to its capital adequacy and its potential for serving its debts. According to the Court-related sources Kremikovtzi has presented in fact its annual balance sheet for 2003, which shows that the enterprise has achieved an after-tax profit to the amount of BGN 119 million for the first time since its privatization. However, the biggest part of the profit came from re-assessment of the assets, as since 2003 the company has been making its balance sheet according to the International Accounting Standards. The operating profit is BGN 39 million. Yet it is not clear why Kremikovtzi has not paid off to Stroycomplect, as it had no problems serving its debts according to the management. These receivables remain an issue for us, Mr. Bozhko Bonev explained. The concerned Stroycomplect’s receivables have been outstanding since 1999 when the company ordered and paid for metal from Kremikovtzi but still has not received it. Another private company should have made the purchase but later Stroycomplect bought out the taking from Kremikovtzi. Now the metal enterprise’s managers point this fact out as an argument for the contentiousness of the laibility. However, there are documents showing that the enterprise made an acknowledgement in 2000 for the existing of a debt to the amount of BGN 425 000, which along with the interests now amounts to BGN 520 000.
Source: Capital (31.07.2004)

39.1 per cent of the resources funded in Bulgaria in the period January – May come from Holland, 22.6 per cent – from Austria, and 200.6 per cent – from Switzerland. The official preliminary data of Bulgarian National Bank shows that. According to the information the total amount of the direct foreign investments in Bulgaria are EUR 435.9 million which is a decrease of 22.4 per cent compared to the same period last year. The chairman of the Foreign Investment Agency Mr. Lyudmil Mihailov announced that these are intermediate data that does not reveal the real situation.
Source: Pari (02.08.2004)

The European Commission will approve a EUR 70 million gratuitous support on the ISPA program for the construction of Dunav bridge 2 by the of 2004. The so-called application form was sent to the EC in February. Following the notes changes were made in May. The assessment report on the environment influence of the project is expected to be ready by the end of September. 15 European companies offered participation in the first auction for second Danube Bridge’s projects and construction. The construction is to begin in 2005.
Source: Pari (03.08.2004)

Aluminum and aluminum alloys products maker Alcomet – Shoumen, reported half-year loss to the amount of BGN 888 000, according to the figures in the company’s financial report, published at the stock exchange. As a comparison, for the last year first half Alcomet reported profit of as much as BGN 5 mln. However, company’s revenues from main activity rose significantly. They grew up to BGN 52.3 mln, or 40 percent up compared to last year. The company keeps on counting on its traditional exports, as over 80% of the production are exported to more than 15 countries. Loss is due chiefly to the fall in positive margins from exchange rates variation by some BGN 1.5 mln as compared to the same period of last year. Materials costs also rose highly – they are over BGN 42 mln compared to BGN 30 mln for the first half of last year. Company’s 2004 investment programme sets investments to the amount of USD 14.5 mln. Above USD 16 mln were invested in modernization during 2000-2002. Investing will go on until the end of 2004, as total investments are expected to exceed USD 40 mln.
Source: Dnevnik (03.08.2004)

On August 9, 2004 Montenegro is to announce an international auction for the sale of 65 percent of the shares of aluminum production factory Kombinat Aluminijuma Podgorica – KAP, the SeaNews agency announced. After the three-week public debates the Government in Podgoritza approved in the end of the previous week a plant privatization strategy that stipulates its state’s share sale to be completed on two stages. The preliminary offers are to be accepted by September 6, 2004, and by the beginning of December the candidates should make their final proposals. The Cabinet hopes that the negotiations with the buyer chosen will be finalized by the end of the year. KAP provides half of the industrial production in Montenegro, and 13.5 per cent of the country’s GDP. The enterprise is the largest exporter in Montenegro. Companies from the aluminum sector with annual production of at least 120 000 tons and financial ability of investing; investment groups having annual incomes of at least EUR 500 million; and consortiums of them as well may apply for the purchase. The candidates should also engage to invest in KAP a minimum amount of EUR 100 million. At the same time the Government in Podgoritza is to remit EUR 116.6 from the factory’s debts amounted at over EUR 250 million, and is to give a possibility to the potential buyer for direct negotiations with the creditors for the rest part of its debts payment. According to Reuters the Cabinet will grant concession for bauxite extraction, if the ore is to be processed in the mine. According to the information agencies world’s giants as the American-based Alcoa, the Canadian Alcan, the Russian SUAL, Rusal, the Norway-based Norsk Hydro, and the Switzerland-based Glankor are interested in KAP.
Source: Dnevnik (03.08.2004)

Metal combine Kremikovtzi remits each month some BGN 5 mln to the National Social Security Institute (NSSI) and strictly adheres to the repayment schedule of its debts, minister of labour Ms. Hristina Hristova said. NSSI’s supervisory board rescheduled the company liabilities to the state social security, which according to labour unions data amount to BGN 100 mln, but are officially secret. The reason for NSSI handling combine’s debts again is a technical correction of the exact amount of the liabilities, explained Ms. Hristova. State Receivables Collection Agency never released information about the amount of the state receivables from the company for the reason of being an official secret. Along with the Pernik-based Stomana and the Varna Shipyards, Kremikovtzi has been heading the list of the NSSI 50 most problematic debtors for years, whose total liabilities were BGN 216 mln at the end of the first quarter. The combine employs over 7 000 people and his outstanding debts issue has always been burning.
Source: Dnevnik (03.08.2004)

Steel orders in German steel companies marked a sharp drop in the past few weeks, following the remarkable 25-per cent jump for the first half of 2004. Nevertheless, analysts expect German steel industry 2004 production output to increase with 3 per cent (46 mln t).
Source: Pari (04.08.2004)

Russia steel giant Metchel, which has assets in Romania and Croatia, produced 2.9 mln t of rolled steel in the first half of 2004, which represents a 22-per cent increase y/y.
Source: Pari (04.08.2004)

Indian APEX Chamber of Commerce and Industry announced today that it is contemplating over removing anti-dumping duties on imported steel products to help domestic steel producers. Currently, customs duty on steel alloy is 15% however imports from China are subject to 30% anti-dumping duty, making the total duty 45%. Moreover, steel alloy and non-alloy imported from Russia are subject to duties of 35% and 30% respectively. The Indian Chamber of Commerce and Industry, determining that these higher duty rates make imports from these countries difficult, considers removing the duties so that steel consumers may import from these origins and will not have to face the higher prices of domestic steel producers.
Source: Other (05.08.2004)

The world’s stainless steel output is to grow with 6.8 per cent in 2004, reaching 24.35 mln t, International Stainless Steel Forum (ISSF) forecasted. Next year, production is expected to add another 6.2 per cent, totaling 25.85 mln t, compared with 22.8 mln t in 2003, which is over 10 per cent higher than the previous year. 47 per cent, or 11.4 mln t of the world’s stainless steel output will be produced in Asia, 9.65 mln t – in Western Europe and Africa, and 3 mln t – in America. Eastern Europe is expected to produce some 300 000 t. In 2005, Asia’s share in the world’s stainless steel production output is expected to reach 12.25 mln t, and that of the countries from Eastern Europe – 350 000 t. Western Europe and Africa will produce a total of 10.10 mln t, and America – 3.15 mln t.
Source: Pari (05.08.2004)

Kazachstan’s copper monopolist Kazachmist produced 250.9 thousand of refined copper in the first half of 2004, versus 236.9 thousand tons y/y. Kazachmis, which accounts for around 90 per cent of the country’s total copper production output, produced 38.8 thousand tons in July alone.
Source: Pari (05.08.2004)

Copper prices on the world markets will continue moving up by the end of 2005, due to the limited offering and growing demand, including in China, according to Man Financial forecasts. The average copper quotes this year will be 2656 USD/t, while in 2005 they are expected to reach 2875 USD/t. Man Financial forecasts also include the extreme prices in the first two quarters of 2005, which are expected to be over 3000 USD/t. In 2004, a 661 000 t deficit is expected, while in 2005 it is expected to be around 56 000 t. Exchange inventories, according to Man Financial, have been steadily reducing since April 2002, when they exceeded 1.5 mln t. Yesterday, the International Copper Study Group (ICSG) announced there was a 282 000 t copper deficiency on the market in the first five months of the current year, versus a 282 000 t deficiency in the same period of 2003.
Source: Pari (05.08.2004)

The court-ordered enforcement of debts stemming from contractual obligations or court judgments will be transferred from the court bailiffs to private bailiffs under a new bill crafted by local experts in co-operation with U.S. counterparts involved in the USAID-funded project for the reform of Bulgaria's commercial legislation. The judgment enforcement will also be streamlined by amending the Code of Civil Procedure to limit the opportunities available to the debtor to stall the enforcement proceedings. The bill, expected to be put to a vote in parliament by the end of 2004, will make the valuation and realisation of assets unappealable and will remove a number of procedural bottlenecks related to the serving of summons and the virtually unlimited appeal options available under the current legislation. “If such institution is to be established, it would discipline the market. Each step in this direction is good”, Mr. Anton Petrov, representative of Viohalco for Bulgaria commented. According to him, the currently active low has many weaknesses, which allow debtors to sneak out. Private bailiffs would facilitate trade and relationships between commercial institutions, which would have positive impact on the currently slow procedure, Mr. Petrov commented. “The state should not transfer its functions and thus create blackmailers,” Ms. Mariana Pecheyan, procurator of VSK Kentavar stated. In her opinion, jurists would not be able to collect their receivables themselves and would either resort to the help of “power groups”, or ask for bigger powers. It’s hard to collect receivables, especially from people, who are not willing to pay, Ms. Pecheyan argued. According to her, even though this procedure is applied in the western world, it would not be normal in Bulgaria. “People are still not enough consciousness, we are not as yet up to being correct and decent”, she added.
Source: Dnevnik (05.08.2004)

For the first half of the year the Financial Intelligence Agency has received 208 reports for shady operations amounting to over EUR 30 million. 53.03 per cent of the signals were submitted by the banks, 3.03 per cent – by the customs, and 13.64 from the supervisory bodies.
Source: BTA (06.08.2004)

For one month only, the metallurgical plant Promet has processed the record amount of 36 000 t of steel. Just for comparison, for the whole year 2002, the company produced 50 000 tons. Promet posted a BGN 2.8 mln profit for the first half of 2004.
Source: Banker (07.08.2004)

The trend of growing trade deficit continued in the second quarter of 2004, as a result of which this deficit reached 5.6 per cent of GDP for the period January-May 2004. Considering the fact that exports has been steadily growing, the aggravated trade balance could be explained with the intensive consumer demand for imported products and services inside the country, as well as with the investment business solutions. Raw and ready materials continue to have determining significance concerning the structure of home trade (imports, as well as exports), though the registered increases are smaller than those observed in consumer and investment goods. They occupy the biggest share in the structure of material import (around 41 per cent), as well as in the structure of export (around 42 per cent). The dynamics of this import largely depends on the dynamics of the export of certain groups of products. For example, the trend of growing exports of cast iron, iron and steel (which posted a 25-per cent increase over the review 12-month period), as well as non-ferrous metals (22 per cent increase), is one of the main reasons for the registered considerable increase of ore imports (almost 19 per cent), as well as cast iron, steel, and iron (76 per cent).
Source: Capital (07.08.2004)

A significant decrease in the public procurements is observed in the first 7 months of 2004. By the end of July they were 431. For the same period of 2002 and 2003 they were 2 825 and 2 437 respectively. The biggest decreased is found in the procurements cost up to BGN 30 000. The official data of the Ministry of State Administration showed that. The Ministry of Health Care, Ministry of Agriculture and Forestry, and National Electricity Distribution Company SPJSC – Sofia were the most active contractors.
Source: Sega (09.08.2004)

China's steel prices will stabilise in the second half of the year because of the government's efforts to slow economic growth, the Beijing News reported, citing Mr Huang Jing- an, a researcher at the state-run Iron and Steel Association. Robust demand for steel products and the rising price of iron ore and electricity have boosted steel prices since April, the report cited him as saying. The government's efforts to slow economic growth and raw material shortages will help to stabilise steel prices, the report cited Mr Huang as saying. The country's steel prices rose to a two-week high last week. Steel rod prices gained 700 yuan (S$148), or 24 per cent, to 3,260 yuan a tonne in Shanghai from this year's low of 2,920 yuan a tonne at the end of May, according to Beijing Antaike Information Development, an affiliate of China's non-ferrous metal industry association. China is trying to slow economic growth by clamping down on loans to industries such as steel, cement and real estate. The economy's fast expansion caused energy shortages, clogged the transport system and stoked inflation.
Source: Other (09.08.2004)

A spokesman for the Japanese steel industy stated that an expansion of the current US import monitoring and licensing system could be helpful to US and foreign governments and steel industries by providing information on the status of the US market. However they also warned that the US should not consider any monitoring system that does not conform to WTO rules or one that creates a trade restrictive program. As a result of the tariffs President Bush imposed on certain steel products over two years ago, certain imports were required to be monitored. Despite the President’s repeal of the tariffs late in 2003, the monitoring program for those products remains in place. Furthermore, since the tariffs were repealed, the US steel industry has been pushing for legislation to expand the original program to cover all steel products. However, Japanese steel producers are urging the U.S. steel industry to use its time and energies to work toward improving the supply of competitive products to its American customers rather than seeking government assistance to make it more difficult for these same customers to choose the best quality products.
Source: Other (09.08.2004)

IMF insists on a minimum increase of local wages. A reasonable increase of remuneration in state-owned enterprises, as well as of the floor salary for the country, would maintain Bulgaria’s competitiveness, Mr. Takatoshi Kato, Deputy Managing Director of IMF commented, after the Fund’s board adopted the new preventive agreement with Bulgaria late on Friday. It is to the value of USD 146 mln. The low salaries would stimulate employers to hire non-qualified workers as well, according to IMF. According to the fund, the raising of local salaries is one of the reasons for the foreign trade deificit.
Source: Standart (10.08.2004)

Ukraine's mining and metallurgical complex should reorient itself from targeting the Chinese market and focus on other consumer markets before 2005, Ukraine's Premier Viktor Yanukovych has said. "We need to reorient our mining and metallurgical complex to other consumers, because we may lose the Chinese market by the end of this year," Yanukovych said at a press conference in Kryvy Rih on August 7. He said Ukraine supplies 10-15% of China's metal demand, the government press service said. According to the premier, China's industry is developing very rapidly and before 2005 that country may export from 160-170 million tonnes of steel, experts say. "That almost completely covers all of China's consumption," Yanukovych said. Ukraine should also prepare for the intervention of Chinese metallurgists on the Ukrainian raw materials market, Yanukovych said. "We need to prepare to defend our markets for raw materials so our metallurgists don't end up without iron ore and coke," the premier said.
Source: Other (10.08.2004)

National Social Security Institute’s biggest debtors, which are not in bankruptcy, have begun sinking their debts, said the head of the Institute Mr. Yordan Hristoskov. Kremikovtzi, which has the largest amount of debts – BGN 82 mln, is complying with its deferred payment plan and regularly remits its employees current contributions, added Mr. Hristoskov. It is more difficult for the Institute to collect its due receivables from the mines that were declared bankrupt or are working at a loss. Plama and Varna Shipyards are not paying too. Promet paid off BGN 4.6 mln for contributions and will be canceled from the list.
Source: Sega (11.08.2004)

Half of Bulgarian-made steel is sold overseas, while local building companies use mainly Ukrainian steel, Bulgarian Chamber of Ferrous and Non-ferrous Metallurgy revealed. In the first half of the year, our country has exported 675 600 tons of steel products, versus 535 000 y/y. Export of long products has jumped 2.6 times, reaching 165 100 tons. Export of flat products is smaller - 510 500 tons compared with 473 000 tons in the respective period of 2003. EU continues to be the main market for local steel producers, although a 6% drop in exports, destined to these countries is observed. In the first half of the year, we have sold to EU 369 000t against 392 000 t y/y. The reason for the smaller amount of export are the imposed quotas and duties, the Chamber explained. An increase of exports to third countries, however, is observed. Local building companies mainly use steel imported from Ukraine. They prefer it because it is cheaper. According to the latest 2003 data available, import of hot-rolled rullons and bands in Bulgaria was in the amount of 103 000 t, 58 883 t or 58% of which came from Ukraine. They are sold here at prices of USD 289 while the average prices are around USD 323. More than 17 per cent of the import of sheet iron in Bulgaria also comes from Ukraine. Its price is USD 437, while the average price of this material is USD 677. In general, local production of cast iron and steel has reduced in the first half of the year, compared to the same period of last year.
Source: Monitor (11.08.2004)

The debts of Bulgaria’s 50 biggest debtors to the National Social Security Institute as at the end of 2004 first half are to the amount of BGN 224.351 mln, according to NSI data. The figure includes the principal and interests on it. Compared with the first quarter of 2004, the debts have increased with BGN 8.290 mln. In the first quarter, the debts totaled BGN 216.061 mln. 1. KREMIKOVTZI JSD SOFIA – adopted repayment plan for extension of the company’s debts. 2. STOMANA JSC PERNIK – adopted repayment plant for a part of the company’s debts; adopted rehabilitation programme; 3. MINES BOBOV DOL BOBOV DOL distrained bank accounts (compulsory collection of debts by the State Receivables Collection Agency). 4. VARNA SHIPYARD JSC VARNA – the company’s assets have been sold to NMB and the whole amount has been transferred to Bank Consolidation Company; 5. VIDACHIM JSC VIDIN – compulsory collection of the company’s debts by the State Receivables Collection Agency; 6. BESTTECHNIKA TM-RADOMIR JSC RADOMIR compulsory collection of the company’s debts by the State Receivables Collection Agency; 7. RUDODOBIV I OBOGATYAVANE – KREMIKOVTZI – BRANCH SOFIA JSC SOFIA - distrained bank accounts (compulsory collection of debts by the State Receivables Collection Agency). 8. QUARTZ JSC SLIVEN - compulsory collection of debts by the State Receivables Collection Agency. 9. STARA REKA JSC PESHTERA - compulsory collection of debts by the State Receivables Collection Agency. 10. PROMET JSC DEBELT - compulsory collection of debts by the State Receivables Collection Agency. 11. NOVA PLAMA JSC PLEVEN - compulsory collection of debts by the State Receivables Collection Agency. 12. ROUSSE – MUNICIPAL AUTOTRANSPORT SP LTD. ROUSSE - compulsory collection of debts by the State Receivables Collection Agency. 13. KAVALER JSC SOFIA – distrained bank accounts (compulsory collection of debts by the State Receivables Collection Agency); 14. MARTZA KK JSC PAZARDJIK - compulsory collection of debts by the State Receivables Collection Agency; 15. TREMA JSC TRYAVNA - compulsory collection of debts by the State Receivables Collection Agency; 16. BALKAN AIR COMPANY JSC SOFIA compulsory collection of debts by the State Receivables Collection Agency. 17. BOURGAS PORT SP JSC BOURGAS – adopted repayment plan for the extension of the company’s debts; 18. ORPHEY JSC KARDJALI - compulsory collection of debts by the State Receivables Collection Agency; 19. CHIMCO JSC VRATZA – distrained bank accounts and proposed provision measures; 20. ETAVIA JSC KYUSTENDIL - compulsory collection of debts by the State Receivables Collection Agency; 21. MINSTROY – BOBOV DOL JSC BOBOVDOL compulsory collection of debts by the State Receivables Collection Agency; 22. KITKA JAS NOVI PAZAR - compulsory collection of debts by the State Receivables Collection Agency; 23. BELOPAL JSC BELOSLAV compulsory collection of debts by the State Receivables Collection Agency; 24. MINES MARISHKI BASEIN SP LTD. DIMITROVGRAD – distrained bank accounts; 25. INDUSTRIAL CORPORATION ZELIN SOFIA - compulsory collection of debts by the State Receivables Collection Agency; 26. PIMA JSC MONTANA – production in insolvency; distrained bank accounts; 27. BOURGAS COPPER MINES SP JSC BOURGAS - compulsory collection of debts by the State Receivables Collection Agency; 28. STOMANENI TRABI JSC SEPTEMVRI - compulsory collection of debts by the State Receivables Collection Agency; 29. MICROPROCESSOR SYSTEMS PRAVETZIA - compulsory collection of debts by the State Receivables Collection Agency; in insolvency; 30. GORUBSO – MADAN JSC MADAN - compulsory collection of debts by the State Receivables Collection Agency; 31. GORUBSO – RUDOZEM SP JSC RUDOZEM - compulsory collection of debts by the State Receivables Collection Agency; 32. ELPROM – EMT JSC TETEVEN - compulsory collection of debts by the State Receivables Collection Agency; 33. OSOGOVO JSC KYUSTENDIL compulsory collection of debts by the State Receivables Collection Agency; 34. GERGOV JSC TRUD - compulsory collection of debts by the State Receivables Collection Agency; 35. DINAMO JSC SLIVEN - compulsory collection of debts by the State Receivables Collection Agency; 36. VESLETZ SP JSC VRATZA - in insolvency; 37. IZIDA JSC ELIN PELIN - compulsory collection of debts by the State Receivables Collection Agency; 38. AGROTECHNIKA KARLOVO – distrained bank accounts; 39. DOBRICH JSC DOBRICH - compulsory collection of debts by the State Receivables Collection Agency; 40. PODEM JSC GABROVO - compulsory collection of debts by the State Receivables Collection Agency; 41. NITI SP JSC KAZANLUK - compulsory collection of debts by the State Receivables Collection Agency; 42. MINES PERNIK PERNIK – art. 146 of the Tax Proceedings Code; 43. ROMINA 2000 - compulsory collection of debts by the State Receivables Collection Agency; 44. CRYSTAL PERNIK JSC PERNIK compulsory collection of debts by the State Receivables Collection Agency; 45. SOSTRIKO-S-T SOFIA – distrained bank accounts; 46. BOBOV DOL – TRANSPORT JSC BOBOV DOL compulsory collection of debts by the State Receivables Collection Agency; 47. MARENA DUPNITZA compulsory collection of debts by the State Receivables Collection Agency; 48. MRAZ SOFIA compulsory collection of debts by the State Receivables Collection Agency; 49. BELTRANS PERNIK – distrained bank accounts; compulsory collection of debts by the State Receivables Collection Agency; 50. USTREM – TOPOLOVGRAD JSC TOPOLOVGRAD adopted repayment plan for extension of the company’s debts;
Source: Pari (12.08.2004)

ThyssenKrupp AG, Germany's biggest steelmaker, raised its pretax profit forecast for the year through September because of higher earnings at its steel and automotive divisions. The shares rose as much as 6.6 percent The company expects full-year pretax profit ``to come as close as possible'' to 1.5 billion euros ($1.8 billion), rather than total about 1 billion euros, spokesman Klaus Pepperhoff said. Third-quarter net income at the Dusseldorf-based company rose 28 percent, beating analyst estimates.
Source: Other (12.08.2004)

The 50 biggest debtors owe the National Social Security Institute (NSSI) a total of BGN 224.351 million at the end of the first half-year, the NSSI reported. The amount includes principal and interests accrued. Kremikovtzi heads the rank list followed by Stomana Pernik and Mines Bobov Dol. Other big debtors include Varna Shipyards, Vidachim, Nova Plama, Balkan Airlines, Port of Bourgas, Chimco, etc.
Source: Pari (12.08.2004)

Kremikovtzi’s debt to the National Social Security Institute has decreased to BGN 56 mln, the institute announced, concerning a Sega publication quoting NSSI’s debtors. As Sega previously wrote, the metallurgical plant is regularly paying to the pension authorities the former and current insurance payments in accordance with the sinking plan. The company pays BGN 2.5 mln a month in the form of insurance, because the average monthly insurance income is high – BGN 620, NSSI’s manager Mr. Yordan Hristoskov said.
Source: Sega (12.08.2004)

The managing board of Promet Steel JSC, Sofia convenes regular annual general meeting of the company's shareholders on September 15 2004, which will be held in the administrative building of Rudmetal JSC, Sofia, 1, Dobrudja Str.
Source: State Gazette (13.08.2004)

Mr. Miroslav Borisov was born on August 22 1956. In 1991, he graduated the University of National and World Economy – Sofia, speciality Accounting and Control. After graduation, he worked as a chief accountant of Moststroy, Berbezh unit. Over the period 1993-1996, he was a chief inspector in BNB, and from 1996 until 2000, he worked as a chief accountant of Kremikovtzi. A year later, he became financial manager of Promet JSC. Since May 2002, he has been working as a CEO of Promet Steel JSC. Mr. Borisov, recently Promet Steel was granted a complex permit to prevent and control pollution in accordance with the Environment Protection Act. What are the consequences of this action? - This means that we meet all European standards and that we are an ecologically clean enterprise, which operates in conformity with all standards, applied in EU member states. Promet is the first company from the ferrous industry to be awarded such a permit. The other companies from the branch have also applied, but have not obtained the document as yet. Around 90 per cent of our products are exported, where 80 per cent of exports is destined to USA. US requirements are very high. Production must hold many certificates, which prove its quality and ecological purity. We have an ozone certificate from the Chamber of Commerce and Industry, proving our production is clean. Each element of the fixture that we export has the plant’s mark. On the iron there is an inscription of the name of the producer – Promet-Bulgaria, as well as the brand of the steel. In relation to this permit, that we received, the plant is to be certified under ISO 14001. We already hold ISO-9001, and are about to be certified under ISO – 2001 and ISO 14 001 in the beginning of 2005. This is the first step to the quality sign. Although bought some 15 years ago, the equipment is relatively new in technological respect and provides full opportunities to export to US markets, which means it meets the ASTM standard. We are soon to acquire the DIN standard as well, we are holders of TUF standard for some of our products. We hope this tendency will continue and that Promet will become one of the leading plants on the Balkan peninsula. - You reported big production volume over the past few months. How will the metallurgical plant develop in the future, what are its owners’ plans? - When it was built, the plant was the most modern facility on the Balkan peninsula. In 15 years, it managed to produce some 1 mln tons of produce, e.g. in these 15 years it has practically not stopped working. Since the beginning of 2004, we have produced some 190 000 tons of steel products. Just for comparison, in the whole year 2003, we have produced 128 000 tons of ready products. In 2002, we made some 50 000 tons, and in 2001 – 108 000 tons. We expect the amount of production to reach over 350 000 tons by the end of this year. This practically means that 60 per cent of the plant’s loading capacity will be used. Concerning the future development of the plant – it has been included in the investment programme, adopted by the company’s shareholders. By all means, a continuous steel casting furnace should be built, which will complete the plant’s production cycle. According to plan, the production part of the continuous casting will be ready by 2007. Investment in the new facilities will be fully provided by the shareholders. They total some USD 40-50 mln. - Which companies do you rely on most for the new construction? - Promet Steel will conduct an international competition. We already have offers by the Turkish company Izmir Delir Chelik, Austria’s Fyost Alpine, we also expect offers by other companies. When the submission of offers ends in September 2004, the company’s Supervisory Board will chose the designer and executor of the project. A meeting of the company’s shareholders will be conducted then. - When the new production facilities start operating, where will the raw materials be supplied from? - A part of them will be bought from the domestic market- the so-called scrap, and another part will be imported, mostly from Ukraine. Currently the scrap, made in Bulgaria, is insufficient for the three plants – Kremikovtzi, Stomana, and Promet. Still, they are located in different regions of the country. We use scrap made in the region of Bourgas. Besides, we do not need technological scrap in the production process. When production amounts are increased and we manage to reach the full capacity of our production facilities, the scrap from our own facilities will be in the amount of some 3 000 t annually. Another 10 000 tons will not be a problem and we could buy them from the domestic market, and the rest of it will be in the form of spongy iron, pallets, etc. and will be imported from Ukraine. The furnaces in Kremikovtzi and Stomana-Pernik work under the same principle. - Are there facilities similar to Promet’s in Bulgaria’s neighbouring countries? - There are already such facilities in Greece. They belong to the Viohalco group, which also owns Stomana Industry. There are smaller similar facilities in Turkey and Serbia. We export approximately 10 000 tons of ready products a month to Macedonia, Serbia and Greece. But these markets are not our priority. - Which are your contracting parties on the foreign and domestic market? - America SMS, Arcelor, Mannesmann, Tissen, Fyost Alpine. Some of our bigger Bulgarian contractors are Metalsnab, Stomana Industry. The production is mainly exported through the Bourgas port. Currently, we are the second biggest load provider of Bourgas port, and we have no debts to it. An average of 70 000 tons of products a month pass through it as import and export. We are about to increase these amounts. Since the beginning of the year, we have supplied more than 400 000 tons of materials and have exported over 170 000 tons of products through the port. - What are the financial results, has your company already registered profits? - Promet Steel’s profit for the first six months of the current year is in the amount of some BGN 2.8 mln, which was fully sufficient to cover the company’s former debts. Last year, we had a loss of around BGN 4.5 mln. In 2004, we intend to fully cover the loss. We have improved the work’s organization. In 2003, we started working in the second half. We import mainly from a number of Ukrainian plants, but supplies from them were not regular. The volumes, which were produced considering the plant’s capacity and the expenditures made were not enough to reach a positive result. Furthermore, we are a plant that does not have a full production cycle. We only have a rolled iron part. We buy the raw materials, we process them and then we make the ready product. All used to depend on the market in Bulgaria and Ukraine. Besides, currently prices are extremely favourable for all three companies, operating in the ferrous industry branch. They are the highest for years. Prices are different for the different products, but the average price currently is around USD 480-510/t for exports. Prices are fixed depending on the price of the materials we are processing. The situation is the same in Kremikovtzi and Stomana. Their prices are even higher, because their range of products requires additional processing. Their processing is one level bigger than ours. - Do you have any competitors on the domestic market? - In Bulgaria there is no other metallurgical plant which could compete with Promet. Neither of the other ferrous plants – Kremikovtzi and Stomana, can compete between each other. - Why then can’t you meet the needs of smaller consumers on the domestic market? - We are able to fully meet them but the domestic market cannot meet our needs as yet. It can provide around 15 000 t a month of all of our products and with the whole import of other companies, destined mainly to Ukraine and Greece. And our monthly production is in the amount of 25-35 000 t. - I suppose you still use bank credits? - We are constantly using bank credits. There is no working enterprise, which does not use credits. Currently, the 45 000 t of monthly turnover (USD 480/t which makes USD 16 mln a month) passes through foreign banks, because the debts we used to have did not provide favourable conditions for working with Bulgarian banks. - The company and its new owners have inherited large debts. Do you think the state should introduce some relieves for investors of such large scale? - The investment programme should be reviewed. Because it was created in a period, when the company was privatized. But in this period, shareholders made so many investments, that they managed to take the company out on the world market. These investments exceed the initially planned manyfold. The total amount of investments due to be made over the next two years, will be in the amount of some USD 50 mln. Two new plants will practically be built. One of them will complete the cast iron part of the plant, and will increase the production capacity with 400 000t, and the production part – with around 600-700 000 tons. There are only a few facilities in Bulgaria, which will enjoy similar investments. The state should create additional relieves for investors by introducing changes in the fiscal policy. Considering the fact that Promet’s assets have been evaluated at EUR 30-40 mln, it is strange that the State Receivables Collection Agency has evaluated the enterprise at some BGN 2.5 mln. We have already paid up BGN 5.2 mln of the company’s debts to the state, but we have paid them directly to NSSI, and not through the State Receivables Collection Agency. Our ambition is to fully repay our debts by the end of 2005 first half.
Source: Dnevnik (16.08.2004)

Steel maker Iscor is expected to report a 36% jump in earnings for the six months to June on Wednesday with the help of soaring steel prices. This is in line with record performances for the period by other operations in the LNM Holdings group as Chinese demand continues to drive global demand for steel. LNM's New York Stock Exchange-listed group of operations, Ispat International, reported an almost sevenfold increase in operating income in the six months to June to 584m earlier this month. Ispat International, which has operations in the US, Canada, Mexico, Trinidad, France and Germany, said its average price realisation in the half year was 30% higher than in the same period last year. Iscor, which is set to be renamed Ispat Iscor at the end of the month, has also implemented steep price hikes this year. Flat steel prices alone have risen between 20% and 27% since January.
Source: Other (16.08.2004)

There may be a substantial decrease in the prices of iron and steel in 2005, President of the Russian Association of Metal Traders (RAMT) Alexander Romanov said on Tuesday. "In the next 2-3 years, there will be a surplus of manufactured steel in the world and this will result in a decrease in prices," Mr. Romanov noted. According to him, "in the past 3-4 years the output of steel increased by 200 million metric tons to reach 1 billion metric tons." Southeast Asian countries, which are the major importers of steel, began to make steel themselves. According to him, very soon China will be fully self-sufficient in ferrous metals. China and India's output has been dramatically increasing. In his opinion, this will lead to an excess of supply over demand and a reduction of the world price of metal in the immediate future. Speaking about the Russian iron and steel market, Mr. Romanov noted that Russia's market was open and competitive. Alongside the large Russian mills (Severstal, MMK and Mechel), Ukrainian, Belarussian and Kazakh producers as well as the world's largest metal companies supply metal to Russian consumers. "Therefore, the market can be called competitive but not monopolistic," he said. "Five to ten large companies unaffiliated with one another exist for every kind of product. "And since there is a competitive market, the price on it is a market price. It is difficult to talk of any price collision because it [the steel and iron industry] is continuous-cycle production. A blast furnace cannot be stopped without causing immense losses," Alexander Romanov continued. He said several hundred independent metal trading companies operate on the Russian market. "They buy products from a great number of manufacturers," he said, "and supply them to a great number of end users. That is why the competitive environment is quite real." The expert stressed that he did not support state regulation of prices in this sector. "If the metallurgists are driven into a price corridor, those who sell raw materials to them should be driven there, too," he explained. "If regulation is started, bureaucratic apparatuses several times larger than the existing ones will be needed."
Source: Other (16.08.2004)

World steel producers are preparing to encash their 2004 profit with almost 60 per cent, taking advantage of the significantly better situation in the industry, the higher steel prices and fast growing Chinese demand. According to data by the US consulting company World Steel Dynamics (WSD), the average profit per ton in 2004, registered by the 33 top producers, members of Organization of Economic Cooperation and Development (OECD) will be USD 107 compared with USD 67 in 2003 and USD 58 in 2002. The best performing ocmpany, according to WSD, will be India’s Tata with a profit of USD 230, followed by CSN. According to WSD, the record profits in the business will continue next year as well. Over the past two years, prices of many types of steel have doubled, pushed by the limited offering and the elimination of unnecessary capacities, the increased demand in China, representing 1/3 of world'’ total demand.
Source: Pari (17.08.2004)

The world's second-largest steel producer, LNM Holdings, bought a 51-percent stake in Bosnia's biggest steelworks, BH Steel, for 80 million dollars (65 million euros). Under the deal signed here by the LNM head, India-born Lakshmi Mittal, and Bosnia's Muslim-Croat entity's Prime Minister Ahmed Hadzipasic, the group is to invest at least another 135 million dollars over the next ten years in modernizing the work process. It is the biggest single investment in Bosnia following the 1992-95 war that ruined the Balkans country's communist-style economy. LNM Holdings was selected in June for negotiations on the purchase, after the owners rejected another bid submitted by ISPAT Group of India.
Source: Other (17.08.2004)

NatSteel is aiming to sell its steel business to India's Tata Iron and Steel Company for S$486.4 million (US$283 million), pending shareholder approval. If successful, the deal is likely to be completed by early 2005, and will include NatSteel's regional steel subsidiaries and interests in associated companies in China, Malaysia, Vietnam, the Philippines, Thailand and Australia, as well as its steel businesses, subsidiaries and assets in Singapore. Intellectual property related to the comopany's steel and related businesses, including the NatSteel brand name, will also be included in the sale. Under the terms of the arrangement, Natsteel will transfer its steel and related businesses to NatSteel Asia. Tata Steel will then proceed to acquire 100 per cent equity interest in Natsteel Asia. Natsteel was confident the sale would appeal to its shareholders.
Source: Other (17.08.2004)

Mr. Ashish Saraf, President of India’s Ferro-Alloys Corporation, stated in Nessebar that he would organize a strong Indian business delegation, oriented to local companies, which have not been privatized as yet. Bulgaria is attractive for its tourism opportunities and steel facilities, Mr. Saraf pointed out during his meeting with the Bulgarian Minister of Foreign Affairs Mr. Salamon Passi.
Source: Pari (18.08.2004)

Steel production and tourism are the sectors, in which Indian business may invest in Bulgaria, Mr. Ashish Saraf, a businessman from India, visiting Bulgaria following invitation by our Minister of Foreign Affairs Mr. Salomon Passi, said. Yesterday, the two officials visited Sunny Beach and had a meeting with journalists in the Festa Panorama hotel in Nessebar. Mr. Saraf reminded that Isad – the world’s number 1 steel producer with Indian interest, has signed preliminary contract with Finmetal for the purchase of Kremikovtzi. The businessman himself has a stake in a business, related to production of materials used in steel industry, cigarette packages and alcohol products. We are very serious about the privatization process in Bulgaria, we intend to bring Indian investors here. According to him, India is still not very popular in Bulgaria – last year, only 1200 visas were issued.
Source: 24 chasa (18.08.2004)

An amount in the range of BGN 100-150 million was invested in the mining sector in 2003, Mr. Latchezar Tsotsorkov, CEO of Assarel Medet and chairman of the mining chamber reports. On August 18, branch sources reported that the total value of products, manufactured in this sector in 2003 was BGN 1,036,959,000. This comprises a growth of 104% in comparison to 2002. Official statistics are never 100% reliable as large amounts of the property are private, experts claim. Investments were made primarily by leading companies in the sector - Maritsa-Iztok, Assarel Medet, Elatsite-Med and Kaolin-Senovo. Most investments were made using companies’ private funds. Mining is a risk branch, investments in it are slowly regained, which is one of the reasons why banks are averse to granting credits to companies, operating in the sector, Mr. Peter Petrov, executive secretary of the chamber pointed out.
Source: Pari (19.08.2004)

The European Union (EU) Commission initiates expiry review for the anti-dumping duty orders on steel ropes and cables imported from China, India, South Africa and Ukraine upon the request filed by Liaison Committee of the European Union Wire Rope Industries (EWRIS) on May 17, 2004. The request of EWRIS is based on the ground that the expiry of the measures would be likely to lead to continuation or recurrence of dumping and injury to EU industry. EU Commission has found sufficient evidence to initiate an expiry review for the existing measures on subject merchandise imported from above mentioned countries. Therefore, EU initiates expiry review to determine whether the expiry of the measures would be likely to lead to continuation or recurrence of the dumping and injury to EU industry.
Source: Other (19.08.2004)

As previously reported by SteelOrbis, Canadian Border Services Agency (CBSA) notified Canadian International Trade Tribunal (CITT) on April 2, 2004 that it imposed provisional duties on imports of cold drawn and annealed stainless steel round wire from India, Korea, Switzerland and US. Upon this notification, CITT on April 5, 2004 initiated an inquiry to determine whether the dumping and subsidizing of the subject merchandise have caused injury or retardation or threatened to cause injury to domestic market. According to the final result of the inquiry conducted by CBSA, the weighted average dumping margin for Korea was determined as 181%, for Switzerland 181%, for US 165% and the percentage of subsidy on subject products imported from India was determined as 6.2%. Now, CITT has announced that the dumping in Canada of the aforementioned product imported from Korea, Switzerland and the US and the subsidizing of the aforementioned product imported from India cause injury to the domestic industry. Therefore, the duty margins determined by CBSA will remain in effect.
Source: Other (19.08.2004)

Government has assigned to the Managing Committee for Coordination and Implementation of the National Programme for Restructuring and Development of Bulgaria’s Steel Industry by the year 2007 to coordinate the actions and measures, related to Kremikovtzi’s debts to creditors – state institutions and commercial companies with state interest, the government’s information service announced. According to the announcement, the commission, coordinating Kremikovtzi’s relations with creditors, which was associated in 2002, will terminate its activity, because it has run out of functions.
Source: BTA (20.08.2004)

Workers in the Lead and Zinc Complex in Kardjali are ready to go on strike, Podkrepa and KNSB labour unions announced at a press conference. The decision was made at a general meeting of the metallurgical company’s employees. Tension in the enterprise is growing because wages in it have not been raised for six an a half years. Currently, the average monthly salary there is between BGN 300 and BGN 350.
Source: Darik Radio (20.08.2004)

On Thursday, the Government transferred the supervision of the debts of the metallurgical plant Kremikovtzi to the Managing Committee of the National Programme for the Restructuring and Development of Steel Industry, which will operate until the year 2007. Ministers closed the commission, coordinating the relations between Kremikovtzi and its state-owned creditors, which was associated in 2002, explaining it has run out of functions, because an agreement for settling of the financial problems between the debtor and its creditors (National Social Security Institute (NOI), Chief Tax Directorate, Customs Agency, Bulgargas, National Electricity Distribution Company (NEC), Bulgarian State Railways (BDZ), the ports in Bourgas and Lom, and Napoitelni Sistemi (Irrigation Systems), has been reached. From now on, the coordination of the actions and measures, related to Kremikovtzi’s debts, will be assigned to the National Programme for the Restructuring of Steel Industry. This programme is aimed at bringing Bulgarian metallurgy in compliance with EU production standards. The plant’s debts amount to some BG N500 mln, including debts to private suppliers, according to the report of the parliamentary commission, investigating the plant’s activity following the labour accident in January, in which three people were killed. According to labour union information, the plant’s debts for social insurance are in the amount of around BGN 100 mln. Half a year ago, Kremikovtzi and NOI adopted a sinking plan, according to which the plant had to remit BGN 5 mln a month. This plan was recently corrected. The plant’s BGN 70 mln debt to NEC was extended and is due payable over the next 10 years. Similar agreement was reached with Bulgargas. Recently, Kremikovtzi’s name made quite a stir again, after Sofia-based Stroycomplect addressed the Court, asking it to decalre Kremikovtzi in insolvency, because of a BGN 500 000 debt. The bankruptcy case will be heard in September. Other companies may join Stroycomplect’s claim as well.
Source: Dnevnik (20.08.2004)

Beijing's curbs on mainland steel production as part of its economy-cooling measures are leading to industry rationalisation as firms scramble to survive. Wuhan Iron and Steel Group, one of the country's largest producers, plans to take over three smaller steelmakers - Hangzhou Iron and Steel, Chongqing Iron and Steel and Ezhou Iron and Steel. This amalgamation seems likely to pit Wuhan Steel against the Shanghai Baosteel Group in terms of production capacity. Last year, Baosteel, the largest steelmaker in China, produced 20 million tonnes, posting 120.4 billion yuan (HK$113.50 billion) in sales revenue. Wuhan Steel had revenue of 27.3 billion yuan. Meanwhile, the Shougang Group - now based in Beijing but moving to Tangshan before Beijing hosts the 2008 Olympic Games - is discussing ``close co-operation'' with Tangshan Steel, according to the 21st Century Business Herald. And in the northeast province of Liaoning, Anshan Iron and Steel is reported to be considering a takeover of Benxi Steel. Last year, Anshan Steel produced 11 million tonnes of steel and earned 31.47 billion yuan while Benxi Steel produced 7.2 million tonnes of steel and earned 29.5 billion yuan. The spate of mergers is part of Beijing's strategy. In 2001, the central government drafted a five-year plan for the steel industry, hoping to see five major steel producers emerge - Angang in the northeast, Shougang in the north, Baosteel in the east, Wuhan Steel in the central region, and Panzhihua Steel in the west. But over the past few years leading steel producers have encountered difficulties enlarging because small steelmakers enjoyed local protectionism and demand kept every company profitable. Since Beijing targeted the steel, cement and aluminium industries earlier this year, local steel firms have found their profit margin squeezed, with some struggling to survive. The Economic Observer quotes Wuhan Steel general manager Liu Benren saying an agreement between Wuhan Steel and Hangzhou Steel has been submitted the State Asset Management Commission for approval. If Beijing approves the acquisition, Wuhan Steel will become the controlling shareholder of Hangzhou Steel's Shanghai-listed Hang Zhou Iron & Steel. ``We will not comment on market speculation,'' a Hangzhou Steel staff member said on Thursday. Wuhan Steel also hopes to tap the market in booming Zhejiang province on the Yangtze River Delta. By taking over Hangzhou Steel, which is based in the port city of Hangzhou, Wuhan Steel can cut the cost of its iron ore, mostly imported from Australia. Last week, Shanghai-listed Baosteel announced the issuing of five billion shares to raise 28 billion yuan to purchase the iron and steel assets of its parent company, Shanghai Baosteel Group, which holds an 85 per cent stake in the listed company. The merger will more than double the assets of the listed steel company, making the firm the world's eighth-biggest steel producer.
Source: Other (20.08.2004)

World crude steel production for the 62 countries reporting to the International Iron and Steel Institute (IISI) stands at 589,7-million tons for the first seven months of 2004, the IISI said yesterday. This is 8,2% higher than for the same period of 2003 and, excluding China, worldwide production is 4,6% higher year-on-year. China again shows strong growth, with production of 22-million tons of crude steel in July, a rise of 20,3% on July 2003, the IISI reported. Year-to-date (YTD) production for China is 146,7-million tons, a rise of 21% on the first seven months of 2003. China accounted for 25,7% of world production in July. Production for the 25 countries in the European Union is up 9,8%, compared to July 2003. YTD production has increased by 5,2%. Turkish production stands at 11,8-million tons for the first seven months of 2004, a rise of 12,1% YTD. Turkey produced 1,8-million tons of crude steel in July. The institute said total production in North America stands at 10,8-millilon tons in July. This is 8,4% higher than the same month in 2003. YTD production for the region is up by 4,5%, to 76,3-million tons. The US produced eight-million tons in July, a rise of 7,4% on the same month last year. Production in Mexico is also up 8% YTD, and 17,1% compared to July 2003.
Source: Other (20.08.2004)

After the successful ending of the privatization of Bulgaria’s electricity distribution companies, the long-awaited liberalization of local energy market is expected to commence as well. At least this is what the State Energy Regulation Commission (SERC) promised. The liberalization of the energy market was supposed to happen in July this year, but it turned out in the last minute that it would be delayed again due to the unpreparedness of the sub-normative regulations. According to SERC’s chair Mr. Konstantin Shushulov, the commission is already almost ready with the procedures related to the market liberalization. Officially, the right of privileged consumers (companies with an annual consumption of over 40 gWh of electricity) to freely negotiate electricity supplies with power plants will most probably be given in this year’s last quarter. Along with the market liberalization new players will also be admitted, the so-called electricity traders. They will practically compete with electricity distribution companies, because they will also have the right to deliver electricity to consumers at free prices. This category of market players will be introduced through the new Law on Energy and Energy Resources. The idea is to separate trade of electricity from distribution in parallel with the market liberalization. According to Mr. Konstantin Shushulov, there are already 4-5 private companies which have demonstrated interest, though still not officially, in acquiring licenses to operate such trade activity. The so-called electricity traders will have the right to negotiate with consumers electricity supplies from power plants at prices, which are free, i.e. not regulated by SERC. In order to implement their activity, companies will have to obtain licenses from the regulation commission, which will be given to them in case they meet certain criteria, which, however, have not been determined as yet. Initially, traders will be granted the right to supply electricity only to the privileged consumers (currently around 10 big industrial enterprises). The idea is that traders should be able to supply electricity to these enterprises at lower prices, by negotiating on cheaper supplies with the owners of the power plants. When these mediators appear on the market, privileged consumer will be able to chose whether to use the services of the private trading companies, as long as they are offered better prices, or to negotiate their supplies themselves, by paying only the transmission fees. When household consumer electricity prices are also liberalized, which should happen before the year 2007, they will also be able to use the services of the so-called electricity traders. According to the energy market liberalization scenario, in the first stage of this liberalization the companies Agropolychim, Assarel Medet, Devnya Cement, Elatzite Med, KCM, Mines Maritza Iztok, Neochim, Sviloza, Stomana Industry, and Umicore Med, in their position of privileged consumers, should be given the right to directly negotiate prices and volumes of electricity with TPP Maritza Iztok 2, TPP Varna, TPP Bobov Dol, and TPP Rousse. All four power plants have certain quotas for free electricity negotiation at lower consumer prices. The privileged consumers themselves will pay for the transmission either to the National Electricity Transmission Company, or the electricity distribution companies, depending on the network they use. NETC is owner of the high-voltage network, while the electricity distribution companies own the low-voltage distribution lines. Following the complete opening of the market, electricity transmission should gradually be separated from trade, which means that at one point the electricity distribution companies will only deal with electricity distribution. According to Mr. Konstantin Shushulov, the new owners of the electricity distribution companies are familiar with this scheme and are informed about the possibility of future competition on the domestic market as early as next year. A similar market scheme is actually applied in most European countries. If the scheme should be successful, local traders will have to offer consumers electricity at prices, lower than those offered by the electricity distribution companies, as well as to buy cheaper from production plants. At first sight, the expectation, that consumers will be able to buy cheaper electricity, by using the services of mediators, and not by negotiating with suppliers directly, seems illogical. According to SERC’s head Mr. Konstantin Shushulov, however, lower priced supplies are absolutely possible because the prices of this type of supplies won’t include the constant expenditures, which are currently included by local energy companies and plants in their selling price. These expenditures include operational costs, maintenance costs, etc. “Mediator supply price will only include the variable expenditures of the energy companies (for materials), besides, the companies themselves will be able to negotiate with the plants on lower prices”, Mr. Shushulov explained. Electricity traders will only have to pay transmission fees to the NETC or to the electricity distribution companies. Currently, the amount of these fees is determined by the SERC for each company separately, and this is made following their proposal. NETC’s transmission fee is in the amount of BGN 11.80/mW, while the fees applied by the electricity distribution companies vary between BGN 6.68 and BGN 10.22/mW.
Source: Capital (21.08.2004)

The copper works of Asarel-Medet will invest $28 mln in the upgrade of a mine and ore-dressing plant in Southern Bulgaria by the beginning of next year, said executive director Luchezar Tsotsorkov. He specified that the facilities will continue to operate during the reconstruction. Late last year the company signed a contract with US consultancy Steffen Robertson and Kirsten on the mine's modernisation. For '03 the company reported an after-tax profit of over 1.5 mln levs, half of which was distributed among shareholders as dividend. In January-July the company manufactured 6.77 mln tons of copper ore, up by 5.74% from the like period a year ago.
Source: Dnevnik (23.08.2004)

The price per ton of coals extracted in Mini otkrit vagledobiv SPJSC - Pernik for individuals has been reduced by BGN 6, announced from the company. The new price is BGN 90 per ton, VAT included, and has taken force as of August 20. The price of the coals for companies and other consumers remains BGN 96. The reduction is connected with the company’s will to attract clients. Currently 100 tons per day are being sold as the market activates with the drawing on of the heating season.
Source: BTA (23.08.2004)

The world's three biggest producers of iron ore - the main commodity used to make steel - are planning to spend $5.3bn (?2.9bn) between them in the next four years to increase their output by more than half. The plans by Companhia Vale do Rio Doce of Brazil, the UK's Rio Tinto and Anglo-Australian BHP Billiton reflect expectations that demand for steel will continue at present strong levels for some time, driven largely by rapid expansion in China. Nelson Silva, commercial director of CVRD, the world's biggest iron ore producer, told the Financial Times: "We believe the steel market will remain in a strong position for at least another three or four years." News of the expansions, not all of which have been fully approved, underlines the mood of optimism in the steel industry. However, it may also spark fears about over-investment leading to a glut of steelmaking capacity. Disclosure of the schemes comes as it emerged at the weekend that BHP Billiton is at the early stage of considering a big iron ore and steel plant in the Indian state of Orissa, which could be built in conjunction with Posco of South Korea, the world's fifth-largest steelmaker. Under the plans of the three iron ore producers - which between them produce more than half of world iron ore exports - their combined output would rise from about 390m tonnes this year to as much as 600m tonnes in 2008. All the companies' iron ore comes from mines in Brazil and Australia, the world's two biggest exporters of the material. CVRD and its affiliate businesses in Brazil are considering an increase in annual production from 200m tonnes to 300m tonnes in 2008. This would come from several new mining projects costing $2.5bn. Rio Tinto and BHP Billiton would between them spend $2.8bn, in roughly equal amounts, on projects that would increase their respective annual iron ore production from 100m tonnes to 170m tonnes, and from 93m tonnes to 130m tonnes.
Source: Other (23.08.2004)

India’s government on Friday cut import duty on steel and scrap in the second round of fiscal measures to fight inflation, which shot up to a four-year high of nearly 8% for the week ended August 7. The duty cut on steel, which will result in a revenue loss of Rs 305 crore to the government in this fiscal, is aimed at putting pressure on domestic steel producers to hold the price line.
Source: Other (23.08.2004)

Tata Steel has cut prices of all its main products by Rs 2,000 per tonne. The price cut will contribute in easing the pressure of price increases on major users of the company's products, Tata group's chairman, Ratan Tata, said in a statement. The recent upward spiral of prices will dampen consumer demand for goods and negatively impact the growth rate of the economy, Tata said, appealing to other steel manufacturers to follow suit.
Source: Other (23.08.2004)

Alcoa Inc and BHP Billiton Ltd plan to raise up to $100 million in the fourth quarter of 2004 through an initial public offering of stock in their aluminium and stainless steel joint venture Integris Metals Corporation. Integris has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission. BHP Billiton spokeswoman Tania Price said the IPO date was yet to be set but was expected to take place in the fourth quarter of calendar 2004. The money raised would depend on the number of shares sold and price per share which were yet to be determined, Ms Price said. She said the operation was not a core business for either company and was always earmarked for sale. "It was always the intention of Alcoa and BHP Billiton to separate the business once both companies were comfortable with its integration," she said. "Obviously the companies agree the timing's right now to effect the separation and allow it (Integris) to be a standalone entity." Alcoa and BHP Billiton each own 50 per cent of Integris Metals a metals service center company engaged in the processing and distribution of metals, predominantly aluminum and stainless steel. The company was formed in November 2001 through the combination of Reynolds Aluminum Supply Company (RASCO) and NAMD, Inc., the metals distribution businesses of Alcoa and BHP Billiton, respectively. Deutsche Bank Securities Inc., and J.P. Morgan Securities Inc., will act as the joint book-running managers of the offering.
Source: Other (23.08.2004)

Aluminum Corp. of China Ltd., the world's second-largest producer of alumina, reported first-half profit more than doubled from the same period a year earlier as it raised prices of the semi-finished product alumina. Net income at Aluminum Corp., also known as Chalco, rose to 3.4 billion yuan (USD 411 million), or 0.31 yuan a share, from 1.58 billion yuan, or 0.15 yuan, the company said in a statement to the Hong Kong stock exchange.
Source: Other (23.08.2004)

Along with the 1.3 per cent drop in local unemployment in this year’s second quarter, National Statistical Institute reported that 150 000 more Bulgarians were appointed in our country’s private sector over the review period, versus 61 000 in the municipal and state-owned sector. In 2004 second quarter, the total number of employed was 2.97 mln. Unemployment rate has dropped with 1.3 per cent down to 12 per cent compared with April.
Source: Sega (24.08.2004)

China’s threat to world textile production is on the way of repeating in the foundry branch as well. Both branches are export-oriented, which outlines their strong dependence on world market competition. Bulgarian companies are already experiencing the Chinese invasion in the field of iron casting and machine building, which may lead to serious state revenue losses. Over the past few years, Chinese production has been the main competition for Bulgarian and European producers. It is cheap, and already of good quality. Last year, China’s steel exports reached 8.2 mln.t in terms of volume, which is 24 per cent premium to 2002. The mastering of the whole production cycle: raw materials – mouldings – machines, is the main reason for the “Chinese miracle” in this branch. The large production volumes are the reason for the low end-price of the products. China accounts for 20 per cent of world steel production. Last year, the Asian country’s production output hit 220 mln.t. As a result of this, buyers of Bulgarian machines and mouldings have been lately turning to cheaper substitutes from China. It is difficult for Bulgaria to cope with such a strong competition because of the poor coordination between raw material suppliers and foundries, said Mr. Ilia Keleshev, chair of the Machine Building Branch Chamber. To make it worse for the rest of the world producer, Chinese threat is coming in the most unfavourable moment. The country’s invasion found the branch in a period of recession, because of the slower regaining of investments made in heavy industry compared with some other branches. For Bulgaria, this problem is even more painful, because the penetrating cheap and of relatively high-quality Chinese production found the local branch poorly restructured and not able to resist such a strong competition. The situation in local foundries is not optimistic at all. Companies were built to have big capacities, while demand is not that high. Founding industry is closely related to machine building and all other branches, where production is impossible without mouldings. Last year, Bulgaria produced 70 000 t of mouldings, 50 per cent of which were exported. 90 per cent of the machines, assembled using parts from the founding industry, were exported. The number of foundries in Bulgaria is not higher than 60, most of them functioning as production units within machine building enterprises. Almost all of them have been privatized by MEBOs and privatization funds, which is the main reason for the lack of sufficient fresh investment, because most of the current owners do not dispose of sufficient financial resources. The renovation is a compulsory prerequisite for the sector’s competitiveness. Although the sector has been private for years, the modernization of the inherited capacities has been progressing quite slowly. Owners explain they do not dispose of sufficient resources to invest in new equipment. “Bulgarian banks are rather inclined to grant consumer credits, than to give credits to industrial enterprises, which are the moving force of economy”, Mr. Krasimir Dachev, owner of Group Metal Technology JSC, argued. Strategic investors are urgently needed in the branch, because, besides new production technologies, they also have developed markets for their production. For the time being, foreign investors are present in three places only – Germany’s Ziindustrie Geselschaft holds shares in Optikoelectron – Panagyurishte, Germany’s DFG holds shares in the former magnet carriers plant in Pazardjik, and a Dutch company holds 51 per cent of Chugunoleene JSC – Ihtiman. People from the branch think that the role of the state is not to help them – it should simply not stand in their way. Government does not have a clear vision about the state of the branch, about its options of becoming a priority sector. It does not have a clear vision of its policy towards the branch either. People are still talking about the blunder, made by a higher defense ministry official, who, when NATO representatives expressed interest in the production of one of the local plants, said it had been closed down. “And the enterprise is not only operating, but also big investments have been made in it”, a source from the branch, who wanted to stay anonymous, commented. Clumsy administration is also hampering the work of local producers. Each machine, necessary for the renovation of production, should be imported, following decision by Ministry of Economy about its possible double use. The procedure takes months which sometimes makes the investment pointless. Exports is also suffering losses from the heavy bureaucracy. Consequences here are far more serious, because in the free competition environment, western buyers refuse to sign contracts with producers, which are delaying their supplies. In order to solve the problem with the founding business, producer are uniting in branch chambers and are lobbying for their common interest before state institutions. Bulgaria’s forthcoming EU accession has placed many requirements to local companies, operating in this branch. This type of production often results in large-scale environment pollution. Therefore big investments in ecological technologies should be made. It is widely known that investments in ecology are more difficult to regain, therefore local companies prefer to save costs exactly at the expense of environment pollution. The branch is experiencing lack of qualified staff, which is largely due to the bad labour conditions it offers. Their improvement is also one of the basic requirements, set by EU, but for the time being it does not seem to be among the priorities of the owners. The sector is a big consumer of scrap, which makes it strongly dependent on world market raw material prices. Bulgaria’s founding industry uses some 35 000 t of cast iron scrap and some 1.2 mln t of black scrap annually. While local enterprises continue to experience raw material deficiency, scrap exports continues to grow. Last year, 560 000 t of steel scrap were exported, and in the first four months of this year the exported amount reached 550 000 t – mainly destined to Greece, Turkey, and Macedonia. “Even when foreign consumers offer lower scrap prices, suppliers prefer them as clients, because they buy bigger amounts compared with Bulgarian enterprises”, Mr. Iliya Keleshev commented. Cast iron scrap deficiency makes moulding production difficult. Metal traders are not interest in separating cast iron scrap from steel scrap, which is used in foundries. Companies themselves are not able to separate the necessary from the unnecessary scrap, and foreign buyers are inclined to buy wholesale the non-separated material. Scrap deficiency forces Bulgarian companies to import it from Ukraine at a price of around USD 300/t. In February 2004, cast iron scrap prices reached BGN 400/t on the Bulgarian market, which resulted in a 6-per cent hike in metal processing machines prices, and some 2.5-5 per cent hike in the prices of the other types of machines. For some enterprises, this led production output cuts and even closing of some foundries. In case strategic investors do not appear in the branch and production quality is not improved, a part of the foundries will be shut down by the year 2007. “Before investing in Bulgarian machine building, foreign investors should find out whether there are subcontractors (founding enterprises) available”, Mr. Lyudmil Mihaylov, deputy chair of the Bulgarian Investment Agency said. Analysts forecast founding production would grow over the next few years because of the emerging foreign investor interest and the higher local production output. Big companies such as Bosch, DymlerChrysler, and General Electric, are making orders in Bulgarian founding enterprises. Foreign investors are interested in developing a growing part of their core production in countries such as Bulgaria, because of the cheaper workforce, leading to lower prime cost of the end products. Only the inflow of foreign investments could be a guarantee that Bulgarian founding and machine building industries would survive in a situation of growing competition. Amount of cast iron mouldings by some of the main producers (in tons) Company 2002, 2003, 2004 (forecast). Export for 2004 (in percentage of production). 1. Chugunoleene JSC, Ihtiman 12 270 11 040 20 000 80% 2. Progress JSC, St. Zagora 8000 8000 8000 40% 3. Metacom SLZ JSC, Pleven 1665 1645 1900 32% 4. Osam JSC, Lovech 894 811 3200 85% 5. Leyarmash Ltd., Sofia 1213 2014 2400 5% 6. Mashstroy JSC, Troyan 1659 1739 1400 – Source: Branch Chamber of Machine Building Specialists opinion: Mr. Slavin Yanakiev, CEO of Progress JSC (96 per cent owned by Holding Zagora) The main problem the branch is facing is the unstable scrap market. We solve this problem through direct imports from Ukraine and buy-up of Bulgarian production at higher prices. Our production is of good quality. We export chiefly to EU – Greece, Italy, France. We cope with China’s competition by being more flexible with supplies and responding faster to demand. Chinese goods arrive in Europe with a couple-of-weeks’ delay. In order to meet EU requirements, we bought a new line, which increased our capacity and improved labour conditions by installing stronger filters. Bosch has demonstrated interest in our production. One of the latest major orders we implemented was for the stakes at the stadiums for the Athens Olympic games. Mr. Krasimir Dachev, president of holding Group Metal Technology (holds 80 per cent of Osam 92 per cent of Centromet, 95 per cent of Alucom, and 82 per cent of Metacom) Scrap prices have jumped from USD 126/t in September last year to USD 400/t in March this year. We do not uy scrap from Bulgarian producers because there is no guarantee for its quality, while Ukrainian scrap is arriving with the respective certificate. In Bulgaria, there is no machine building market, which is the reason why all of our production is exported. We hold the necessary certificates for NATO and EU. Some of our clients are General Electric, and DymlerChrysler. The quality of our production is higher than the Chinese one. Buyers from Thailand would prefer our production, even if the price we offer is up to three times higher than the Chinese. But China is more competitive even in the transport to Europe, because of the water channels. Transport one 1 of production from China to Europe costs EUR 12, while the cheapest supply from Bulgaria by truck costs EUR 50/t. Mr. Slaveyko Yonchev, CEO of Osam JSC Steel scrap prices are quite unstable, which stands as a major problem for local companies, operating in the branch. Within a year, they vary from BGN 160, reaching BGN 360, down to BGN 180 again. This instability results to loss of permanent clients and markets. Shrunk production of machines and cars also impacts local producers. Bulgarian foundries meet high production standards, which is their advantage among the tough competition on the foreign market. Some of the difficulties local companies operating in the branch are facing are secondary raw material supplies; restrictions, related to products with double use; electricity prices, which is highest in the peak production hours of the day. Chinese production is the main competition of Bulgarian producers on the foreign market. One of the factors for its low prime cost is the fact, that the Chinese state covers the local enterprises electricity expenses. Problems in the branch may be solved by restricting scrap exports; giving Bulgarian companies priority in the purchase of scrap, as well as importing new production developments.
Source: Dnevnik (24.08.2004)

The ecological standards that Bulgaria has engaged with before EU, are placing at stake 40 per cent of our country’s exports, the chairman of the Bulgarian Industrial Association (BIA) Mr. Bojidar Danev said yesterday. Bulgarian businessmen only know that bringing their business in compliance with EU requirements would cost them billions of BGN. They know absolutely nothing about the terms, conditions and sanctions they would be imposed in case any discrepancies are found.
Source: Sega (25.08.2004)

London-based multinational company LNM is planning to invest some USD 135 mln over the next ten years in Bosnia and Herzegovina’s biggest steel plant. The company has already signed an agreement with the local authorities to purchase the majority stake in the enterprise. The agreement with LNM, one of the world’s biggest steel producers (annual production output of some 45 mln tons), is the biggest privatization deal ever in Bosnia and Herzegovina.
Source: Pari (25.08.2004)

221 companies and establishments owe BGN 132 mln worth of unpaid salaries and BGN 320 mln worth of unpaid social insurance (a total of BGN 452 mln) to 180 000 workers and employees. According to data, provided by the KNSB labour union, among the biggest debtors are the Bulgarian State Railways (BDZ), still owing BGN 15 mln in the form of salaries and insurance to 30 000 workers; some of Terem’s companies (BGN 3.5 mln), as well as Stomana JSC – Pernik (BGN 23 mln social insurance). According to KNSB data, the oldest debtor is Vidachim (Vidin), which has accumulated debts in the amount of BGN 7.5 mln since 1997. Syndicates threatened to organize a massive national strike if employers continue to delay payments. From September 3 until September 25, KNSB and Podkrepa labour unions are going to conduct a survey about the protests among their 400 000 members. Because of the systematic delay of salaries and insurance payments, KNSB demands employers should suffer some punitive measures. This statement was made yesterday by the Chairman of the syndicate Mr. Valentin Nikiforov. “If workers want to get their money, they are supposed to sue their employer, and point out the bank account from which their salaries should be paid in the claim. They do not know the bank account numbers”, Mr. Nikiforov explained. He explained previously systematic non-payment of salaries had been punished with 1- 3 years of imprisonment, but this measure had been removed from the Punitive Code. According to the currently active Labour Code, each worker should receive at least 60 per cent of its gross salary, but no less than the minimum salary of BGN 120. The rest of the money is due payable with an interest equal to the basic interest rate (2.40 per cent) plus 10 per cent, e.g. 12.4 per cent. As of January 1 2005, the Law on the guaranteeing of the receivables of workers and employees in case their employer goes bankrupt is due to be enforced. However, workers, whose employers have gone bankrupt before the enforcement of the law, will not be able to take advantage of the new law.
Source: Monitor (26.08.2004)

Two representatives of Indian steel company Ispat have taken seats on the managing board of Sofia-based metallurgical plant Kremikovtzi. Finmetals Holding, which owns a 71 per cent stake in Kremikovtzi, said in May it was courting Ispat to agree to a joint management partnership. The Kremikovtzi management refused to comment on the board reshuffle on Thursday. The foreign investor is teaming up with the debt-throttled Kremikovtzi to take advantage of the Bulgaria's steel export quotas granted by the EU and the U.S. which have not been fulfilled. For years Finmetals Holding has been shopping around for a foreign partner with deep enough pockets to refurbish the metallurgical plant and align production to EU standards. The sizeable red ink of the metals firm and the injunction on the Kremikovtzi stock imposed over the non-payment of eco fees have so far frustrated the search for a business mate. Kremikovtzi and Ispat started doing business in early 2004 when the Bulgarian company agreed to manufacture semi-finished products for Ispat subsidiaries in exchange for coke supplies.
Source: Dnevnik (27.08.2004)

Kremikovtzi JSC registered a profit of BGN 49.365 million in the first six months of 2004 according to the metallurgical factory's income and expense report. The company registered a loss of BGN 31.027 million during the same period of 2003.
Source: Pari (27.08.2004)

A joint venture of the world's three steel giants, BaoSteel, Nippon Steel Corporation and Arcelor,was officially established here Friday to produce high-grade steelsheets for automobiles. Located inside BaoSteel in Shanghai, the new company involves atotal investment of 6.5 billion yuan (783 million US dollars) and 3 billion yuan (361 million US dollars) of registered capital. BaoSteel contributed 50 percent of the capital, Nippon Steel 38 percent and Arcelor 12 percent. The company has a designed production capacity of 1.7 million tons of high-grade steel sheet for automobiles, including 900,000 tons of cold-rolled sheets and 800,000 tons of galvanized sheets. An official with the company said it intends to become the dominant auto steel sheet producer on the Chinese market. Its products would meet the requirements of all major joint venture automobile producers in China. Full scale production will begin in June 2005, according to the company. (source: China People's Daily)
Source: Other (28.08.2004)

Belgium’s Umicore Med – a leading producer of zinc, copper, and hi-tech metal products, as well as owner of the Pirdop-based copper plant, announced its first-half metal cathode production output has risen 8 per cent, reaching 100.6 thousand tons. In 2004, Umicore expects the metal refinery’s production to be bigger than last year. The amount of zinc cathodes produced by the Belgium group, which is the industry’s number one zinc producers, reached the record 270.2 thousand tons. The company continues to expect consolidation in Europe’s copper industry. Umicore, which is gradually withdrawing from its tradition extraction business and is reorienting to production of hi-tech metal materials and precious metals recycling, raised its forecasts for this year’s second-half profit to EUR 280-290 mln, posting better-than-expected first-half profit (EUR 162.5 mln – 30 per cent up before taxation). Exactly the precious metal recycling and hi-tech materials units of the company accounted for most of the profit - respectively EUR 67.6 mln and EUR 43.3 mln).
Source: Pari (30.08.2004)

(ÓÀÅ) Ministry of Finance and Industry has come to the rescue of domestic iron and steel manufacturers by imposing a levy of Dh250 per tonne on the export of iron/steel scrap. The decision number 262 of 2004 which will come into effect from Wednesday, aimed at discouraging the export of iron scrap so that it is available for the iron and steel industry to manufacture different products which are in huge demands these days due to the mega construction projects being announced almost daily in the country. The decision to impose the levy as a deterrent has been taken following the suggestions put forward by the local iron and steel industry, which was facing serious shortage of the raw material for a long time. It has also been one of the factor in the recent escalation of prices of steel products. (source: www.zawya.com)
Source: Other (30.08.2004)

Local foreing direct investment in the first half of this year were in the amount of EUR 978.6 mln, BNB reported, versus EUR 651.4 mln in the same period of 2003. 55 per cent of the investments (EUR 538.3 mln) were implemented through increase of the capital of Bulgarian companies by their international owners. The largest revenues were generated through the privatization of the Bulgarian Telecommunication Company (BTC), as well as through the increase of the capital of the company, associated for the Mobiltel JSC deal. EUR 242.9 mln came from privatization deals.
Source: Standart (31.08.2004)

Nippon Steel, Japan's largest steel maker, expects its year to March 2005 current profit to surge 45% to JPY 250-billion, which would be its first record current profit in 15 years, the Nihon Keizai Shimbun reported, without citing sources. The previous projection was for a JPY 200-billion current profit, the newspaper reported. Overall sales are seen rising 9% to JPY 3.2-trillion on brisk sales of high-quality steel to automakers, shipbuilders and electrical machinery manufacturers. (source: Business Day)
Source: Other (31.08.2004)

BOOMING markets for iron ore pushed Portman Mining to a record profit of $17.8 million for the June half. Higher prices, surging demand and a favourable foreign exchange hedging book all combined to push Portman's profit 75 per cent higher than the first half last year, and above July's profit upgrade. Shareholders will share in the spoils with a fully franked dividend of 4.5, up from 4 and payable to those on the books on September 20. The profit was struck on a 34 per cent increase in revenue to $97.9 million. (source: Herald Sun)
Source: Other (31.08.2004)

Sales of Alcomet JSC – Shoumen rose by 40 percent during the first six months of 2004 y/y, but still the group is at a loss to the amount of BGN 888 000. The loss is due mainly to the increased costs for materials, which have jumped over 44 percent. The company liabilities rose up to BGN 83.018 mln for the half-year, but in spite of that the financial independence ratio went down from 0.52 at the end of last year to 0.48 as of June 30, 2004.
Source: Pari (01.09.2004)

News outfit SeeNews quoted Bulgarian open pit copper mine Asarel-Medet as saying on Monday it expected its revenue to surge by 70 percent this year on the back of rising global copper prices and increasing output. Asarel-Medet, located in the Panagyurishte area some 90 km Southeast of the capital Sofia, posted BGN 147.4 mln in total revenue last year. The company earned BGN 134.5 mln in sales and BGN 10.5 mln in foreign currency gains in 2003, SeeNews said.
Source: Dnevnik (01.09.2004)

The Indian Global Infrastructure Holdings Ltd. (GIHL), controlled by the Mittal family, is set to acquire a majority stake in Sofia-based metallurgical plant Kremikovtzi JSC, Indian newspaper Business Standard reports. GIHL is in talks to buy the stake from Finmetals Holding, which owns 71% of Kremikovtzi. Sources close to the development told Business Standard the discussions have reached the final stage but have not yet been concluded. GIHL is a special purpose vehicle floated by the Mittals to manage their international operations. It holds about a 6% stake in Ispat Industries. The estimated investment to acquire the majority stake was expected to be over USD 300 mln, sources said. The deal will be structured in such way that a certain percentage of the investment would be made initially and the balance payment will be made over a period of time. Kremikovtzi has an annual steel making capacity of 2.3 mln tons, with a hot-rolled coil plant of 2.1 mln tons per annum. The company also has cold rolling facilities of 1.3 mln tons per annum and a 1.2 mln tons per annum coke oven plant, along with galvanizing and tinplate facilities and colour coated sheet mills. Kremikovtzi owns iron ore, dolomite and lime mines in the region. Around 80% of the company's products are exported, with 65% of exports going to the EU. GIHL will also be investing considerably to enhance the production capacity of Kremikovtzi, Business Standard reports. Kremikovtzi has been in intense talks with four potential investors since March, said supervisory board chairman Bozhko Bonev. Only the negotiations with Ispat have so far reached a fairly advanced stage but until pen is put to paper, the management has refused to give more details about the deal in the making. The Sofia city court seated two Ispat representatives on the Kremikovtzi managing board in August, a move that suggest the Indian steel maker is the most likely future owner of the Bulgarian company.
Source: BTA (02.09.2004)

Bulgaria's revenue from tourism (without transportation) has reached EUR 646.3 million for the first half of the year, a 25.1% year-on-year rise, according to preliminary data of the Bulgarian National Bank (BNB). The improvement is associated with the prolonged winter season as well as with the early start of the summer tourist period, which commenced yet in April this year. Other reasons are the good proportion of the services to prices, as well as the development of ecological, cultural and historical tourism. The tourist revenue this year is the highest since 1989 on. The number of tourist to visit the country is expected to exceed four million by the end of the year. May and June turned out to be the strongest months in terms of tourist revenue. In May a total of EUR 150.2 million was collected, up by 30.3% compared top May 2003. June 2004 attracted EUR 233.5 million, which is by 17% higher than in the strong June last year.
Source: Pari (03.09.2004)

Foreign direct investments in Bulgaria for the period January – June 2004 are EUR 978.6 million, or 5 percent of the GDP, according to the preliminary data of the Bulgarian National Bank’s statistics. They are EUR 327 million more than the same period last year when they were to the amount of EUR 651.4 million, or 3.7 percent of the GDP. The Central Bank data show that direct investments cover 103.4 percent of the current account deficit for the period January – June 2004, versus 70.7 percent for the same period last year. For the first half of 2004 foreign currency deposits of commercial banks abroad have increased by EUR 235.9 mln as compared to December 31, 2003.
Source: Banker (07.09.2004)

Copper settled above the 5-week low from the end of last week USD 2687/t. The three-month futures traded at USD 2713/t versus USD 2702/t at the close in Friday. Aluminum, having slumped to the low since mid-June, steadied at USD 1659-1662, USD 5/t higher than Friday. Nickel remained under pressure and recorded a new low for the last 12 weeks at USD 12 050/t.
Source: Pari (07.09.2004)

The Chinese steel industry, lacking for investments and credits since April, is gaining speed again, to meet the enormous demand by all sectors of the world’s seventh biggest economy. According to the latest data, iron ore import in the country has overcome the drop from the second quarter. Steel is necessary for the intensive building in China and the giants from Baosteel to Wuhan Steel Processing need 2 mln tons of imported ore for the production of 1 mln tons of steel. Baoshan Iron and Steel Co, the world’s fifth biggest steel-maker, consumes some 40 mln tons of ore a year, half of which comes from imports. It has signed long-term delivery agreements with the top iron-ore-producer – Brazil’s CVRD, and with the biggest mining company BHP Billiton for 16 mln tons a year. Besides, some days ago BHP Billiton announced its intention to cover 1/3 (270 mln tons) of the coal needed for the world steel production by the end of 2010. In August Baosteel established a joint venture with Nippon Steel and Arcelor that will have an annual output of 1.7 mln tons. According to Chinese sources, 260 mln tons of steel will be produced in the country this year, 17 percent more than in 2003, of a world total of 1 billion tons.
Source: Pari (07.09.2004)

Venezuela will use its enormous bauxite deposits to increase aluminum production over 1 mln tons a year by 2010 and 2 mln tons after that. The country is now producing 630 000 tons. The increase will come in spite of the US company Fluîr Daniel withdrawal from a large-scale project.
Source: Pari (07.09.2004)

The EU imposed fines, totaling EUR 222.3 mln, on copper pipes makers for fixing prices of the copper pipes used in the water supply and sewage sector during 1989-2001 on a market estimated at EUR 1.15 billion a year. Sweden’s Boliden and Outokumpu are among the fined companies. Last year the EU fined 3 companies (again Outokumpu) with EUR 79 mln for cartel policy in connection with the copper pipes used in conditioners and refrigerators.
Source: Pari (07.09.2004)

Antofagasta, the family-owned Chilean copper miner, on Tuesday said the strength of copper prices helped it more than double pre-tax profits in the first six months of the year and raise its production forecasts for the current year. The mining and utility group said it would continue to benefit from solid demand for copper from China and other Asian countries and from improving conditions in the US. An upgrade of the group’s main production plant at Los Pelambres, which was completed in August 2003, helped the company capitalize on record copper prices. Daily average production at the mine, which accounts for two thirds of group turnover, increased to 121,400 tonnes in the first six months of the year, compared to 111,300 the previous year. The company said it now expects to produce 490,000 tonnes for the full year, up from the previous forecast of 480,000 tonnes. Cash costs per pound were expected to remain in the 30 cent range, the company said. For the six months to June 30, London Metal Exchange copper prices averaged 125.2 cents per pound compared to 74.9 cents per pound for the same period last year. For the same period, Antofagasta increased production by 4.6 per cent to 235,400 tonnes. The company also said group weighted average cash costs during the period fell 17 per cent to 31.2 cents per pound. Pre-tax profits at the group, which also has interests in the Chilean road, rail and water sectors, rose to USD 438.9m from USD 138.1m for the first half of 2003 on turnover up 73.7 per cent at USD 819.8m. Earnings per share increased by 231 per cent to $1.127, and the company said it would pay a half-year dividend of 15 cents against 11 cents the year before.
Source: Other (07.09.2004)

Sofia City Court registered changes for Kremikovtzi – Rudodobiv JSC: erases as member of the Board of Directors and CEO Mr. Yavor Alexandrov Eftimov; registers as member of the Board of Directors and CEO Mr. Lozan Parvanov Lozanov; erases Mr. Bojidar Vasilev Dafinski as representative of Rododobiv I Obogatyavane 98 JSC in the Board of Directors; registers Mr. Yavor Alexandrov Eftimov as representative of Rudodobiv I Obogatyavane 98 in the Board of Directors; the company shall be represented by the CEO Mr. Lozan Parvanov Lozanov.
Source: State Gazette (07.09.2004)

A half of the needed USD 9.0 billion investments in ecology for covering the EU standards will be secured by local companies, while the other half will be provided by the Bulgarian Government, ecology minister, Dolores Arsenova, said. According to her, Bulgarian businesses are well informed on the requirements and the terms set by the European Union's norms. Bulgaria will spend additional BGN 150 million on separate collection of waste packaging to gain several times more from saved resources. Bulgaria has contracted with EU to collect 20% of the waste packaging, but the Union increased the requirements at the beginning of the year and certain re-negotiation of the issue is expected. EU companies are required to collect more than 50% of the waste packaging of the certain types of materials, and experts commented that the norms will be revised even for the candidate-state.
Source: Pari (08.09.2004)

Shortage of refined copper on the world market rose by nearly 90 percent in the first half-year versus the same period of 2003 and reached 682 000 tons, the latest International Copper Study Group (ICSG) report shows. The red metal jumped on average by some 5.2 percent a month due to the strong demand in China, USA and Japan. Output rose by 8,7 percent in the second quarter versus the first quarter, but refineries are working at 80 percent of their capacity. For the half-year initially processed metal went up 1 percent versus the secondarily refined copper (from scraps), which jumped by 10.8 percent. The total amount of the produced metal is 7.623 mln tons.
Source: Pari (09.09.2004)

Government imposed distraint on the steelmaker Kremikovtsi's shares, all bank accounts in local and foreign currency, movable and immovable property due to debts of BGN 146.142 million. This way the ministers are to ruin the negotiations with the Indian Ispat group over the prospective sale of the majority stake in Kremikovtsi. The company’s chief executive officer, Valentin Zahariev, was in Italy yesterday and was not available for comments. According to some sources, the main part of the debt is to the State Fund for Reconstruction and Development and an agreement for its payment has been signed. According to it, there is also a grace period which expires in 2005. The Indian company Global Infrastructure Holding is a part of ISPAT group and was willing to invest above EUR 300 million in the Bulgarian giant. As a matter of fact this was perhaps the last chance for saving the metallurgy company. Kremikovtsi reported a net profit of BGN 120 million for 2003, compared to a loss of BGN 10.680 million for 2002, chief executive officer, Valentin Zahariev, said. The company's operating profit came to BGN 39 million. Kremikovtsi generated sales revenue of BGN 680.352 million from sales of metals for 2003. Taxes paid to the budget amounted to BGN 9.5 million. The company had 7,930 employees on average in 2003. The average monthly salary with the company came to BGN 604. Between 85% and 90% of the production is exported, mainly to the EU market, but there were also exports to China and the USA. The company's assets totalled BGN 850 million, while the liabilities than amounted to BGN 400 million.
Source: BTA (10.09.2004)

Bulgaria’s government decided to allocate BGN 3.0 million for setting up of Energy Efficiency Fund. The move is in line with the requirements of the Energy Efficiency Act, according to which the state should finance the setting up of such a separate legal entity with an initial contribution of BGN 3.0 million. The fund will manage financial assets to enhance energy-saving production projects. According to Energy Efficiency Act the fund has a board of directors of seven members.
Source: Pari (10.09.2004)

China's Ministry of Commerce announced in Beijing Friday that it decided to stop collecting anti-dumping tax as of Friday on cold-rolled steel coil originated from Russia, the Republic of Korea (ROK), Ukraine, Kazakhstan and Taiwan. The ministry noted in a statement that it also stopped the import authentication on cold-rolled steel coil used for making tinplate Friday. It was the first time China made such a decision because substantial changes occurred in the domestic and international markets, acknowledged the ministry. China began to collect anti-dumping tax on the products on January 14 this year. But it decided to re-examine the case in May after domestic and world markets changed. The ministry said it made the final decision according to China 's regulations on anti-dumping cases. Cold-rolled steel coil can be used in the making of automobiles, building materials, elevators, bicycles and household appliances.
Source: Other (11.09.2004)

Steelmet JSC, one of Bulgaria's biggest manufacturers of aluminum sections and architectural systems, intends to double its output by end-2005 to the tune of some EUR 15 mln, sales director Hristo Shterev said. The current annual capacity of the company is 10,000 tons, which roughly matches the yearly domestic demand for aluminum products. Steelmet will commission two production lines for aluminum extrusions and will diversify its product range with the addition of hard-alloy tubes and rods. The company recently bought a 7.0 ha land plot in Sofia for the purposes of the modernization. The 2004 investment program of the company also includes the deployment of distribution centers in Vratsa, Pleven and Haskovo to add to the depots already operating in Bourgas, Stara Zagora, Rousse, Sofia, Blagoevgrad, Plovdiv and Varna. Steelmet imports some 1,000 tons of aluminum input materials monthly from Russia, Greece and Romania. Steelmet exports some 70 percent of its production mainly to Western Europe and the region. This year nearly 50 new hotels, most of which in the Sunny Beach and Golden Sands resorts, have been built. Materials, manufactured by Steelmet, were put in 40 of them. The owner of the aluminum plant, a subsidiary of Greek consortium Viohalco, has so far invested EUR 16 mln in Steelmet. For the time being Steelmet is not considering closing the production cycle with the raw material supply for scraps are insufficient and there is no furnace suitable for their melting. Production refuse is melted in Greece. In the words of Mr. Shterev, one of the gravest problems before the aluminum sections and the PVC window and door systems makers and importers was the illegal import. Unofficial data show that some 250-300 t a month enter the country illegally. Producers and importers will join hands in association this month to take systematic steps against the illegal import.
Source: Dnevnik (13.09.2004)

Net sales of goods and services clocked up an y/y gain of 12.6% in the first seven months of 2004, the National Statistical Institute said. January-July retail sales rose 16% y/y, underpinned by strong demand for household goods and appliances where sales jumped 19.2%. Wholesale trade was up 12.1%. July industrial sales surged ahead of the year-ago period by 24.8%, propelled by a 29% rise in processing industry sales. Mining industry sales fell in July by 2.8% y/y. July industrial output was up 15.6% y/y.
Source: Dnevnik (13.09.2004)

Steelmet JSC was the first investment in Bulgaria of the Greek Viohalco holding group, which incorporates several big companies, specialized in metallurgy and metal processing – Elval, Etem, Halcor, Hellenic Cables and Sidenor. The works of Steelmet, majority owned by Etem JSC, was built in 1999. It manufactures standard aluminum sections and architectural systems. EUR 16 mln have been invested in Steelmet so far. The total investments are expected to reach EUR 22-25 mln. In 2003-2004 the company has furnished window and door systems and fronts to more than 60 newly built hotels and administrative buildings on the Bulgarian Black Sea coast only. The biggest sites are the hotels Green Park, Elena, Crown Plaza 1 and 2, Astera in the Golden Sands resort, Asalia, in the St.s Constantine and Elena resort, Victoria Palace, Marvel, Fiesta Beach, Vella, Coliseum in the Sunny Beach resort, hotel Marina Royal Palace in the Duni holiday resort, an office building of TUI Bulgaria in Varna, etc. “How much is the annual output of Steelmet JSC?” “The annual output of Steelmet before the implementation of the investment programme outlined for the expansion of the production capacities, which is to start at the end-2004 and we hope to be completed in the fall of 2005, when 2 new presses will start, is 10 000 tons. After the successful fulfillment of the investment programme the output is expected to double.” “How is the company doing on the Bulgarian market?” “Steelmet’s market share in Bulgaria by sales of aluminum architectural systems is about 45 percent. It is hard to spell an accurate figure, as precise data about the quantities of aluminum profiles sold and really imported in Bulgaria are lacking because of the undeclared import. However, according to our studies our market share is about 45 percent.” “What percentage of the total output is sold on the foreign market and what – on the Bulgarian one?” “Currently the export to domestic market ratio is 70:30, and the export is destined mainly to Germany, France and Holland, to the big industrial companies in Western Europe like Thyssen Krupp. The architectural systems for Greece, Serbia and Montenegro, Romania and Ukraine also constitute a large portion of the exports. Despite the higher percentage of the export in terms of quantity, our company lays stress on the growing market share in Bulgaria and the Balkan countries.” “What is your opinion about the state of the aluminum architectural systems market in Bulgaria?” “We reckon that the market of aluminum architectural systems in Bulgaria is very dynamic and has been developing rapidly over the past three years. We judge by the soaring rise in the sales of Steelmet on the Bulgarian market. We scored an 80-percent growth on the domestic market during the first half of 2004, year on year. This is evidence of the successful efforts of Steelmet’s team for implementation of the new investments in the improvement of quality and the successful distribution policy of the company. However, this growth shows also that the market is fast developing and will be followed be an increase in the new construction in Bulgaria.” “Do you intend to expand the product range of the company?” “The expansion of the product range is a continuous process determined chiefly by our designers’ team. It was formed in 2003 and already comprises three designers. The RND division in Greece, where the mother company Etem is, also works on the innovation and development of the existing systems, as well as on the development of new systems. We plan to renovate two of the existing systems on the Bulgarian market at the end of the year. Next year we will show two completely new, unique, and universally applicable systems. “Currently Steelmet is investing in the construction of an office building. At what stage is the construction and when will the project be completed? What is the amount of the investment?” “This is the only Steelmet’s not own building investment which means that Steelmet is not going to move its offices there, but this is an investment project that is to serve all the companies of the Viohalco group in Bulgaria. A permanent exhibition hall will be constructed there, in which the products manufactured by the group companies will be exposed. The offices that are not used for the companies’ needs in Bulgaria are to be rented. The investment is in the amount of BGN 7 million. The project shall be completed on December 1, 2004, when we expect to be its official opening. The steel-concrete construction is already completed, about 80 percent of the rough building.” “What are the company’s investment plans? Do you expect other investments in real estate?” “The company’s plans are very ambitious. We plan the introduction of 2 new extrusion lines, which is connected with the expansion of the built-up plant’s area that is going to double. It is 15 000 square meters so far. On the Trakia highway, near Plovdiv, a plot has been bought as well where the second new modern warehouse base, following our modern warehouse base, shall be constructed with an entrance of the highway side. There entirely products of the Viohlaco group’s companies are to be offered mainly architectural systems. However this is a continuous process and we won’t stop innovating both the existing capacities and investing in new manufacture capacities and warehouse bases. Currently the Steelmet’s warehouse bases cover areas of about 10 000 square meters throughout the country and during the next year (not including the warehouse base in Plovdiv) they are to enlarge to 15 000. Just here, in Sofia, a quite new warehouse complex will be constructed that is to spread on 6 000 square meters and will be equipped with new modern machinery. “Do you intend to invest in new technology?” “Investments in new equipment and premises amount to EUR 12 million, and at the same time manufacture capacities are continuously supported and renewed that guarantees high production quality, flawless work and less manufacture suspension. So this process will continue in the future.” “How would you comment Bulgarian investment climate?” “Definitely the investment climate in Bulgaria has improved since the foundation of Steelmet as a commercial partnership 10 years ago. Here is the place to say that on November 15 this year Steelmet is to celebrate its 10-year’s anniversary. As for that period Steelmet has gone through a lot. We survived the banks’ crises in 1996-1997. But the investment climate has improved so far. That is not just our statement, it is prominent of the upgraded by international financial institutions country’s credit rating. So what we see – in the past 2 years the foreign investments in Bulgaria reported also a drastic increase. We also consider that there is still more to be desired and a long way to be taken so that international business is more stimulated, but Bulgarian manufacturers should be first. Investments’ increase and creation of new jobs in Bulgaria are necessary; that is our aim too and we are proud to be on that market and create Bulgarian supplemental product.
Source: Construction City (13.09.2004)

China repealed the antidumping duties on the import of cold-rolled steel from Russia, Ukraine, Kazakhstan, South Korea and Taiwan, imposed at the beginning of this year, as the domestic market stands in danger of a deficit.
Source: Pari (13.09.2004)

The total price rise of the steel of the world’s top maker Arcelor in 2004 is expected to be 20 percent, reported La Libre journal.
Source: Pari (13.09.2004)

World’s biggest nickel and palladium producer, the Russian Norilski nickel, said net profit for first quarter increased to USD 460 mln (according to the International Accounting Standards) versus USD 109 mln for the same period y/y. Sales of metals jumped to USD 1.6 billion from USD 1.13 billion in 2003. These excellent results came after the rise of metals prices and the acquisition of the only US platinum and palladium maker Stillwater.
Source: Pari (13.09.2004)

Non-ferrous metals rose on Friday, copper heading the upward movement. Three-month copper futures traded at USD31/t higher than on Thursday or at USD2784-2788/t. Aluminum gained USD28/t and lead – USD8/t, to set at USD1700-1705/t and USD885-890/t respectively. Zinc went up by USD6/t, and nickel – by USD100/t, reaching USD980-984/t and USD12100-12200/t respectively.
Source: Pari (13.09.2004)

In order to become the largest stainless steel maker in the world, Finland’s Outokumpu should increase output and attract the investments in the sector, the management of the world’s number 3 company by output of stainless steel pointed out. Outokumpu, which lags only behind Arcelor and ThyssenKrupp by this indicator, revealed last week its ambitions to sell its copper-making units and focus exclusively on its steel business. It now holds 8-10 percent of the world market and hopes to take advantage of the soaring demand through the expansion of the Tornio plant in Northern Finland with a potential output of 2.75 mln tons of steel slabs a year, which will be opened next year.
Source: Pari (13.09.2004)

The aluminum sections and architectural systems plant ETEM Steelmet JSC offers credits on easy terms, the company said. According to the scheme, the investor contracts with a specific window and door systems and suspended fronts maker on the price and the time of the make on a particular project with ETEM architectural systems. A contract between the investor, the executor and Steelmet shall be signed, as the investor shall make an advance payment to the plant, and the rest may be deferred up to 18 months at an interest rate of 0.85 percent. A three-month grace period, during which only the interest is due, is available too.
Source: 24 chasa (13.09.2004)

Over 100 000 sq. m of aluminum window and door systems, manufactured by Steelmet JSC, were put in the construction of hotels on the Bulgarian Black Sea coast during March-June, said yesterday the sales manager of the company, Hristo Shterev. The Pernik-based plant Steelmet is part of the Greek consortium Viohalco.
Source: Trud (13.09.2004)

Sahaviriya Steel Industries Pcl, Thailand's largest maker of hot-rolled coil steel, and its group companies said they plan to invest 80 billion baht (USD 1.9 billion) in the next two years to build a steel slabs plant. The plant will produce 5 million metric tons of steel slabs and billets a year, the Sahaviriya Group said in a statement. The factory will be built in the first phase of Sahaviriya's plan to invest as much as 500 billion baht in the next 15 years, the company said.
Source: Other (14.09.2004)

Stomana Industry is preparing the documents for two student classes that the company is going to teach. The documents will be submitted to the ministry of education by March, Mr. Tomcho Tomov, Viohalco staff manager in Bulgaria, said. The Greek group is a majority owner of the Pernik-based works. Training will comply with the new technology in the plant and stress on automation and intensive English teaching. We will guarantee jobs to the students and build closer relations through training and work with training equipment in real production, said Mr. Tomov. Stomana Industry is ready to meet the needs of other companies too. We could give a scholarship to some of the students to continue their education in higher institutes, added Mr. Tomov. Viohalco will prepare the up-to-date curricula together with the Technical School of Metallurgy and the Yuri Gagarin vocational school. Admittance to the classes in hydraulics and heat processing will start next year. A third course to the needs of a new high-technology unit that is now under construction in Stomana Industry will be opened too. “We worry that young men in Pernik do not see Stomana Industry as a prestigious job and a ladder of success”, said Mr. Tomov. “We want them to be sure that they will go to a modern company with fair remuneration and certain future”, ended Mr. Tomov.
Source: Dnevnik (14.09.2004)

Blagoevgrad-based company Kambitov & Son SPLtd. has been waiting for three months the delivery of 322 tons of iron paid in advance from the Pernik-based company Stomana Industry, a unit of the Greek group Viohalco JSC. Despite the plenty of reminders from Kambitov, the delivery was refused. The Blagoevgrad company sent yesterday an invitation to Stomana Industry to perform voluntarily its obligation, and if the quantity of iron was not delivered, legal prosecution would begin. As far as July, the amount of BGN 536 000 for 777 tons of iron was transferred to Viohalco. Instead of the whole quantity, Kambitov & Son got only 455 tons.
Source: Struma - Blagoevgrad (15.09.2004)

The global steel sector is entering a new phase. Growth in China has stimulated demand for steel across the Asian continent. The emerging and developing countries in the region are showing strong manufacturing activity - based on exports to the industrialised nations. Steel consumption is expected to move upwards over the next five years. The fortunes of the world steel scene cannot be estimated using regressive analysis. Previous cyclical trends are not being followed. Boom conditions currently apply - based mainly on perceived raw material shortages. In the three years between 2001 and 2004 we estimate that apparent consumption of finished steel expanded from 766 to 918 million tonnes. This represents an increase of almost 20 percent or a year on year average of more than 6 percent. This compares to a rate of 2.5 percent per annum in the ten years to 2002 and a 1.2 annual percentage over three decades, 1970 to 2000. We estimate global apparent consumption of finished steel in 2004 at 918 million tonnes - 5.3 percent above the year earlier figure. We do not expect the recent growth rates to continue into the medium term. However, we are forecasting further expansion in demand over the next few years - with apparent consumption of finished steel reaching 1 billion tonnes in 2008. This equates to an average annual increase of almost 3 percent over the next five years. This rather modest prediction is based on two key factors. Firstly, apparent consumption growth over the last three years is, in our opinion, above the level of real demand. A large amount of inventory building has occurred, particularly in China. The talk of shortages of raw materials has prompted buyers to carry higher stock levels than previously considered necessary. Low interest rates have made this exercise much less painful than in the past. Secondly, the Chinese government is keen to avoid overheating of their economy. It is making attempts to reduce growth in key industrial sectors, including steel. (source: MEPS)
Source: Other (15.09.2004)

Russia’s two biggest aluminum makers, RusAl and SUAL, RusAl being world’s second largest, are among the seven companies that took interest in the acquisition of 65.4 percent of the Montenegro aluminum refinery KAP. The other companies are the Montenegro Vectra, the Switzerland-based Glencore, which trades in metals and grain, the Indian Vedanta Resources, the German Bagr group and the Austrian A-TEC. The sale of KAP will be the first big privatization deal since October 2002, and the state is seeking for a strategic partner to meet the requirements for an output of at least 120 000 tons for 2003 and annual sales of at least USD 199 million. KAP, which accounts for 50 percent of the industrial output and 80 percent of the exports of the country, is planning to produce 120 000 tons of aluminum and 240 000 tons of alumina a year. The candidate buyers, which are to be shortlisted by the end of the week, shall submit their bids by December 1.
Source: Pari (15.09.2004)

As a result of covering short positions the price of copper on the LME ran up. Three-month futures traded for USD 4/ton higher than on Monday, at USD 2790-2795/ton, and in the earlier hours reached as high as USD 2805/ton. Aluminum gained USD 3/ton and steadied at USD 1703-1705 per ton. Tin went slightly down and lead stood still. Nickel rose USD 75/ton up to USD 12 500-12 575.
Source: Pari (15.09.2004)

South-Korean steel-maker POSCO and British-Australian giant miner BHP Billiton are planning to build a joint steelworks in Orisa, Eastern India. Investments in the new plant, which will be India’s biggest one, can reach 390 billion rupees (USD 8.5 billion). A POSCO spokeswoman confirmed that there were negotiations but the deal was not officially done. The final decision about the size of the new works was not made either. The steelworks planned will employ some 40 000 workers and most of its output will be exported. The South-Korean company is one of the largest firms in the steel industry. The Melbourne-based BHP Billiton is number one in the mining industry.
Source: Pari (15.09.2004)

RusAl, Russia’s biggest and world’s second largest aluminum maker, intends to become the industry’s top producer in 10 years by carrying out an investment programme for building new refineries in the country, worth USD 10 billion. RusAl produced 2.59 million tons of aluminum in 2003. The project has already started.
Source: Pari (16.09.2004)

Anglo-Dutch steel producer Corus yesterday reported its first profit since it was formed by the merger of British Steel and Hoogovens almost five years ago. Philippe Varin, the chief executive, acknowledged however that the group still had further improvements to make if it is to match its European rivals. In the first half of the year Corus turned an operating loss of GBP 57m into a profit of GBP 147m, with the recovery driven by an equal combination of soaring world steel prices and its own internal recovery programme.
Source: Other (17.09.2004)

Electric power exchange market is expected to be set up in 2005, Minister of Energy and Energy Resources Mr. Milko Kovachev said. Initially, only the biggest consumers of electricity in Bulgaria will take part in it. They will negotiate on the prices directly with the producers, which will provide the transparency of the deals. Each one of the Balkan countries is to establish its own energy exchange market – Romania, Greece, and Bulgaria, Mr. Kovachev explained. Currently, an intergovernment memorandum is being prepared, which will specify the rules of electricity trade. The document will be ready by the end of the year.
Source: Standart (20.09.2004)

Bulgaria's gross domestic product (GDP) may reach EUR 33 billion for 2010 and EUR 47 billion by 2014, according to an ING report called "Bulgaria in 2014". According to the document the country's accession into the European Union will enhance investments attracting immense cashflow into the local economy. the prospective adoption of the euro as a national currency in 2010 will further decrease interest payments over the country's foreign debt which can be transformed into a strategy for going out of the currency board. Monthly salaries in Bulgaria will stay at around 10% of those in the EU member countries and at between 30% and 45% of these in Central Europe. The cheap workforce is, however, attractive for foreign investors.
Source: Pari (20.09.2004)

Bulgaria's state debt reached EUR 8.226 billion at the end of July, falling EUR 567 million month on month, finance ministry data show. The main reason for the decrease was the DISC buy-back operation. The government redeemed USD 579.3 million worth of Bradies on July 28, ten years ahead of maturity. Thanks to this operation, the total state debt fell to 42.4% of GDP from 45.3% a month earlier, reaching a record low for the past few years. As of July 31, the state's foreign debt amounted to EUR 6.950 billion, domestic debt stood at EUR 1.276 billion. A total of BGN 2.327 billion was repaid in interest and principal for January-July. At the same time the international debts of the private sector surged by EUR 2.112 billion for the first seven months of the year to EUR 5.486 billion, Bulgarian National Bank data show.
Source: Pari (20.09.2004)

Stomana Industry will be next Bulgaria enterprise to sign a contract for liberalized purchase of electric power. The company is owned by the Greek group Viohalco. Some of the other companies which will be given the opportunity to do that are Assarel Medet and Mines Maritza Iztok, which are currently in a process of negotiations, Mr. Yordan Kostadinov, executive director of NPP Kozloduy said yesterday. On Friday evening the nuclear plant signed a contract for liberlized sale of power electricity with Umicore Med. The price in this deal is commercial secret, but it is at least 15 per cent lower than the one at which Umicore was previously forced to buy electricity from the National Electricity Transmission Company (NEC), Mr. Thomas Beamish – CEO of the copper plant revealed. Currently, all enterpises, consuming at least 40 000 mWh of electricity annually have the right to liberally purchase electricity. Next year, this right will also be given to clients consuming 20 000 mWh, in 2006- 9000, and in 2007 – all non-household consumers. Meanwhile, it became clear yesterday that the transmission fee, paid to NEC in such cases, will be changed. Currently, it is in the amount of BGN 11.80 per 1mWh of transmitted electric power. By the end of this year, it will be fixed depending on the distance. This promise resulted in the signing of the first contract for liberalized electricity sale, a source from the State Energy Regulation Commission said. The first amounts of electricity, sold at liberalized prices, were supplied last Thursday at 14:55 p.m. The supply schedule, which is a part of the contract, provides for updating each 168 hours. If the amounts negotiated for the week are not bought up, the buying enterprise should pay the remaining amount at a price of BGN 0.075/kWh. This is a punitive tariff, which means that the actual price under the contract is at least twice as low.
Source: Sega (20.09.2004)

Umicore Med, the Pirdop-based local unit of Belgian metals and materials group Umicore, became Bulgaria's first power consumer to sign a direct electricity purchase contract last week after clinching a deal with the Kozloduy nuclear power plant (NPP), energy minister Milko Kovachev said. The contract, which expires at the end of 2004 but is likely to be extended, further the liberalisation of Bulgaria's power market (estimated at 170 mln euro in 2004), the official said. The concrete parameters of the deal were withheld due to a confidentiality policy but NPP executive director Yordan Kostadinov said the tariff at which the plant will be selling electricity to Umicore is higher Umicore, whose 2003 power intake was 291gWh, was one of the 15 local power guzzlers with annual consumption exceeding 100gWh who made the list of consumers eligible for direct energy supply deals. Local smelter Asarel Medet and steel company Stomana Industry are also pursuing direct power purchases deals with Kozloduy. In June, Bulgaria's power industry regulator assigned NPP Kozloduy a 200MW quota which it is allowed to sell to eligible customers at negotiable prices. Bulgaria intends to open to competition up to 60% of its energy market by 2007 and to grant household customers the choice of power supplier while eligible industrial consumers will be allowed to import electricity. The National Electricity Transmission Company has already registered the Maritsa Iztok mining company, Asarel Medet and Stomana Industry as the next industrial consumers that will promptly complete the negotiations for direct power supply deals with the Varna, Bobov Dol, Rousse and Maritsa Iztok 2 thermal power plants.
Source: Dnevnik (20.09.2004)

The non-ferrous metals traded on the LME trended downwards late last week because of cash sales seeking fast profit. Three-month copper futures closed last week at USD 2810/ton, USD 13/ton lower than Thursday. Aluminum receded more feebly, by USD 3/ton, and steadied at USD 1710/ton. Lead slumped by USD 20/ton, and zinc – by USD 19. Gold closed at USD 403.40-404.20 per troy ounce, USD 1 down from Thursday. Silver lost 12 cents and stood at USD 6.19-6.22 per troy ounce.
Source: Pari (20.09.2004)

Kremikovtzi JSC, the debt-ridden metallurgical company, and Germany's Klosters Baustoffwerke GmbH & Co. KG will team up to build a cement mill on the site of the Sofia-based metals plant with annual capacity of 400,000 tons, the Bulgarian firm said on Monday. The 30 mln euro cement plant, which will process granulated metallurgical slag, will be managed by a joint venture where the Potsdam-based German partner will control a 75 per cent stake. Kremikovtzi JSC will contribute to the joint venture a 4.0 ha land plot, communication and technological infrastructure and the slag supplies. The construction of the plant is expected to be completed in 18 months, Kremikovtzi said. Finmetals Holding, the current owner of the Bulgarian metallurgical company, is still in talks with Global Infrastructure Holdings Ltd. to sell the special purpose vehicle controlled by the Mittal family a majority stake in Kremikovtzi. Indian daily Business Standard reported recently that buyer could invest as much as USD 300 mln in the acquisition.
Source: Dnevnik (21.09.2004)

Bulgaria's largest steel maker Kremikovtsi and a German cement-producing company have agreed on building a new cement plant on the Sofia production premises. The new plant, with expected annual capacity of 400,000 tones, is to meet all the necessary environmental requirements. The German "Kloesters" company will hold 75% of plant's assets and the investment is expected to amount EUR 30 M. Steel plant's waste product will be the main raw material used in the cement production.
Source: Other (21.09.2004)

BHP BILLITON, the world’s biggest diversification mining company, expects global demand and supply of metals to balance, as high prices of metals are an incentive for the companies to increase output. For years now, low investments in new production, shrunk supply and brisk demand, especially in China, have been pushing prices to their record levels earlier this year, and have brought consolidation in the sector and rise in the mining companies’ shares. Most of BHP Billiton’s mines and refineries work at their full capacity to meet the soaring demand that according to the experts would continue till the end of 2004. Meanwhile, the Canadian Falconbridge, the third biggest nickel producer, said yesterday it was planning to boost output by 60 000 tons in the next 4 to 6 years.
Source: Pari (21.09.2004)

Three-month copper futures rose on the LME up to USD 2831/ton versus USD 2810/ton at the Friday close after buys and cutting the exchange stores by additional 1000 tons down to 101 900 tons. Aluminum gained USD 3/ton in its price from the end of last week and traded at USD 1713/ton. Zinc did not trade on Monday but price jumped USD 3.50/ton up to USD 972.50/ton. Nickel rose by USD 25/ton up to USD 12 775/ton.
Source: Pari (21.09.2004)

Non-ferrous metals went up, as exchange stores, shrinking for a whole month now (key copper and aluminum stores are already 4 700 tons and 475 tons less), and devaluation of the US dollar forced traders to cover their short positions. On the LME the three-month copper futures traded at USD 2782, USD 13/ton up versus Monday. Aluminum rose by USD 11/ton up to USD 1712/ton. Nickel prices jumped by USD 350/ton up to USD 12 950/ton and zinc traded unchanged from Tuesday at USD 992/ton.
Source: Pari (21.09.2004)

The European Commission removed the monitoring and the restrictions over the export of Bulgarian hot rolled coils to the EU countries, Kremikovtzi announced. The antidumping procedure was initiated in 1999 and continued until 2004. By decision dated September 13 this year, all restrictions were removed, which means that the plant can already sell its production freely on the European market. The document took retroactive effect as from March 20, 2003. Thus the European clients of Kremikovtzi will thus be able to refund the duties paid after this date. For a period of four years Kremikovtzi was under the control of the European administration due to signals for antidumping export of the country to European steel-producers. Kremikovtzi has concluded an agreement for export of the major part of its production, mainly hot rolled coils, on prices higher than the EC’s fixed minimal prices. The EU controlled these contracts and the EC imposed foreign duties to another part of the production. For 5 years in a row, on each third month, an investigation of the engagements entered into was performed. In the middle 2003 Canada also investigated the Bulgarian steel producers for antidumping import. It occurred then that Bulgarian metals’ import in the country was implemented through mediators. In the US Kremikovtzi is forbidden to import more than 3 percent of the total import’s quantity. Otherwise, the company will be immediately included in the list of the importers imposing market’s dumping. 85 percent of Kremikovtzi’s production are purposed for export mainly to the EU. The plant’s first-half revenues are in the amount of BGN 440 million, according to the data of the financial report filed to Bulgarian Stock Exchange. The assets of the metallurgical enterprise exceed BGN 1 billion, as BGN 795 million of them are the fixed assets. The program, made for restructuring the Bulgarian steel production in compliance with the EU’s requirements, stipulates shrinking of the steel production’s capacity. It concerns mainly Kremikovtzi, but Promet steel JSC – Sofia and Stomana - Industry JSC – Pernik are also included. The steel production is a significant branch in the community and the enterprise engaged to shrink the production capacity since they were provided a state support proved by the Commission on Competition Protection’s decision. The plant’s managers repeatedly asked the state to introduce duties for the steel products’ importers, as Ukraine and Romanian importers made dumping to them. However so far there is no decision for the matter concerned.
Source: Sega (23.09.2004)

The European Council completely removed the monitoring and sanctions against the export of Bulgarian hot rolled coils to EU members, Kremikovtzi’s PR department reported. So far, the company had an agreement for export of the major part of its production (namely hot rolled coils) at prices higher than the minimum fixed by the EC. This agreement was a subject to constant monitoring by EC. Another small part of the exports was subject to antidumping duties. By the EC decision, dated September 13, all limitations were removed, which means the Bulgarian company is already able to sell its production on the European market freely. The decision has been promulgated in EU’s official gazette on Friday September 17 2004 and becomes effective backdated as of March 20 2003. This means that the clients of Kremikovtzi JSC in the EU may restore the duties paid after this date in the import of Bulgarian production, added from the company. In January 1999, EC initiated an antidumping procedure against Kremikovtzi. The measure was prompted by complaints by European steel producers against the dumping import of Bulgarian steel by the state-owned metallurgical enterprise. The plant was faced with the risk of either imposing a ban against import or introducing quotas, which would eventually lead to its bankruptcy, since EU is its main market.
Source: Dnevnik (23.09.2004)

The European Union (EU) has demanded World Trade Organization (WTO) to investigate whether US lifted the duties on certain steel products it imposed five years ago that were found illegal by WTO in 2002. Although the measures called the “Byrd Agreement” were found illegal, US officials claimed that the duties were adjusted in line with the trade rules of WTO. However objections to the Byrd Agreement have not ceased and EU demanded WTO to search the case. As previously reported by SteelOrbis, in early September WTO announced that it would allow EU and seven other nations to impose punitive duties worth $150 million on US goods since the US Congress failed to revoke anti-dumping duties which were found to be violating global trade laws. Now, upon the request of EU, a panel will be held to hear both sides. If the US does not comply with the rules, EU will probably ask for WTO approval to impose punitive sanctions.
Source: Other (23.09.2004)

Several companies operating in metallurgy, hotel management and food and beverage industries are preparing their documents to apply at the Bulgarian National Bank (BNB) for the establishment of a new bank, the Banker weekly learned and asked Mr. Lyudmil Stoykov, who is a majority owner of Ladimex, Eurometal and the travel agency Bultrade, for further information. Through them he controls big joint stock and partnership stakes in some ten companies, the sea resort Duni, Ladimex Holding, Stomana - Industry, Radomir - Metals and Eurostroy - ZS being among them. Two new hotels have been built in Duni for the last two years. In 2003 the four-star Belvil was constructed and in 2004 – the five-star Marina Royal Palace. Another five-star hotel is to be built in Duni in 2005. Just some of these companies intend to be the founders of the new bank and hope that it will be granted a license by the BNB. Mr. Lyudmil Stoykov specified that the companies participating in the project are planning the capital of the bank to be to the amount of BGN 11.5 million. “I cannot name the candidate shareholders right now for it might happen that some of the companies expressed their willingness to participate would later fall off. We will announce the companies’ names when we file the license application along with all the attendant documents in the BNB. I expect it to happen by the end of October”, Mr. Stoykov told the Banker.
Source: Banker (27.09.2004)

National Statistical Institute (NSI) announced the data for Bulgarian GDP for the second quarter of 2004. The real GDP’s growth is 6 percent – the highest value since starting maintenance of this statistic rate and indisputably a very good achievement of Bulgarian economy. The major index in the manufacture’s growth data is the increment of the gross value added. As for the whole economy it mounts totally with 5.6 percent for the quarter y/y. Impressively, the industry’s growth for the ninth quarter in a row exceeds the one of the services – respectively 7.6 and 5.4 percent and thus the tendency started in 2002 is kept. These favorable results correspond to the growing industry’s sales and manufacture that reached respectively 26.4 and 21.5 percent increase in June y/y following a two months in a row fall.
Source: Dnevnik (27.09.2004)

Metallurgical companies throughout the world are breaking production records. Global output for the first eight months of 2004 increased by 8.5 percent, as the major incentives for the companies to boost production were the increased demand and prices of steel and steel products. The International Steel and Cast Iron Institute reported that the steel produced in the world for the period January – August 2004 y/y was exactly 8.5 percent more or 675.5 million tons. In Russia steel output went up by 4 percent to 42.49 million tons in the first 8 months of 2004. A total of 74.04 million tons (5.7 percent more than the same period of last year) was produced in the CIS countries. A number of big West-European steel-makers raised production prices, mainly due to the high prices of coking coals, iron ore, coke and ferrous metals scraps. The rise in the price of electric power and gas and the increased transportation costs were the other reason. The world’s biggest steel maker Arcelor is the most eloquent example. The company intends to raise steel prices by 20 percent on annual basis by the end of the month. Currently demand for metal products both on world and domestic markets is reaching its top and according to the forecasts about the development of the world economy, this perspective will remain.
Source: Pari (27.09.2004)

Within days, debt-throttled metallurgical plant Kremikovtzi JSC has managed to dodge one insolvency lawsuit only to stumble straight into a new one. The Sofia-based metals firm has worked out a deal with creditor Stroykomplekt after the latter filed an insolvency suit over an outstanding debt of BGN 520,000. Kremikovtzi has reportedly agreed to pay off half of the litigated amount if Stroykomplekt drops the lawsuit filed in July this year. But only a day after the court stayed proceedings in the Stroykomplekt case on September 23, another creditor of the metallurgical plant, Inzhtalant, filed a separate insolvency petition in a bid to collect a court-certified debt of BGN 400,000 from Kremikovtzi. Mr. Nikolay Batashki, the Inzhtalant lawyer, said he has alerted the Commission for the Protection of Competition about the rescheduled payment of some BGN 146 mln that Kremikovtzi owes the National Electricity Transmission Company (NETC), Bulgargas and the National Social Security Institute. The commission said on Monday it was not poised to act on his petition but Batashki said he would appeal before the Supreme Administrative Court. The anti-trust authority said in late 2003 that the rescheduling of Kremikovtzi's debts to state-owned creditors did not constitute state aid. The news of the Stroykomplekt insolvency suit prompted several creditors to join the legal action in an attempt to recover in excess of BGN 3 mln from Kremikovtzi. One of the litigants, the Pepo-Petar Rizov company, is now appealing the staying of the Stroykomplekt lawsuit. In 2003, Kremikovtzi clinched a deal to reschedule the payment of BGN 36 mln to gas supplier Bulgargas over a 10-year period while convincing NETC to consent to an identical repayment scheme for debts of BGN 76 mln. Two months ago, parliament urged the government to take measures to collect the BGN 146 mln that the plant owes the state. On September 8, the government instructed the ministers of economy and of finance to prepare a report with the exact debt figures and the schemes for their repayment. Meanwhile, Finmetals Holding, which owns 71 per cent of Kremikovtzi, is in talks to sell a majority stake in the metallurgical plant to India's Global Infrastructure Holdings Ltd.
Source: Dnevnik (28.09.2004)

The world's third biggest zinc and ninth biggest copper maker, the Canada-based Noranda, will probably be taken over by the state-owned Chinese metal group Minmetals. Both companies have been leading exclusive talks since Friday and the Canadians will remain closed for other proposals for 45 days. The deal is estimated at over CAD 6.5 billion /USD 5 billion/ and should be completed by the end of November. Through the deal Minmetals and the growing metals’ demand in China will receive an access to zinc, copper and nickel assets including the control over Falconbridge, ranked third on its nickel extraction. Minmetals was chosen among other applicants, even giant mining companies including the Brazil-based CVRD – the top iron ore miner, Anglo American, XStrata, BHP Billiton and Phelps Dodge. The terms of the Chinese offer were not announced but Noranda reported that the preliminary Minmetals’ offer proposed larger cash amount and a low premium to the current prices of the Canadian company’s shares. Minmetals’ revenues reached the amount of USD 11 billion in 2003. Noranda holds 60 percent of the capital of Falconbridge – the company considered as the Canadian crown’s pearl.
Source: Pari (28.09.2004)

Copper prices reached new 5-month high of 2959 USD/t on the LME. Yesterday the three-month copper futures gained 49 USD/t to their Friday quotes. The sharp upward trend is a result from the covering of funds’ short positions, panic and hoarding of stockpiles. Metal experts forecast these factors would push copper prices to even higher levels. Aluminum added 13 USD/t to its price reaching 1808 USD/t. Nickel’s price was up another 75 USD/t to 14 675 USD/t. Zinc steadied at 1024-27 USD/t, adding 7 USD/t.
Source: Pari (28.09.2004)

The third biggest copper producing and processing company was incorporated in Russia under the name of Russian Copper Company. It is going to produce more than 130 000 t of cathode copper a year, only behind Norilsky Nickel and UGMK. It comprises the companies from the copper group Altushkina-Volhina-Dimshakova, producing and selling over 15 percent of the metal in the country. The biggest plants within the structure of the new holding are the Kishtimski plant, Kalarabashmed, Uralgidromed, Alexandrinska copper company, and Novgorodski metallurgical plant.
Source: Pari (28.09.2004)

The auction for the Russian copper deposit Udokan, evaluated at 20 mln t (average copper content in the ore – 1.53 per cent) is not expected to take place before 2005. 30 per cent of Russia’s proven copper stocks are in this deposit.
Source: Pari (28.09.2004)

Four candidates for the purchase of a majority stake in Montenegro-based aluminum smelter, Kombinat Aluminijuma Podgorica – KAP, have been included in the short list, prepared by Montenegro’s Privatization Agency. These are the Switzerland-based Glenkor, India’s Vedanta Resources, and Russia’s Rusal and SUAL. They will be invited to submit binding offers and an EUR 1-mln guarantee by December 1 this year. Five more companies have shown interest in the privatization of the aluminum plant – Germany’s BAGR, Austria’s A-TEC, Montenegro’s Vectra, Lithuania’s investment group UAB and Switzerland’s IMR. At the beginning of August the government in Podgorica announced an international auction for the sale of 65.44 per cent of KAP’s shares. Government consultant on the deal is the French bank BNP Paribas. According to the plant’s privatization strategy, companies operating in the aluminum branch having produced at least 120 000 t or having sold at least EUR 165 mln worth of production last year are allowed to take part in the auction. Candidates may also be financial investors, managing at least EUR 300 mln worth of assets. The government in Podgorica indicated it would support any potential bidder, willing to invest in KAP at least EUR 100 mln. Besides, it decided to remit EUR 116.6 mln of the plant’s debts, amounting to over EUR 250 mln, as well as to give the potential buyer the opportunity to directly negotiate with the creditors concerning the payment of the remaining part of the debts. KAP accounts for half of Montenegro’s industrial output and 13.5 per cent of the country’s GDP. The company is also the country’s biggest exporter.
Source: Dnevnik (28.09.2004)

Kremikovtzi JSC has invested almost BGN 2.5 mln in the repair and rehabilitation of its Third Blast Furnace (TBF). The repair is of III discharge and is the latest one of this type before the complete reconstruction, modernization and renovation of the furnace. A similar repair was implemented in First Blast Furnace two years ago. As a result of the undertaken measures, the labour stability and productivity in the third blast furnace was improved significantly. Its production capacity has increased from 1200-1300 t of cast iron a day to 1600-1700 t. Some days, it even reaches almost 1800 t. Coke consumption has been significantly reduced as well – from 650-670 kg of coke per 1t of cast iron, to 580-600 t after the repair.
Source: Company information (28.09.2004)

As of September 29, Bulgaria’s basic interest rate (BIR) will be 2.39 per cent from 2.40 per cent currently. The annual yield of the three-month interest-free state securities with maturity December 29 2004, for which BNB made an auction on Monday, is 2.39 per cent.
Source: Dnevnik (28.09.2004)

The Big Taxpayers and Insurers project is starting on October 4 this year. 240 big Sofia-based companies will be able to file their monthly declarations to the National Social Security Institute and to register labour contracts in the house of the Big Taxpayers Department on 31 Aksakov Str. 1000 big companies, of a total of 177 000 insurers, pay 38 percent of the insurances in the country. 504 companies pay 67 percent of the taxes in Bulgaria.
Source: Standart (29.09.2004)

Stomana JSC – Pernik is calling a general meeting of the shareholders on October 27. The agenda includes writing-off of costs accrued for tangible fixed assets, offsetting of receivables, writing-off of current assets, writing-off of receivables for shortages and deficiencies of liable persons, writing-off of credits under the Law on Settlement of Non-Performing Loans. The deadline for gaining company shares, giving vote in the general meeting of the shareholders, on the stock exchange is October 11.
Source: Pari (29.09.2004)

The world mining industry will mark a record year 2005 thanks to the soaring demand for metals and coal in China and in the world, according to a forecast by the National Mining Association (NMA), representing the interests of 300 companies in the sector. Meanwhile investors keep on pouring resources in the non-ferrous and precious metals market, riding the upward trend. Copper, having reached a 5-month high at 2975 USD/t and shooting up to the 8.5-year high of 3050 USD/t, stepped back and steadied yesterday at 2945 USD/t. Aluminum fell by 4.50 USD/t from Monday down to 1808 USD/t and is near to its 5-month high, and nickel rose by 25 USD/t up to 14 650 USD/t. Lead gained 6 USD/t up to 934 USD/t, and zinc went down to 1028 USD/t from 1033 USD/t the previous day. Meanwhile, a top titanium producer emerged in Russia after the merger of AVISMA and VSMPO.
Source: Pari (29.09.2004)

The Chamber of Ferrous and Non-Ferrous Metallurgy and the Aid to casualty metalworkers and their families charity fund, established by its members, will endow on September 30, 2004, 19 children of metalworkers, victims of employment accidents with successive permanent or temporary disablement, as well as of seriously ill workers. During the International autumn fair in Plovdiv 6 children of workers in the Plovdiv-based Combine for Non-ferrous Metals (KCM) JSC and Anils Ltd. will receive personally from the managers of the fund BGN 200 relief as financial aid for the beginning of the school year. The official bestowal will take place in the office of Kremikovtzi JSC, chamber 13, on September 30, 2004 from 2 p.m. The managers of the companies Shamot JSC, Kremikovtzi JSC and Umicore Med JSC will take the money for the remaining 13 children. KCM JSC, Plovdiv and Kremikovtzi JSC are the token host of the event. The Aid to casualty metalworkers and their families charity fund was established at the beginning of this year by the idea of Mr. Alexander Kashukeev – Chairman of the managing board of Metalsnab Holding JSC, Sofia. Nine ferrous and non-ferrous metallurgical companies have granted donations to the fund so far.
Source: Company information (30.09.2004)

American Institute for International Steel (AIIS) has recently demanded antidumping duties on finished steel products to be suspended temporarily as finished steel imports are historically low for a robust market in Jan-July period of this year. Statistics show that US steel imports in July decreased by 11.3% to 2.7 million mts from 3.05 million mts recorded in June. Although imports indicate an increase in the first seven months of this year, AIIS says that the import levels are still low in proportion to the market condition. Therefore AIIS demands temporary suspension of antidumping duties on finished steel products, similar to the action taken by China.
Source: Other (30.09.2004)

According to the preliminary data released by the US Commerce Department, US steel imports were recorded as 3.1 million mts in August, indicating a rise of 8.6% compared to the previous month’s result. August tonnage includes 2.5 million mts of finished steel with a 5.7% rise compared to the previous month. These were the highest import levels since August 2000. Year-to-date imports in both categories rose by 41% compared to the same period of last year. It is reported that the sharp increase in imports supports the need to continue import monitoring and enhance the existing system. In the first seven months of 2004, finished steel imports were up by 34% compared to the corresponding period of last year. This rate indicates a two-fold increase against 16% rise in steel consumption. As a result, steel import penetration in the US in this period has increased from 16.6% to 19.2%. From July to August, the change in steel imports reflects increases in blooms, billets, slabs, reinforcing bars, standard pipe and hot rolled sheets. Monthly changes in steel imports indicate increases from Russia, China, Taiwan, Canada and Mexico. In the first seven months of 2004, steel imports reached 17 million mts against 12.7 million mts recorded in the corresponding period of last year. The largest commodity increases were in blooms, billets, slabs, wire rods, reinforcing bars and hot rolled sheets. The largest country exporters to the US were Brazil, Turkey, Russia and Mexico. The data shows that Turkey has exported 128’820 mts of finished steel to the US in August. This pace was 50.7% lower compared to June. Major import quantities of finished steel into US appear to be coming from EU, Canada, China, Russia and Mexico.
Source: Other (30.09.2004)

Gold and copper traded yesterday round the 5.5-month highs. Three-month copper futures hit a 7-month high on the US markets and during trade in Asia settled at 3010 USD/t, which is a 5.5-month maximum. Zinc reached a 3.5-month price record at 1097.50 USD/t. Animation on metal exchanges is explained with the investors’ interest, sales seeking fast profit and anxiety for shortage of some metals.
Source: Pari (01.10.2004)

Phone number 9888205 was introduced to collect information about pollution of the environment and infringement of the environmental legislation. It has been working since March 1998 every day with a duty operator. For these more than six years 444 calls about environmental problems have been registered. Not long ago residents of Pernik complained of air pollution. It proved that the company Stomana Industry JSC had turned off its filters during the night. A check-up found that the air pollution in the region was caused by out-of-gear emissions. The company was instructed to move the scraps-cutting unit to an appropriate place, outermost from the populated district.
Source: Duma (02.10.2004)

The Russian Federal Property Fund hopes to sell 18.8% of Magnitogorsk Metallurgical Combine (MMK) - Russia's biggest steel mill - in December 2004. "The auction will be announced in November," the property fund told Interfax. "The auction will take place a month later," the fund said.
Source: Other (04.10.2004)

Bulgaria’s budget surplus reached BGN 1.191 bln at the end of August, Ministry of Finance reported. Within a month only, the surplus has grown with some BGN 215 mln. Budget revenues were in the amount of BGN 10.31 bln, while expenditures totaled some BGN 9.11 bln. Municipal budgets have also posted a surplus of BGN 73.72 mln.
Source: Standart (05.10.2004)

Arcelor, the world's biggest steel maker, is threatening to stop supplying some of its largest customers unless they agree to hefty price increases due to come into effect next year. The likelihood of price rises of up to 20 per cent for iron ore and at least 10 per cent for coking coal was putting "intense" pressures on leading steelmakers' costs, Mr Dolle chief executive of the Luxembourg-based company, said. The situation left Arcelor little choice but to attempt to pass those costs on to customers.
Source: Other (05.10.2004)

Most of the non-ferrous metals sank down from the last week highs on the LME, led down by copper. After inventories on the LME jumped by some 9000 t, three-month copper futures traded at 2973 USD/t versus 3017 USD/t on Thursday, a 5.5-month high. Aluminum, having reached a 9-year record at 1857 USD/t last week, sold at 1819 USD/t. Zinc rose by 19 USD/t up to 1126 USD/t.
Source: Pari (05.10.2004)

Kingston Enterprises has bought shares in the steelmaker Stomana JSC of Pernik, southwestern Bulgaria, so that its stake in the company already reached 10 per cent. The stock were acquired from Ms. Elza Radkova on September 27. Economy ministry is the owner of 75 per cent stake in Stomana, while AKB corporation holds at least 10 per cent. The last deals with Stomana's shares on the Bulgarian Stock Exchange was on September 23, when 363,823 of its shares changed hands at a record-high price of BGN 3.99. The previous deal on the bourse was on July 29 when 362,503 shares were sold at a price of BGN 0.43. Stomana JSC will hold a general shareholders' meeting on October 27.
Source: Pari (06.10.2004)

Chelopech mine will raise its ore output to 65,000 tonnes a month by the end of the year, up from the present 56,000 tonnes, Canada's Dundee Precious, which has concessioned the mine, said. Implementation of additional underground equipment and revitalization of the already existing utilities will vouch for increase of the monthly output to 125,000 tonnes of copper-gold ore by mid-2006. The company has already ordered a research on the gold extraction opportunities at Ada Tepe near Krumovgrad, southeastern Bulgaria. The research will be carried out by the Australian engineering company Ausenco Limited. The final report on the issue is expected to be completed by March 2005. By that time, the assessment of the environmental impact of the project is also to be ready. A month ago company representatives said that the gold deposits at the site runs to 30 tonnes. Dundee Precious expect to extract 4.6 tonnes a year.
Source: Dnevnik (06.10.2004)

Steel producer Mechel will become Russia's first metals firm to trade on the New York Stock Exchange after it lists about 10 percent of its stock there later this year, Reuters announced. The move comes at a time when many Russian metals firms, keen to prove themselves as global players on the back of high commodity prices, are eyeing foreign listings or closer ties with Western firms to fund expansion.
Source: Dnevnik (06.10.2004)

The Germany-based engineering group ThyssenKrupp stipulates the construction of a steel factory in Russia, Brazil or Russia, the local media reported. The value of the investment planned amounts to USD 1.5 billion. In few months it will become clear where precisely the plant will be constructed. ThyssenKrupp is reorienting to investment outside Germany due to the unfavorable market conditions in the country, as well as the high enough manufacture expenditures.
Source: Dnevnik (06.10.2004)

LNM Group, the world’s second largest metallurgical company, is planning to invest over USD 1 bln in the modernization of its operations in Eastern Europe over the next 3-5 years, Reuters reported. The brothers of LNM’s owner – the British businessman of Indian origin Lakshmi Mittal, are interested in buying Kremikovtzi through the company Ispat Industries. The investment will allow the company, which is competing with a number of Austrian and Slovak producers, as well as with Russia and Hungary, to offer products of higher quality. The region traditionally exports products of lower quality. All costs will be covered at the expense of the existing financial resources. Steel demand in the region is definitely growing. The current EU consumption levels are 400 kg compared with only 200 kg in Poland and Hungary, Mr. Roland Baan, CEO of LNM for the region of Central and Eastern Europe, said at a steel forum held in Prague. LNM expects to produce some 44 mln t of steel and realize a turnover of USD 23 bln. Some 14 mln t will be produced in Eastern Europe, where LNM acquired a number of plants in the past 3 years. The company confirmed it would take part in the tender for Czech’s Vitcovice Steel and is interested in Poland’s Huta Czestochowa.
Source: Pari (07.10.2004)

Commission on Protection of Competition terminated a case against Kremikovtzi, initiated following request by Mr. Nikolay Yordanov Batashki, chairman of the civil association “N&N”. According to him, Kremikovtzi JSC has been granted a state aid in the form of extension of its debts to other enterprises, in violation of the Tax Proceedings Act and the Protection of Competition Act, which has resulted in unfair competition and abuse with the plant’s dominant position. In the course of the investigation, the Commission has found that N&N does not have any economic activities, competing with the metallurgical plant’s activity. Consequently, its legal interests, in theory and in practice, could not be harmed in any way. This circumstance gave CPC reason to terminate the proceedings under the case.
Source: Company information (07.10.2004)

Local steel plant Promet Steel JSC, part of the international Steel Neva Consortium, will hire Austria's voestapline AG to deliver a continuous casting furnace, supervisory board chairman Penyo Donev said. The USD 50-USD 60 mln project is bankrolled by the Promet shareholders, Donev said. The production component of the installation will be completed by 2007. A line for the production of wire rod will be added as soon as 2006. The new furnace will allow the company to achieve its top annual capacity of 800,000 tons. Promet Steel, located near the coastal city of Bourgas, has rolled off 230,000 tons of output with 90 per cent of production being shipped abroad. Year-end output is seen at 320,000 tons, up from 128,000 tons in 2003 and 50,000 tons in 2002. Production has been boosted by innovative steel processing methods that have slashed output costs by 40 per cent, Promet executive director Mr. Miroslav Borisov said.
Source: Dnevnik (08.10.2004)

The inter-government Bulgarian-Chinese joint cooperation commission, which will be held on October 17-18 in Beijing during the visit of Bulgaria’s deputy prime minister Ms. Lidia Shouleva, will discuss some joint projects between the two countries. Our delegation will be led by the deputy minister of economy Mr. Radoslav Bozadjiev. The joint projects, which will be discussed, are in the field of power engineering, infrastructure, telecommunications, and household electronics. Business forums will be organized for the companies operating in these branches in Beijing and Shanghai. Some of the other topics that will be discussed is encouragement of Bulgaria’s exports of iron, steel ,machines, wine, and rose oil. The trade between Bulgaria and China in 2003 amounted to USD 339.4 mln, which represents a 135-per cent growth y/y. Most of the Chinese imports to Bulgaria consisted of automobiles, electrical appliances and rice. 21 joint Bulgarian-Chinese companies were registered in Bulgaria’s Chamber of Commerce and Industry.
Source: 24 chasa (08.10.2004)

Industrial output rose 18.3% y/y in August but fell m/m, shows preliminary data of Bulgaria's National Statistical Institute. Processing industry output jumped 24% y/y while mining industry production was up 11.7% y/y. Industrial sales soared by 23/1% y/y in August but were 8% off the previous month.
Source: Dnevnik (11.10.2004)

Three-month copper futures hit 16-year record levels of 3145 USD/t and are on their way of conquering the historical high, registered in 1989 – 3280 USD/t. On Friday alone, copper’s price increased with 100 USD/t, following China’s return on the market and the expected strike in one of the units of the world’s biggest copper producer – Codelco. China plays a major role on the market . In 2002, it ousted USA from the world’s number one consumer position, and in 2003 it outstripped USA with 35 per cent. The biggest problem on the market right now, however, is the significant copper deficiency. Besides, exchange inventories have reduced more sharply and quickly, than expected, with a total of 80 per cent. Their amount is lowest since 1996. In September alone, they shrunk with 14 per cent. Fears of strikes in the world’s leading copper producing countries – Chili and Peru, also influenced the upward movement of prices. Supplies are limited, while demand is high, which results in significant market deficit. Futures prices at LME increased 11 per cent last month. Currently, copper is traded at prices 150 per cent higher than 2001, when they reached a 15-year high, and 40 per cent higher compared with December 2003. Copper prices slightly revived in March, when they marked an 8.5-per cent peak of 3055 USD/t, as a result of the active exchange deals, stimulated by the poor presentation of the other financial assets and stable market factors. According to some analysts, however, the current high quotes of the red metal will maintain over the next 6 months, after which they will go down, because market supplies will grow, and the economy will deteriorate as a result of the high oil prices. The latest data, proved by the International Copper Study Group (ICSG) show that the world’s 2004 copper production output will increase with 897 000 t or 6.6 per cent reaching 14.55 mln t. Next year, they will jump to 15.63 mln t. This year, processed amounts worldwide will grow 3.7 per cent up to 15.77 mln t, and in 2005 – with 7.3 per cent up to 16.93 mln t. Refined copper consumption globally will increase with some 5.7 per cent or 887 000 t this year, reaching 16.47 mln t, while in 2005 it will increase with another 4.1 per cent (673 000 t) to 17.15 mln t.
Source: Pari (11.10.2004)

Last week aluminum futures reached a 9-year peak of 1878.50 USD/t. In the end of September, aluminum was quoted at 1800-1804 USD/t at LME. The main reason for the upward movement of its prices is increased consumption. According to the London-based consulting company Bloombsbury Minerals Economics, demand will grow with 7 per cent in 2004. China is forming the trend on the world non-ferrous metal market therefore it is important to know that China is planning to shrink its own aluminum production with 14 per cent. The country intends to make up for the deficiency of the raw material through import. Chinese demand has never been bigger. Since China intends to execute a project for the electrification of the whole country, considering its large territory, demand could not be expected to shrink. Record prices are also a result of the reduction of aluminum inventories on the stock exchanges. As of today, LME inventories are in the amount of 686 000 t, while a week ago they totaled 700 000 t. Besides growing Chinese demand, another reason for the hike in aluminum prices is the fact that over the past ten years, the investment flow in the sector has not been big enough. According to experts, production capacities have not grown, while demand has not shrunk, which has resulted in growing prices. Hedge funds were impatient to penetrate aluminum market, attracted by the good profits on it, although this business is not specific for them.
Source: Pari (11.10.2004)

Starting October 2004, Kremikovtzi JSC will start sinking its former debts to the State Fund for Reconstruction and Development (SFRD), which were accumulated by the metallurgical plant before its privatization, the company’s official spokesman Mr. Todor Hristov announced. According to the privatization contract, Krmeikovtzi JSC and its majority shareholder Finmetals JSC are obliged to serve their debts to the fund in the amount of USD 35 mln principal nad USD 9 mln interests. The debts are due to be paid up within 15 years with a 5-year gratis period. The payments are due on every three months.
Source: Company information (12.10.2004)

Kremikovtzi JSC is starting to sink its former debts to the State Fund for Reconstruction and Development this month, the company’s press center announced. The debts of the metallurgical plant were accumulated before its privatization. According to the privatization contract, Kremikovtzi JSC and its majority shareholder Finmetals JSC are obliged to serve the debts to the fund, which are in the amount of USD 35 mln principal and USD 9 mln interest. The debts are due to be paid up within 15 years with a 5-year gratis period. The payments are due on every three months.
Source: BTA (12.10.2004)

Bulgarian Stock Exchange (BSE) will introduce a new bourse index, which in contrast to SOFIX will include 40 listed companies. The criteria on including a company in the index, as well as additional details will be officially disclosed tomorrow. BSE representatives told the PARI daily that the index will reflect changes in the stock prices, while the current blue-chip SOFIX represents the market capitalisation of the 13 enterprises included. The most famous price index in the world is the U.S Dow Jones 30, and well known market capitalisation-based indices are the German DAX and the U.S. Nasdaq, for instance. According to analysts, it is difficult to say whether a price index or a market capitalisation-based index gives better view on the current market situation. An index including 40 companies, however, will surely give a better idea of the stock market trends, experts added.
Source: Pari (12.10.2004)

KPMG-Bulgaria, the local division of the global business service provider, has launched an audit of the accounting records of Kremikovtzi AD as part of the Bulgarian government's efforts to collect from the indebted metallurgical plant. The government, a minority shareholder in Kremikovtzi, was forced to take action after parliament insisted that something is done about the mounting debts owed by the steel plant to various state institutions and organisations. Upon completion, the KPMG audit will be submitted to parliament. The State Receivables Collection Agency has imposed in injunction on the bank accounts and some movable and immovable property of the metallurgical plant at the request of the Customs Agency, the environment ministry and the National Social Security Institute (NSSI), says a government report on Kremikovtzi's financial state. An auction has also been scheduled for the plant's recreational facilities in the Vitosha mountain and the coastal town of Kiten. Kremikovtzi owes over 72 mln levs to the Customs Agency, 5.1 mln levs to the NSSI and 1.5 mln levs to the environment ministry. The government has so far managed to enforce 2.2 mln levs of the total debt amount. The plant started from October 1 to service outstanding debts towards the defunct State Reconstruction and Development Fund, the management told news agency BTA on Monday. The metallurgical firm owes the fund $44.5 mln with interest. The final report detailing the debt-collection measures implemented by Kremikovtzi's state-owned creditors should be submitted to the government by late November. There is still no word on the status of the talks between Finmetals Holding, which owns 71% of Kremikovtzi, and India's Global Infrastructure Holdings Ltd (GIHL). The Indian press reported in early September that the suitor, controlled by the Mittal family, was set to acquire a majority stake in the Bulgarian metals firm.
Source: Dnevnik (12.10.2004)

Pernik-based steel plant Stomana Industry has invested BGN 246 291 in a new slag processing installation. It should be put into operation within a month. The new line has a capacity of 150 t/h. It allows for the extraction of iron, which content in slag is 2 per cent. The plant produces some 6000 – 10 000 t annually, which were previously stored in depots, without being used.
Source: Dnevnik (12.10.2004)

Stomana Industry will be producing iron from waste. The new facility in the plant will alow to extract 2 per cent iron from the processing of the slag. BGN 246 000 have been invested in the building of the installation. Its capacity is 150t/h.
Source: Standart (12.10.2004)

South Korea's largest steelmaker Posco said Tuesday its third-quarter net profit more than doubled to 1.012 trillion won ($883 million) from a year earlier, due to robust demand. The results beat analyst estimates. Net income for the three months ended Sept. 30 rose from 500 billion won a year earlier. Sales climbed 41 percent to 5.144 trillion won, while operating profit rose 72.5 percent to 1.244 trillion won, the company said in a statement. Analysts had expected the world's fifth-largest steelmaker to report a 800-920 billion won net profit on sales of 4.6-5.2 trillion won, according to AFX-Asia. Posco said its steel production is expected to reach 30 milllion tons this year, up from 28.9 million tons a year ago.
Source: Other (12.10.2004)

Radomir Metals and Japan’s Kobe Steel are starting joint production of crushers, the director of the Radomir-based company Mr. Plamen Bonev announced. The crushers will be used in the cement industry in India and China.
Source: Standart (13.10.2004)

The non-transparent state projects auction and competition procedures, the sale of products without invoices, the lack of clarity around the VAT reimbursement, as well as slow court procedures, are the main hindrances investors are facing in Bulgaria, Mr. Panayotis Kotzikos, chief secretary of the Athens Chamber of Commerce and Industry said yesterday, during the Greek business forum, organized by the Bulgarian Chamber of Commerce and Industry and the Greek embassy to Bulgaria, which was held in the Sheraton hotel in Sofia yesterday. Greek businessmen are accompanying the country’s president Mr. Konstantinos Stefanopulos during his visit to Sofia. Mr. Kutzikos said that in his opinion, international rules were not observed in local competition and tenders for state projects. There are many cases in which Greek companies take part in procedures under the Public Procurements Act, and, though they have submitted the offers quoting the lowest possible price, which should be the main criterion in the final selection of the winner, they do not win. According to the chairman of the Greek chamber, another thing that stands in the way of investors, is the sale of products without invoices or any official documents, which causes losses both to the state and to the companies, experiencing the negative effects of the tax evasion scheme. Mr. Kotzikos pointed out that the Bulgarian government has been sent a list of 90 companies from the gray economy sector, which violate the law. Another thing which foreign companies find unpleasant here is the lack of clarity around the VAT payment and reimbursement procedures. The slow legislative system is also a problem – it takes between 3 and 5 years to settle a case. In connection with this matter, the Bulgarian Chamber of Commerce and Industry advised the Greek companies to always include an arbitrage clause in the contracts they sign, which means that in case of any arguments, they would be settled by the respective Arbitrage court, which usually takes less than a year. Mr. Kutzikos also emphasized the need to reduce social insurance fees, because they were an excessive burden to Greek investors – these fees are lower all over Europe. According to him, this can make Greek businessman operating in Bulgaria close their enterprises. A total of 50 Greek companies and non-government organizations took part in the forum, including Globul, Intracom, Motorolla, Ericsson (telecommunications), Karina (plastic tubes and fittings), Dromeas (furniture), Prometeus gas (natural gas and electricity), Shellman (wood production and processing), Trace Paper Mill (paper industry), Viohalco (processing of steel, copper and aluminum), Betanet (concrete, construction), Proekta (kitchen equipment, doors and wardrobes), Petsas (lady’s underwear), etc.
Source: Dnevnik (13.10.2004)

The company Chelopech Mining SP JSC is going to plant 20 000 trees of different varieties on the eastern platform of the Chelopech mine as a part of the project for recultivation of the lands, harmed by the company’s activity in the past. The previous stage of this project was the technical rehabilitaion.
Source: Dnevnik (14.10.2004)

Radomir Metals will form join-production with the Japanese Kobe Steel, chief executive officer, Plamen Bonev, said. Bulgarian enterprise will produce part of the cement industry machines ordered to the Japanese companies. Bulgarian and Japanese experts will share experience.
Source: Pari (14.10.2004)

A subsidiary of the world’s largest steel-maker, Arcelor, is going to invest EUR 15 million in a Czech Republic-based plant, making steel pipes for exhaust systems, as a part of its strategy to consolidate its positions on the global market of such products. Arcelor has already invested in this industry in the Czech Republic and Slovakia.
Source: Pari (14.10.2004)

After Monday, when non-ferrous metals reached new many-year price records, they underwent massive sells-off, seeking fast profit. As a result they retreated significantly from the highs. Three-month copper futures for instance went down by more than USD 222, or 7 percent, from the 16-year high of 3177.50 USD/t. Aluminum crashed down under 1700 USD/t after Tuesday trade at 1830 USD/t. Increase in exchange inventories by 17 000 tons hurt the price of the metal. Nickel fell by 11 percent or 1750 USD/t down to 14 150 USD/t. Lead went down to 927-932 USD/t versus 965 USD/t, and zinc – down to 1130-35 USD/t versus 1157 USD/ò.
Source: Pari (14.10.2004)

Economist Intelligence Unit /EIU/, the business information arm of The Economist Group, announced its latest metal market forecast. As it says, after this year’s crash of copper inventories to a critical level, prices in 2005 will go up. But as production is going to rise, inventories will run the same course. Despite the efforts for cooling China’s economy, demand for aluminum will not shrink, and prices will keep steady, at an average of 1683 USD/t next year, and in 2006 are likely to be higher. Increase in lead production and import will facilitate the shortage in western countries to be overcome and in 2006 prices will be at 30.1 USD/lb. In the next two years demand for zinc will outrun supply, and in 2006 prices will reach 57.5 USD/lb.
Source: Pari (14.10.2004)

Russia's largest and most ambitious steelmaker has emerged as a potential buyer of Stelco Inc., the insolvent steel company that has put itself on the auction block. Executives of OAO Severstal have held conversations with top Stelco management and made their takeover intentions clear, industry sources said. Severstal, controlled by Alexei Mordashov, Russia's top steel magnate and one of the world's richest men, has been making foreign acquisitions and recently stated its desire to enter the ranks of the world's top five or six steelmakers. Stelco would not comment on possible bidders. Hap Stephen, Stelco's chief restructuring officer, said only that "we've been approached by various people." Courtney Pratt, Stelco CEO, said he would not confirm or deny approaches by Severstal executives. Mr. Mordashov, Severstal's 38-year-old chairman, is considered one of the global steel industry's most aggressive executives. He is one of the 20 or so Russian oligarchs, some of whom made great fortunes in the Russian industrial-privatization effort of the 1990s. Mr. Mordashov has been critical of attacks on the oligarchs under the government of Russian President Vladimir Putin. Last year, he said "it's not good for the business climate here," referring to the arrest of fellow billionaire Mikhail Khodorkovsky, former CEO of the Yukos oil company. Hamilton-based Stelco has been in bankruptcy protection since January. Steel prices have since soared, making it all but certain that buyers or investors will be found. Among potential investors is Deutsche Bank AG, one of the biggest owners of Stelco's bonds. A winning bid would mark the second blockbuster purchase of a Canadian industrial company by overseas names in recent weeks. This month, China Minmetals, a trading arm of the Beijing government, entered exclusive negotiations to buy smelting and mining giant Noranda Inc. for about $7-billion (Canadian). Severstal has no investments in Canada but wants to make a splash in North America. In December, it bought a bankrupt U.S. industrial icon, Rouge Industries Inc. of Michigan, for about $285-million (U.S.). Rouge was built by Henry Ford and continues to supply automakers. In a recent interview with the Financial Times of London, Mr. Mordashov said: "I'd like to see a situation in the steel industry where, within a few years, four to six companies each had a capacity of about 100 million tonnes of steelmaking per year. We would like to be among those companies." Severstal is expected to produce about 12.5 million tonnes this year, making it about three times bigger than Stelco. A source said Stelco would be "pocket change" for Severstal, which last year reported a profit of $597-million on sales of $3.2-billion. Because it is in bankruptcy protection, Stelco's worth is unknown. A hedge-fund manager estimated the company's value range at $1.6-billion to $1.9-billion, based on its potential to make about $160-million a quarter as steel prices rise. Mr. Mordashov controls 83 per cent of Severstal's shares. According to Forbes magazine, that gives Mr. Mordashov a net worth of $4.5-billion, putting him at No. 136 among the world's richest people. He became chief financial officer of Severstal (Russian for "north steel") in 1992. Soon after, he and his allies gained control when the company was privatized. He has transformed Severstal, whose predecessor was created under the orders of Josef Stalin in 1940, into one of the most efficient and profitable steelmakers in the world.
Source: Other (14.10.2004)

London-based steel producer Ispat is close to an agreement for the purchase of Kremikovtzi, according to a publication on the Indian web-site Financial Express, quoting Bulgaria’s ambassador to India Mr. Dragovest Goranov. India’s Global Infrastructure Holding (a subsidiary of Ispat) is leading negotiations with Kremikovtzi. According to Mr. Goranov, negotiations are already in their final stage. Global Infrastructure is planning to invest over EUR 300 mln in its potential Bulgarian unit. The plant revealed information about the talks a couple of months ago. However, its management claims they are not discussing selling shares from the plant. The subject of the negotiations is possible joint management.
Source: Standart (15.10.2004)

The conclusions made by Kremikovtzi’s inspector – KPMG Bulgaria, are to come out soon, according to a report brought in Parliament by Bulgaria’s deputy prime minister Ms. Lidia Shuleva and minister of finance Mr. Milen Velchev. The report has been prepared referring a Parliament decision from late June, obliging to Government to check the actual state of the plant. The court has distrained 227 real estate properties of the company, including lands, apartments and holiday facilities, as well as 21 luxurious limousines, office equipment, and furniture. All of Kremikovtzi’s bank accounts in Biochim, Bank DSK, FIIB, and UBB have also been attached, the report reads. Currently, procedures for the sale of a number of the holiday facilities, owned by the plant, is being prepared. 71 per cent of Kremikovtzi’s shares have been blocked by the court in favour of the Post-privatization Control Agency, because Kremikovtzi’s buyer – Finmetals Holding, owes over USD 100 mln worth of investments and defaults. Finmetals has been leading active negotiations with India’s ISPAT (the world’s second largest steel producer), but share sale is not being discussed as yet. The plant owes over BGN 5 mln to the National Social Security Institute, as well as another BGN 37 mln, which have been extended until 2006. The company’s debts to the Customs agency are in the amount of BGN 72 mln, and to the former Fund for Reconstruction and Development – USD 44 mln, which have also been extended, but their deferred payment has already commenced.
Source: Sega (15.10.2004)

The executive director of Stomana-Pernik Eng. Spas Hristov will be brought to court today based on accusations of deliberately acting against the company’s interests and signing deals which were not in the interest of the enterprise, Mr. Emil Vladimirov – prosecutor, announced. Mr. Hristov is the third director of the metallurgical plant, against whom charges of service crime had been brought, BTA reminded. According to the prosecutor’s office, Mr. Spas Hristov has caused to the company losses amounting to over BGN 27 000, BGN 4500 of which have been paid in the form of fees for a lawyer in Sofia, who was at the same time paid a regular monthly salary of BGN 1000. The remaining part of the losses came from the stopping of the repayment of Stomana’s debt to another company. After paying the principal, Mr. Hristov personally decided to terminate the repayment of the remaining BGN 22 787 interests. The money was supposed to be used for the financing of the company’s rehabilitation plan, as well as for the covering of a part of the social security payments of the workers.
Source: Sega (18.10.2004)

The integration of Cyprus in the European Union has led to a drastic increase in production prices and the same can be anticipated in Bulgaria, said Teodoros Haralambos, honourable president of the International Organisation of Hotel Owners. He is taking part in a business forum in Pravets, organised by the National Business Network (NBN). Locally produced goods and services are currently much more expensive in Cyprus than those imported from EU member states, Haralambos explained. In order to survive, small and medium-size enterprises must carry out joint production with large companies, from which they can receive modern technology, advised Haralambos. Over 1,000 small and medium enterprises in the country are members of the NBN, which will organise management training courses with experts from France, Greece and Cyprus.
Source: Pari (18.10.2004)

Posco, the world’s fifth-biggest steelmaker, will invest $6.2bn to build a joint venture steel plant in India with BHP Billiton, the Anglo-Australian miner. The South Korean company will fund three-quarters of the $8.4bn project in the eastern state of Orissa, home to a large chunk of India’s 13m tonnes of iron-ore deposits. The remaining $2.2bn will be spent on mining and related facilities. The Orissa project will begin with a $3bn plant with the capacity to produce 3m tones of steel. Production is likely to begin at the end of 2009.
Source: Other (19.10.2004)

The Bulgarian Industrial Capital Association (BICA) will join Bulgaria's National Council on Tripartite Cooperation (NCTC) because it meets the requirements for a nationally represented employers' organisation, deputy labour minister Valeri Apostolov said on Tuesday. Some 800 big and medium-sized companies and holdings with a total of 70,000 workers are BICA members. Membership in NCTC ensures participation in the negotiations on the government social and income policies.
Source: Dnevnik (20.10.2004)

Viohalco will open a company for the production of photovoltaic modules, called Energy Solution, at the premises of Stomana Industry. Viohalco has invested EUR 600,000 in the purchase of the production line and EUR 100,000 in the upgrade of the building where the line will be installed. The line will be in Bulgaria by November 2004 and will start operating by February 2005. The first photovoltaic modules produced by the company will be exported to the European Union. The company will be the first enterprise for the production of clean energy using solar power on the Balkan Peninsula. The solar panels will be made from special glass with 87% to 98% light permeability and a special covering preventing light reflection. The panels generate 120V to 200V of electricity. The solar panels have an operating life of 25 to 30 years. A total 40 sq m of solar panels can meet the power needs of an average family. The solar technology is new for the Balkans, but is is well know in countries like Germany, Japan, Italy and Luxembourg.
Source: Pari (21.10.2004)

A company for production of photovoltaic modules will start working at the site of the metallurgical company Stomana Industry in Pernik. It will make panels, which transform sunlight into electric power, Mr. Alexander Zahario, CEO of the Greek company Energy Solutions, which is carrying out the project, said. The company is the first and the only one on the Balkan Peninsula. Output is initially intended to be exported to Germany. The Greek company Viohalco, majority owner of Stomana Industry, has invested EUR 600,000 in the project.
Source: Standart (21.10.2004)

Pernik-based Energy Solutions is to invest over EUR 600 000 in a flow line for production of panels, which turn sun energy into electricity. The new company will be built on the grounds of the Pernik-based metallurgical company, Energy Solutions’ CEO Mr. Alexander Zchario, announced. Production will be chiefly destined for exports, the biggest destination being Germany. Operations are expected to start in the end of January. The modules will accumulate the sun energy and turn it into electricity through converters. The annual production output is expected to be 4500 sq.m. of panels.
Source: Dnevnik (21.10.2004)

Arcelor is interested in the privatization bid of Eregli Iron and Steel Factories Inc. of Turkey,Guy Dolle, head of the firm said on Wednesday. Turkish Prime Minister Recep Tayyip Erdogan, who is currently paying a visit to French capital of Paris, met Dolle. After the meeting, Dolle told a correspondent that they had been investing in Turkey for the last 15 years, and said that they wanted to increase their investments. Noting that they were interested in privatization bid of Turkish 'Eregli Iron and Steel Factories Inc.', Dolle stated that he expressed his views about this matter during his meeting with Erdogan. 'Arcelor' is among the most important groups in the world with its 40 million tons of annual steel production. Turkey’s privatisation agency may decide by early in 2005 how to dispose of its 46% shareholding in Erdemir. They could sell shares on the stock exchange, or combine a public offering and bring in a strategic investor.This year, Erdemir is likely to beat , their earlier record production figures of 2003. Net profits were already 183m US$ for the first 6 months of 2004, in comparison with 236m US$, for the total year 2003. Erdemir's production for the first 6 months of 2004 reached 2.400 KT, while in the total year 2003 they produced 3.500 KT.
Source: Other (21.10.2004)

The Association of Industrial Capital in Bulgaria was recognised as a representative employers' organisation on a national level by cabinet decision Thursday. The association meets the criteria for representation. According to the Labour Code, organisations shall have at least 500 members, each of them employing 20 or more workers. The cabinet's decision increases the number of employers' organisations in the Council on Tripartite Cooperation to six. Other members include the Bulgarian Chamber of Commerce and Industry, the Bulgarian Industrial Association, the Union of Employers in Bulgaria, the Union for Economic Enterprise and Bulgarian Union for Private Enterprise Vazrazhdane.
Source: Pari (22.10.2004)

Ispat International will buy LNM Holdings and International Steel Group Inc., forming the world’s largest steel firm in a deal worth a total of $17.8billion, the company said on Monday. The new combined company – Mittal Steel Co., will have proforma revenues in 2004 of $30 billion, Ispat said, and an annual production capacity of 70 million tonnes. It will have operations in 14 countries and employ 165,000 people.
Source: Other (25.10.2004)

InvestBulgaria Agency (IBA) expects that the amount of the direct foreign investments will overrun USD 3 bln by the end of the year 2004, the agency’s CEO Mr. Pavel Ezekiev announced to journalists. As a reason for actualizing this forecast Mr. Ezekiev pointed the new investments data running for some EUR 2.5 billion that are added to the first half data – USD 1 bln. The main items in the IBA’s forecast are the revenues from the privatization of the electricity distribution companies that are some EUR 580 mln. Over EUR 50 mln are expected from the Bulgarian Telecommunication Company (BTC) deal and some EUR 200 mln – from other investment projects by the end of the year, including those of Sokotab, Liebher, Lukoil, Shishe Djam, Metro, and the newest Lindner holding’s investment in extension of Sofia Business Park, Mr. Ezekiev siad. The IBA’s CEO announced that within 3 months five investment intermediaries are to be appointed abroad. Three of them will be in Northern Europe countries, one in the USA, and one in Japan. The resources for their living means are stipulated in the budget, Mr. Ezekiev added.
Source: BTA (26.10.2004)

Metalsnab Holding expects a profit of BGN 1.2 million for 2004, while the revenue is forecast to reach BGN 60 million. Company's sales almost doubled in comparison to 1998. Metalsnab will launch its new BGN 1.75 million production unit for pipe-lines on October 29. The plant has a production capacity of BGN 12 million a year worth of 10,000 tonnes. A total of 40% of the production will be exported. New 32 jobs will be opened. Metalsnab was privatised in 1998 and now is 99% privately owned. Kloekner&Co-Germany is one of the shareholders. Since the company sell-off, a total of BGN 6.5 million has been invested in restructuring and modernisation, information technologies and production capacity increase. Metalsnab has also acquired ISO 9001:2000 quality management certificate and has been awarded a credit rating of BBB.
Source: Pari (26.10.2004)

The loss of Bulgaria's OTsK of Kardjali for the first nine months of 2004 has declined to BGN 3.9 million from BGN 7.9 million a year earlier, the balance sheet of the lead-and-zinc smelter shows. The net sales receipts have grown 81% to BGN 50 million. For the third quarter of 2003 sales revenue stood at BGN 28 million. The first-half loss of the enterprise amounted to BGN 2.2 million, more than twice down on the year-ago period, when its totalled BGN 5.7 million. For the whole year 2003 OTsK posted a loss of BGN 7 million.
Source: Pari (26.10.2004)

Minister of Environment and Waters Ms. Dolores Arsenova is going to visit the Umicore Med plant in Pirdop, where she will be introduced to the successful finishing of the environment recovery programme, which was implemented in the company in partnership with the Ministry of Environment and Waters, Privatization Agency, World Bank, National Trust Ecofund, and the Umicore group.
Source: Darik Radio (26.10.2004)

The Government passed the budget 2005 with a VAT rate laid in it at 20 percent at its extraordinary meeting yesterday. The Parliament is to assess definitively the VAT rate for 2005, the financial minister Mr. Milen Velchev said. The opposition insisted that the VAT rate became 18 percent. Losses from decrease of VAT revenues would be BGN 420 mln, commented the financial minister.
Source: Sega (26.10.2004)

Africa's largest steel maker, Ispat Iscor, will become part of the world number one steel producer after its controlling shareholder, LNM Group, announced yesterday that it would merge with its subsidiary, Ispat International. Ispat International's simultaneous $4,5bn acquisition of the US's International Steel Group yesterday helped catapult the former number two group to the top spot. The merged entity, Mittal Steel, with an estimated $30bn in annual revenues, will be listed on the New York Stock Exchange and Euronext Amsterdam. Analysts said yesterday this might mean Ispat Iscor would have to up the ante in terms of disclosure and transparency in line with strict New York Stock Exchange standards. Consumers have called on the local steel maker for some time to become more transparent, particularly in terms of its pricing. Ispat Iscor declined to comment on the prospects of increased disclosure. The company said the formation of Mittal Steel would not have a direct effect on Ispat Iscor.
Source: Other (26.10.2004)

Copper conglomerate KGHM Polska Miedz and Chinese holding MINMETALS signed a $120 million contract in Beijing yesterday to deliver 40,000 tonnes of copper to the Far East in 2005. The deal is the first phase of an agreement drawn up in July this year concerning the sale of 300,000 tonnes of cooper to China, worth $900 million, before 2010. The two companies are also conducting negotiations related to investment cooperation in a number of other markets, including mining copper in Congo. "China is the largest and the most important of our foreign clients. This contract is a milestone in our cooperation and at the same time it is clearing the path for other Polish firms willing to invest in that country," said KGHM president Wiktor Bladek. President of MINMETALS Miao Gengsu proposed establishing an association of Polish and Chinese entrepreneurs willing to support economic relations. (Rzeczpospolita, p. B4) M.M. (èçòî÷íèê: Warsaw Business Journal)
Source: Darik Radio (26.10.2004)

Roman Abramovich, the Russian billionaire, has completed his exit from the Russian aluminium giant RusAl by selling his remaining 25% stake to fellow oligarch Oleg Deripaska for a reported USD 2bn (GBP 1.1bn). Basic Element, the company that Mr Deripaska controls, said "negotiations over the acquisition of 25% of the shares of Russian Aluminium have been completed". It said the purchase had been made from the main shareholders of Rusal and that Basic Element now owned 100% of the shares in RusAl. Russian Aluminium is based in Moscow. It accounts for three-quarters of Russia's primary aluminium production and a tenth of global output.
Source: Other (26.10.2004)

Ministry of finance is planning to establish a guarantee fund with a capital of BGN 40 mln, which is 7-8 times bigger than the capital of the Innovation fund (BGN 5 mln), Mr. Stanimir Barzashki, chairman of the Agency for Encouragement of Small and Medium-sized Enterprises, said at a Bulgarian-German seminar, held yesterday, adding it was too early to make any comments. Mr. Barzashki only explained that according to plan, the money for the project will be provided by the state budget, though things have not been quite cleared out as yet.
Source: Monitor (27.10.2004)

Bulgaria’s Minister of Environment and Waters Ms. Dolores Arsenova went on a short visit in Pirdop-based Umicore Med JSC yesterday. She visited the copper producing enterprise in relation to the International Cooperation for Stable Development award, granted to the Umicore group by the Belgian government. The company received this award for the successful implementation of its environment rehabilitation programme. Some of the other guests of the event were the ambassador of Belgium to Bulgaria Mr. Philip Beke; Oscar de Brun Kops and Mr. Georgi Kurtev from the Worldbank, the director of the National Trust Ecofund Mr. Dimitar Nedkov, Ms. Veska Georgieva from The Regional Inspection of Environment and Waters – Sofia, and Ms. Atanaska Bozova from the Post-privatization Control Agency.
Source: Trud (27.10.2004)

The monthly environment pollution fine, imposed on Kremikovtzi to be raised fourfold – from BGN 17 500 to BGN 70 000, Sofia’s ecological inspection proposed to Minister of ecology Ms. Dolores Arsenova. Within 2 weeks, a decision is expected as to whether the sanctions should be raised, the ministry explained. Kremikovtzi has been imposed a BGN 18 000 monthly fine for throwing away the polluted waters from its production. About noon on Monday, the Sofiisko pole was covered in thick red smoke. The houses near the plant and the slopes of the mountain could hardly be seen through the thick dust. “These are iron dust particles, which are released by Kremikovtzi’s furnances,” the director of the Air control department Ms. Veska Georgieva explained. Exactly how many times their concentration exceeded the set limits will become clear on November 1, when the results from the manual tests come out. According to the measurements made within the period June 23 – July 20, the level of dust was 3 to 6 times higher than the limits. The measurement station in Gara Yana showed 1.8 – 5 times higher than normal levels of hydrogen sulphide. “The plant’s production capacities are in a bad condition. Their maintenance is not at the necessary level and the harmful emissions are not being controlled”, Ms. Georgieva stated. According to her, the management of Kremikovtzi is not willing to solve the environment pollution problem. The fines imposed on the plant were not of any great help either. Following Trud’s signal, the plant’s management ordered a probe and cleaning of the facilities. Kremikovtzi is not paying its pollution fines. In order to collect the money, Ministry of environment asked the State Receivables Collection Agency for help. Following the agency’s intervention, some BGN 600 000 were paid. According to data provided by Ministry of ecology, the plant owes another BGN 728 000 in the form of fines. Kremikovtzi also has BGN 3.5 mln debts to the state from credits. The money has been granted by ministry of ecology in the form of interest-free credit for the building of purifying facilities over the period 1997-1998.
Source: Trud (27.10.2004)

Local profit tax will be cut from the current 19.5 to 15 percent as of 2005, Parliament decided yesterday voting the amendments in the Corporate Income Taxation Act proposed by the Council of Ministers. The Cabinet suggests increasing the amortization norm of the new machines and production equipment from 30 to 50 percent. The taxation rates for social and representative expenditures, as well as the donations will be reduced from 20 to 17 percent.
Source: Pari (28.10.2004)

Steel prices have increased sharply for the past 2 years, due to growing global demand, especially Chinese. The favourable market situation at the moment explains the trend of consolidation currently observed in the world metallurgical industry. Because of the cyclical development of economy, the drop in the metallurgical sector is unavoidable, therefore world producers are trying to consolidate before the expected period of recession. The intention of Germany’s ThyssenKrupp to expand its production, which was stated in early October, comes to prove this fact. At the moment, the German concern its actively searching for a European company with similar profile, with which it could merge. Although there are still no official agreements, the market is expecting the merger between ThyssenKrupp and the British-Dutch steel producer Corus. Western analysts expect the new joint venture to produce some 36 mln t of steel annually – a result, which would make it the world’s third biggest steel company. What is going on in Russia – a traditional world leader in the sector? Local companies are trying to keep up with their western rivals. Almost all major Russian companies are planning to increase their production overseas. In the middle of this month it emerged that the management of Severstal is leading unofficial negotiations with the management of Canada’s Stelco over a possible merger. Severstal is by far not the only Russian enterprise, intending to gain foreign assets. Evrazholding was interested in acquiring Ukraine’s Krivorojstal. In August, Severstal stated its intention to take part in the auction for the sale of Czech’s metallurgical plant Vitkovice. A bit earlier, the holding tried to purchase Krivorojstal, and in 2003 it came in possession of US-registered Rouge Industries Inc. In the spring of 2004, Evrazholding took part in the auction for the sale of the bankrupt South Korean steel producers Hanbo Iron&Steel Co. Recently, the management announced the company’s intentions to step on the market in Southeastern Asia in the near future. Mechel is also buying foreign assets. It already acquired a plant in Croatia (though later forced to sell it). Nevertheless, the company owns 2 plants in Romania and 1 in Lithuania. Market observers, however, think that such large-scale mergers, as the ones happening in the western world, are steel a dream for Russia’s metallurgical industry.
Source: Pari (28.10.2004)

Uzmetkombinat, Uzbekistan's only steel mill, smelted 428,540 tonnes of steel in the first nine months of 2004, up 17% year-on-year. The company told Interfax it increased roll production 16.9% to 402,410 tonnes, including 301,200 tonnes of value-added products, up 20.4%. Uzmetkombinat smelts scrap metal. It has the capacity to produce 750,000 tonnes of crude steel per year. The company produced 446,521 tonnes of roll and exported 180,700 tonnes in 2003.
Source: Other (28.10.2004)

Denmark's Ib Andresen Industri (IAI) A/S plans to build a steel processing plant in Gonyu, near the western Hungarian industrial town of Gyor, co-owner Tom Andresen told the daily Napi Gazdasag. The investment is expected to cost some EUR 15-20 million, and will get underway in 2005. The factory will eventually employ 60 workers. With annual capacity of 100,000-150,000 tons, the facility will mainly supply Slovakian partners, mostly in the automotive and household appliance industries. The company chose the Gonyu site due to its proximity to the Danube and the M1 motorway, Andresen said, adding that IAI will finance the investment partly from its own resources and partly from loans.
Source: Other (28.10.2004)

Two of the biggest US steel firms reported dramatic third-quarter turnaround on Tuesday, with robust profits driven by surging steel prices reversing year-earlier losses. Both United States Steel Corp and AK Steel Holding Corp reported earnings well above Wall Street estimates in a sign that the industry is hot, especially with Chinese demand keeping steel prices sky-high. The positive results came a day after the Netherlands-based Ispat International said it would form the world's largest steel company, by acquiring US steelmaker International Steel Group Inc. “Things are very robust, and although prices are off a little, it's like going from extraordinary to incredible,” said steel analyst Michelle Applebaum. “So far, the results look good, everyone has been better than expected or in line with estimates,” she added, referring to the other American giant, Nucor Corp, which last week reported a 25-fold surge in profit. US Steel's net earnings were US$354mil, or US$2.72 a share, compared with a loss of US$354mil, or US$3.47 a share, last year, when it recorded charges related to job cuts. Analysts, on average, expected a profit of US$2.06 per share, according to Reuters Estimates. Revenue rose more than 7% to US$3.73bil. AK Steel, which makes flat-rolled carbon, stainless and electrical steel products, said earnings were US$83.1mil, or 76 cents per share, after a loss of US$277.5mil, or US$2.56 a share, in the 2003 third quarter. Riding the roaring prices, AK Steel's sales rose to a record US$1.24bil on shipments of 1,541,800 tonnes, versus sales of US$1.02bil on shipments of about 1.5 million tonnes. Lawrence Creatura, portfolio manager at Clover Capital Management, which owns AK Steel stock, said the numbers were “fantastically good, higher than expected”. Referring to the Ispat-ISG deal, he said the industry was emerging from a dark period. “Now we see consolidation improving the climate.”
Source: Other (28.10.2004)

The businessman of Indian origin Mr. Lakshmi Mittal on Monday announced a two-level deal, which will result in the establishment of the world’s biggest steel company. According to Mr. Mittal’s plan, LNM Group (the world’s second largest steel producer) will be united with his two leading departments – Ispat International NV and LNM Holdings NV, after which it will acquire US-registered International Steel Group (ISG), headquartered in Ohio. The new company will have an annual production capacity of 70 mln tons of steel, and its 2003 revenues are expected to reach SUD 30 bln. The giant will operate a number of plants in 14 countries and will employ some 160 000 people. The first part of the deal – the merger between Ispat International and LNM Holdings, should be finalized by the end of the year, and their merger with the US company is due to end by the end of 2005 first quarter. The new company will be called Mittal Steel Company NV (after the owner of the controlling stake in Ispat International and LNM Holdings). The Mittal family will share the ownership in the new venture, as follows: Mr. Lakshmi Mittal, who is 100-per cent owner of LNM Group, and chairman and CEO of Ispat, will keep the same posts in the new giant company. His son – Mr. Aditia Mittal, will be president of the new formation (previously he acted as chairman of LNM Holdings). ISG’s owner Mr. Wilbur Ross will take a post in the company’s board of directors. Prior the deal, LNM Group used to be the world’s second biggest steel maker, operating assets in 14 countries and realizing annual incomes of some USD 12 bln. Last year, after buying a number of metallurgical plants in Poland, Czech Republic, Bosnia and Herzigovina, Romania and Macedonia, it became Eastern Europe’s No. 1 steel producer. In the course of the operation, Ispat International is to pay some SUD 13.3 bln for LNM Holdings in the form of own shares. ISG investors will be offered a price of USD 42 per share, e.g. a total of some USD 4.5 bln. According to the terms of the deal, Ispat will issue 525 mln new shares in order to acquire LNM Holdings. The issue will include around 140 mln shares of class A and almost 385 mln of class B. When the deal is finalized, Ispat’s shareholders will own around 18.3 per cent of the new company, and LNM Holdings’ shareholders – almost 81.7 per cent. Ispat International Has operations in 6 countries in North America, including USA, as well as Eastern Europe. Its annual steel production output exceeds 18 mln tons, and its revenues in 2004 hit USD 8.3 bln. On Monday, when the formation of the wold’s new number 1 company was officially announced, Ispat International reported a profit for this year’s third quarter in the amount of USD 460 mln, compared with a loss of USD 10 mln y/y. Ispat’s sales grew with some 90 per cent reaching USD 2.46 bln, compared with USD 1.29 bln a year earlier. LNM Holdings Is one of the world’s biggest steel companies. Its 2004 annual revenues are expected to reach USD 9.9 bln, and its annual steel production output – 32 mln tons. Besides, it disposes of significant raw material inventories, which allows it to produce almost 18 mln iron ore, 13 miln coke and 12 mln coal annually. The company operates plants in Europe, Africa, Asia. Isg Is North America’s top steel producer, registering annual production output of 20 mln t. Its 2004 incomes are expected to reach USD 9 bln. ISG’s acquisition should be approved by the two companies’ shareholders and by the regulative authorities. On Monday, ISG reported a third quarter profit of USD 256.4 mln or USD 2.51 per share, and revenues of USD 2.61 bln. In the spring of 2003, ISG acquired US-registered Bethlehem Steel Corp., and in May 2004 – Weirton Steel, as well as a part of the assets of Georgetown Steel Co. Despite the impressive merger deal, the big boss Lakshmi Mittal thinks that there are still more opportunities for further consolidation in the sector, and he is planning to continue looking for more suitable facilities to join the Mittal Steel empire. Who is Kremikovtzi’s buyer? Ispat Industries is a separate Indian company, owned by the two younger brothers of Lakshmi Mital – Pramod and Vinod Mittal. The company, or to be precise its subsidiary GIH, are interested in buying Kremikovtzi. Ispat Industries has nothing in common with Ispat International, which is a part of the new giant, formed by India’s richest man, who lives in Great Britain – Lakshmi Mittal. There are rumours in the international business circles that the relationships between the three brothers are not so good. The family has been involved in the steel industry since 1952. The first member of the family to penetrate this business is the father of the three brothers. Back then, he bought a metallurgical plant in Kalkuta, back in India. More than 20 years later, he also bought a plant in Indonesia – PT Ispat Indo, which he renamed to Ispat Group. Later on, the company expanded its operations and stepped on the markets of North America and Europe, where it operates plants in Germany and Ireland. Exactly 10 years ago, the family company Ispat Group split up. Lakshmi Mittal became responsible of the international operations, while his younger brothers took up the steel business in India exactly through Ispat Industries. According to the latest information available, Ispat International produces some 2-54 mln t of steel annually in India. Top 10 steel companies before the establishment of Mittal Steel (2004 – forecast production output) Company State Annual production output (in mln tons) 1. Arcelor Luxembourg 43 2. LNM Netherlands 41 3. POSCO South Korea 32 4. Nippon Steel Japan 30 5. JFE Japan 30 6. Nucor USA 20 7. US Steel USA 20 8. Bao Steel China 20 9. ThussenKrupp Germany 20 10. Corus Great Britain/ Netherlands 10 Total production by world top 10 companies – 277 Total world production – 1000.
Source: Pari (28.10.2004)

Metalsnab Holding has managed to double its profit since 1998, the company announced at the opening of the new production line for gas-main and profile pipes. This year, the company expects its revenues to reach BGN 60 mln, and the profit to hit BGN 1.2 mln. In 1998, Metalsnab Holding became 99-per cent privately owned. The majority shareholders in the company are Germany’s Klockner & Co. and Greek-registered Viohalco. So far, nearly BGN 7 mln have been invested in the reconstruction and modernization of the internal infrastructure of the enterprise. Metalsnab Holding operates a total of 14 companies and five joint ventures with foreign shareholdings.
Source: Monitor (30.10.2004)

Production orders in Bulgaria have increased between July and October 2004, data of the National Statistical Institute show. The average loading of production capacities have risen from 4.4 to 4.8 points and is now assessed at 63%. Idle capacities have decreased for the same period. This enhances companies' expectations for the last quarter of the year and they hope sales to rise. Optimism about more orders is also registered in the field of services, despite keener competition on the market, which is named as the main obstacle to development. Entrepreneurs say the economic situation in the country is relatively favourable. In relation to sales prices, industrial enterprises expect no increase. The economic situation in construction also remains favourable. The business climate indicator in the sector has risen 13.3 points in October, compared to September. The trend towards a rise in real estate prices, however, is preserved.
Source: Pari (01.11.2004)

Local construction company Ingtalant Ltd. has backed out of the two insolvency cases it filed against Sofia-based Kramikovtzi in a bid to recover 400,000 levs from the debt-throttled steel plant. The two sides have settled out of court. A similar agreement convinced another Kremikovtzi creditor, Stroykomplekt, to drop in early September its own insolvency case against the metallurgical company. Kremikovtzi still faces two cases filed by creditors at the Sofia city court.
Source: Dnevnik (01.11.2004)

Despite economic growth, the increase in labour productivity is slowing down. This is due to the lack of innovations on a company level, the shortage of qualified workforce and the prevalence of low value added production, Bulgaria's Centre for Economic Development (CED) said in a report covering the second quarter of 2004. Between April and June productivity surged 2.3% on the year-ago period. Measured as a ratio between workforce and gross value added, the rate was lowest in agriculture: 1.4%. In the industrial sector, productivity increased 1.8%, while in the service sector it jumped by a total of 2.6%. The record high growth of 6% for the second quarter of the year and 5.3% for the first one is not sufficient, CED co-chairman Alexander Bozhkov said. According to him, if this rate is preserved Bulgaria will catch up with Europe in 40 years. Economic growth should be at least 8%, Bozhkov added. A generator of value added in the second quarter of 2004 was industry, which registered a rise by 7.6%. A certain slow-down was observed in end-consumption: 4.2% for the second quarter compared to 5.2% in January-March. The main reason for this is the slower increase in individual consumption. This shows that most of the imports are not used for individual consumption but for enhancing companies' capacity, CED programme director Ivaylo Nikolov commented. The difficulty to find qualified workforce affects managers' investment plans, the research shows. According to July data, only 42% of the interviewed said they could easily find workers. Two years earlier, this opinion was shared by 60% of entrepreneurs.
Source: Pari (02.11.2004)

The syndic of the insolvent copper producer Eliseina SP JSC – Mr. Veselin Bankov, announced on November 11 public sale of property, owned by the company, located on Eliseina station. The sale will be held under art. 717 of the Commercial Act between 09:00 am and 16:20 pm in the company’s office. Those willing to see the property, consisting apartments, garages, and warehouses, can visit the place between 09:30 am and 14:30 pm every workday. Candidates should have paid a deposit in the amount of 10 pr cent of the evaluation of each separate position before the date of the auction (the money should be submitted in cash in the company’s cash office). Candidates should submitted their offers in sealed envelopes quoting the price they offer. The winner in the auction, e.g. the one who offered the highest price, should make the payment due within five days – no later tan 16:00 pm on November 16.
Source: Dnevnik (02.11.2004)

Russian steelmaker OAO Severstal, said first-half net income to international accounting standards more than doubled due to high metal prices and its acquisition of Dearborn-based Rouge Industries Inc. Profit rose to $598 million , compared with $282 million for the same period in 2003, Severstalsaid . Sales rose 73 percent to $2.5 billion. In January, Severstal bought Rouge, the largest steel supplier for Ford Motor Co., for $285.5 million and said it plans to raise production at the Dearborn-based plant to 4 million tons of steel a year.
Source: Other (02.11.2004)

Steelmaker Mechel became Russia's first metals firm to list on the New York Stock Exchange on Friday after it placed about 10 percent of its stock there at the top of the expected range. Mechel raised $291 million from the initial public offering, making it the second largest by a Russian company and values it at $2.9 billion. Russia's No. 5 steel producer, which already had a Moscow listing, said it placed 13.9 million shares in American Depositary Shares at $21 each. The price range was $19 to $21. The move comes at a time when many Russian firms, encouraged by strong growth on the local stock market and booming consumer demand, are looking to foreign listings or closer ties with Western firms to fund expansion. Mechel joined the club of at least six Russian companies - mainly telecoms - that trade on the NYSE. The company has an option to place additional shares and boost its liquidity, as it has approval from shareholders and Russia's market watchdog to have up to 40 percent of its stock trading abroad. Mechel officials, contacted in Moscow, would not comment on whether the company was considering such a move. Analysts said Mechel's decision would largely depend on the outcome of a long-delayed tender for a 17.8 percent stake in steel giant Magnitogorsk Iron and Steel Works, or MMK, expected later this year. Mechel owns 17 percent of MMK and is expected to bid. The government expects to raise up to $800 million in the tender. "If shareholders decide to raise additional money, they have a pool of shares they can use any time they like," said UralSib metals analyst Slava Smolyaninov. The NYSE placement underwriters, led by UBS Investment Bank, have an option to purchase an additional 6.2 million ADSs to cover any over-allotments. Mechel, set up last year to unite several plants in central Russia, includes Mechel Steel Mill, Russia's sixth largest steel plant and the group's biggest asset. Steel production at the mill, which also has assets in Eastern Europe, grew about 22 percent to 2.9 million tons in the first half of this year. Mechel, which has expanded production on strong Chinese demand, posted net income of $254.5 million under U.S. GAAP for the first half of 2004 - compared with $143.5 million for the whole of 2003.
Source: Other (02.11.2004)

Bulgaria's largest steel processing plant, Kremikovtsi, has drawn an ambitious business plan for 2005. The projection is for BGN 140 M (approx EUR 70) investments into the plant, and for a 10% increase of the average wage, from BGN 640 to 704. A notable part of the investments should be spent on projects for environmental protection.Kremikovtsi, situated just outside capital Sofia, has been partly blamed for atmosphere pollution in the area.
Source: Other (03.11.2004)

Belarusian Metallurgic Plant (BMZ, the town of Zhlobin, Gomel region) in January-October 2004 raised steel production by 18.2% up on the year to 1,527.3 tons. Besides, over the ten months of the year the plant turned out 1,346,900 tons of rolled metal (15.5% up), 155,100 tons of hardware (23.7% up), and 66,100 tons of metal cord (25.9% up). In January-September 2004 the company's output in comparable prices made BYR 1.116 trillion or 22.2% as compared with the same period last year. Belarusian Metallurgic Plant, the largest Belarusian steel mill, was commissioned in 1984. Now it employs around 15,000 people. The company specialises in various metal ware such as cast intermediates, shaped iron, profiled and reinforcement metal, metal cord, and other types of wire.The company buys feedstock in Belarus and the CIS countries.
Source: Other (03.11.2004)

Bulgarian metallurgical plant Kremikovtzi AD will ingest investments worth some 140 mln levs next year, including 33 mln levs earmarked for environmental retrofitting, says the business plan of the Sofia-based company made public on Wednesday. The indebted steel plant has allocated 95 mln levs for the repayment of rescheduled liabilities while another 59 mln levs have been allotted for repairs. The management is betting output will catch tailwind from surging global steel prices and rise by 25% in 2005. The biggest output upside is seen in the production of cold-rolled coils and full-hard. The 2005 launch of the continuous casting complex is expected to boost productivity. The overhaul of the aspiration filters of technological electro-filter no.5 at the Sinter Plant will reduce harmful emissions in the ambient air. The technological improvements are expected to lift profits to some 100 mln levs in 2005. The Indian press reported in early September that Global Infrastructure Holdings Ltd, controlled by the Mittal family, was set to acquire a majority stake in the Bulgarian metals firm but there is still no information on the progress of the talks with Finmetals Holding which owns 71% of Kremikovtzi.
Source: Dnevnik (04.11.2004)

KOREAN steel major Posco may reconsider its decision of setting up a 10-million tonnes (mt) per annum steel plant in Orissa, if the State Government further delays in giving the necessary clearances. This was stated by Mr Chang-Oh Kang, President of Posco, after addressing the Metals 2004 seminar organised by the Bengal Chamber of Commerce and Industry here on Thursday. Mr Kang said that the Orissa Government had set up a special working group, which is currently studying Posco's investment proposal. "However, we are yet to hear anything from the Orissa Government," Mr Kang told reporters on the sidelines of the seminar. When asked whether Posco would consider shifting the project from Orissa in case of an inordinate delay, Mr Kang said: "Let's see how things progress. We will think about a second line of action only if the talks fail." The Korean steel major, which is the fifth largest steel producer in the world, may consider setting up its proposed steel plant in any other State, which is rich in iron ore and coal, if Orissa fails to provide the required infrastructure for the plant. Industry sources said that if Orissa failed to strike a deal with Posco, then West Bengal would possibly be their second preferred location. "The West Bengal Government is closely following the developments and they may pitch in, once situation become favourable for the Koreans," the sources said. Four months ago, Posco had written a letter to the Orissa Government expressing its interest in developing mining facilities and setting up a steel plant. It has already tied up with the Australian major BHP-Billiton for the project. Initially, the Korean company had planned to set up a 3-mt plant, but later the capacity was raised to 10 mt. The total investment in the project would be $8.4 billion. Posco was established in 1968 and privatised in 2000. Its total crude steel production is 30 mt.
Source: Other (04.11.2004)

Metallurgical plants in Bulgaria need some BGN 1 billion to meet the environmental requirements agreed with the European Union, Kremikovtsi CEO Mr. Valentin Zahariev said. The problem is quite serious, because the enterprises in the sectors were build 50 or 60 years ago and the equipment is outdated, commented Mr. Nikolay Konarev, CEO of KTsM of Plovdiv. The non-ferrous smelter has so far invested more than USD 100 million in environment projects. The amount has to be returned in the next 20 years and to meet Europe's requirements we have to invest about as much, which we simply cannot do at present, Mr. Konarev added. The Bulgarian government did not agree grace periods for most of the enterprises in the heavy industry, said Mr. Georgi Nikolov, head of Umicore Med of Pirdop. According to him, the remaining two years until accession is too short a period to cover the criteria and many companies will be forced to close down. So far no companies have been liquidated in the sector, the Chamber of Ferrous and Non-ferrous Metallurgy said. Having passed into private hands, the enterprises are renewing technologies and equipment and carrying out important eco-projects. For the last three or four years alone investments in the sector have exceeded BGN 800 million. Import metals, however, are already displacing local production. For the first nine months of the year sales of Bulgarian metals have declined 45.5 per cent. Manufacturers are making up for that with exports, which have risen 31.8 per cent for January-September. Bulgaria exports some 80 per cent of its metal output. Ferrous and non-ferrous metal sales totalled BGN 2.560 billion in 2003, which accounted for 7.44 per cent of the country's GDP. Metal exports made up more than 16 per cent of the total export volume. Steel production increased 25.4 per cent, anode copper output rose 24 per cent.
Source: Pari (05.11.2004)

Bulgarian steel plant Promet Steel JSC, part of the international Steel Neva Consortium, said its output since the beginning of the year reached 251,000 tonnes, the company said. Nine tenths of the production was exported. the steel produced by the company is mostly directed to the American markets. Promet Steel expects the annual output for 2004 to reach 300,000 tonnes. The enterprise produced 128,000 tonnes of steel products in 2003.
Source: Pari (05.11.2004)

The income of Bulgaria's Stomana Industry for the first nine months of 2004 amount to BGN 350 million, increasing 56 per cent year on year, CEO Mr. Vladimir Nikolov said. The company has manufactured 570,000 tonnes of steel since the beginning of the year. The capacity of the enterprise is 1 million tonnes of steel, but it is closely related to the market. According to Stomana Industry's chief engineer, Dimitar Minchev, the share of alloyed steels has increased from 15 per cent last year to 45 per cent at present.
Source: Pari (05.11.2004)

Bulgarian metallurgic plants have exported production worth BGN 2.4 billion in 2003. It is a growth by 22.5 percent as against 2002, according to the statistical reports on the sector. Export of metals and raw materials is worth BGN 1.118 billion, which is a growth by 39.5 percent as against 2002, it was reported at a forum on the development of ferrous and non-ferrous metallurgies in line with the professional day of metallurgists. Top managers from the biggest plants here took part in the forum. 15.3 percent of the total of employees in this country work in the sector with monthly salary averaging BGN 700 or BGN 800, said Mr. Valentin Zakhariev, director of the Kremikovtsi smelter. Metallurgic plants need investments totaling BGN 1 billion to meet the EU ecological requirements. The plants have also to improve their working conditions. According to Mr. Zakhariev, most of the plants have already started implementing programmes to catch up with the Euro standards. In the wake of the privatization, the new owners have supplied the plants with equipment and have started ecologically friendly projects totaling BGN 800 million. A year prior to this country's EU accession, many of the companies will go insolvent as they will not afford the investments they have to make, well-informed maintain.
Source: Standart (05.11.2004)

Almost 75 per cent of metallurgical products sold on the domestic market come from import, the chairman of Branch Chamber of Ferrous and Non-ferrous Metallurgy and Kremikovtzi’s CEO Mr. Valentin Zahariev alarmed. Within the first half of the year alone, over 300 000 t of steel products were imported in Bulgaria. For some groups, imports over the review period exceeds imports for the whole year 2003, which is quite a paradox, according to the chairman of the chamber. The share of metallurgy in the country’s total exports in 2003 stood at 16.1%, registering a 23% increase y/y, Mr. Zahariev explained. Exports of ferrous metals has grown with some 28.6%, and that of non-ferrous metals – with 15.4%. As a result of this, Bulgaria’s metallurgical sector has posted a positive foreign trade balance of BGN 1.233 bln. The trend of growing exports continued this year, according to Kremikovtzi’s director. 80% of local production is exported, he added. Within the first six months of the year alone production of electrolyte copper has increased with 8.73 per cent compared with 2003, and zinc production – with 6.48 per cent. Despite the reduction in steel production, due to the stopping of one of Kremikovtzi’s blast furnaces, production of rolled metals posted a growth of 51.4 per cent for the first nine months of 2004, Mr. Zahariev added. Import of metals at dumping prices is the main reason for the current state of the domestic market. Our own production will take its deserved share of the local market only after we join EU, when the protection mechanisms of the Eurozone will become effective, Mr. Zahariev added.
Source: Monitor (05.11.2004)

The CEOs of Bulgaria's biggest ferrous and non-ferrous metallurgical companies are urging the government to flesh out a comprehensive policy for the development of the industry that would ease the transition to relevant EU standards. No one has bothered to compile supply and demand statistics for the metallurgical industry in the past decade, providing no long-term visibility to potential investors, Metalsnab Holding Alexander Kashukeev said on Thursday. The metallurgical companies have suggested that the ministries should get more involved in the government's industrial development policy-making and should assist local business in the search for new partners. The sector is facing domino-like bankruptcies unless a solution is found over the next two years for the shortage of eco funding, said the CEOs of non-ferrous company KCM, copper smelter Umicore and steel plant Kremikovtzi and representatives of Greece's Viohalco which three Bulgarian metallurgical plants. The compliance costs for Bulgaria's ferrous and non-ferrous companies is seen at 1 bln levs by 2007, the target year for EU accession. Plovdiv-based KCM has fallen back on 20-year credits to finance eco project worth $100 mln but will have to invest as much over the next two years to secure a permit for integrated pollution prevention and control granted, said KCM CEO Nikolai Konarev. The metallurgical companies are also unhappy with the failure of the government to negotiate enough transition periods for the domestic introduction of certain EU directives. Despite some rough patches, Bulgaria's metallurgical industry is the only sector of the economy to report no closure of enterprises in the past decade. The sector produces output for 2.5 bln levs annually and generates 16% of the nation's exports.
Source: Dnevnik (05.11.2004)

The memorandum for Bourgas-Alexandroupolis pipeline construction will be signed between Bulgaria, Russia and Greece in Sofia in December, minister of regional development, Valentin Tserovski, said. Last week experts from the three countries agreed in Athens the the document is to be ratified. The document reads that nobody will ask Russia to secure crude oil deliveries. The resource will be provided by the large crude oil companies that are active in Russia, Tserovski explained. The memorandum's target was to offer political support to the prospective project managing company so that it may easily acquire funds from international banking institutions. A tender will decide on which construction company will carry out the project. The enterprises to operate the constructed pipeline will also be selected through tenders. Last month, during the visit of the Russia's prime minister Michail Fradkov to Sofia, certain hints appeared that Moscow would be inclined to realise the project only if Russian companies were included in the construction of Bulgaria's second nuclear power plant in Belene. Bulgarian government then denied to give any guarantees on the issue.
Source: Pari (08.11.2004)

Steelmet JSC, one of Bulgaria's biggest manufacturers of aluminium sections and architectural systems, intends to spend EUR 9 mln next year to modernise production and double output to 20,000 tons annually. The '05 investment will bring to EUR 25 mln the overall tally of funds injected in the aluminium plant by its owner, a subsidiary of Greek consortium Viohalco.
Source: Dnevnik (08.11.2004)

Steelmet's majority owner ETEM plans to shift its production to Bulgaria and its subsidiary will start producing aluminium alloys for BMW, Rover and Smarth at the end of 2005 or in early 2006, company's CEO Anton Petrov said. Steelmet has a production capacity of 10,000 tonnes a year, while the total country's consumption stays at between 7,000 and 9,000. The company exports up to 22% of its production to Greece and directs its trade policy more and more to foreign markets. After the new production facilities are put into exploitation at the end of 2005, the company will double its production capacity. Total investments to the plant in Bulgaria will reach BGN 28 million by end-2005.
Source: Pari (08.11.2004)

BcMetals Corp. has reached agreement with Outokumpu Technology of Helsinki, Finland, to build an integrated copper plant in northwestern British Columbia. According to an announcement issued late Sunday, the small Canadian metals company signed a memorandum of understanding with Outokumpu for construction of a refinery capable of producing 50,000 metric tons of copper a year. The advanced technology operation is to be located at the Red Chris copper and gold deposit southeast of Iskut and about 215 miles south of the Yukon border. Terms of the deal were not disclosed. Outokumpu is a metals processing, research and technology company with 19,500 employees in 30 countries worldwide. Late last month the company announced plans to halt in-house copper production in favor of concentrating on stainless steel project
Source: Other (08.11.2004)

The gold deposits at Dundee Precious Metals Inc.'s Chelopech gold project in Bulgaria are estimated at 5.4 mln ounces, shows preliminary data from drilling operations. The Canadian company will explore the deposit for 15 years, extracting 1.5 mln tons a year. Dundee said in mid-October that the Ada Tepe gold project near Krumovgrad will produce between 130,000 and 175,000 ounces of gold per year at a very low cash cost.
Source: Dnevnik (09.11.2004)

Bulgaria is among the countries having the highest rates of social security, shows a research made by the international audit company KPMG. The research compares tax rates in Bulgaria, Croatia, Romania, Turkey and the 10 recently accessed counties. The corporate tax is lowest in the Baltic countries, Cyprus (10 per cent) and Hungary (16 per cent) and highest in Malta (35 per cent) and Turkey (33 per cent). The Bulgarian government suggested that the corporate income tax is reduced from 19,5 per cent to 15 per cent starting from the year 2005. There are no significant differences in the VAT levels among the countries. The rate is highest in Hungary - 25 per cent. Second place is hold by Poland and Croatia (22 per cent). Lowest is the rate in Cyprus - 15 per cent. In the 14 countries the global personal income tax rate varies between 12 and 50 per cent. It is lowest in Slovakia (19 per cent) and the Baltic countries. There is a flat rate for personal income tax in these countries. It is the same in Estonia, but the rate there is 26 per cent, which planned to be reduced to 24 per cent in 2005. Since 2005 the zero-bracket amount in Bulgaria shall be BGN 130 and the tax rate for salaries over BGN 6000 shall be 24 per cent.
Source: Standart (09.11.2004)

Sofia-based aluminum profiles maker Steelmet is launching production of pipes and solid alloys production in 2005. The new products will be exported to the foreign automobile companies Audi and BMW. With the launching of two new production lines, the company expects its aluminum profile output to double.
Source: Trud (09.11.2004)

The European Union has asked the World Trade Organization to condemn U.S. antidumping duties that have hit a British steel firm, EU officials said Tuesday. The EU maintains that the United States is breaching the rules of global commerce through its tariffs of almost 126 percent on imports of stainless steel bars made by Firth Rixson Special Steels Ltd. Washington imposed the duties in March 2002, claiming the company was unfairly dumping cheap goods on the U.S. market. The EU counters that the move violated international trade law. U.S. diplomats in Geneva said they were reviewing the EU complaint and could not comment immediately.
Source: Other (09.11.2004)

Russia boosted unprocessed aluminum exports tentatively 20.6% year-on-year to 2.811 million tonnes in January-September, the Federal Customs Service said. Unprocessed nickel exports were level with last year at 183,900 tonnes, but copper exports plummeted 20.2% to 246,400 tonnes. Nickel and copper exports soared in value, by 33.3% to $2.322 billion and 55.4% to $626.1 million respectively, on the back of price increases for the metals. Aluminum exports were valued at $3.216 billion. Almost all nonferrous metal exports were to non-CIS countries.
Source: Other (09.11.2004)

The U.S. International Trade Commission (USITC) has decided not to impose anti-dumping duties on aluminum imports from South Africa, ending the investigation on those imports. In a November 5 final negative determination USITC commissioners said they have not found sufficient evidence that U.S. imports of aluminum plate from that country injured or threatened domestic producers of similar products.
Source: Other (09.11.2004)

In a situation of liberalized domestic market, local metallurgical companies have completely reoriented their market strategies. While previously they were working mostly for the domestic market, currently 80 per cent of their production is exported chiefly to EU. Meanwhile, over the past two – three years, local metal consumption marked a sharp increase (largely due to the boom in construction activities), where last year it was estimated at 1 mln t. Only 20 per cent of this consumption, however, is satisfied by local producers. The biggest competitor of local metallurgical plants on the domestic market is Ukraine. More than 70 per cent of local metal imports come from the former Soviet republic. The prices it offers are 10 – 30 per cent lower than those offered by local producers. The country exports almost the whole range of metal products. This negative trend is intensifying. Within the first nine months of the year alone, the sales realized by local producers on the domestic market have declined with 45 per cent y/y. Despite all problems, local metal products are competitive on the foreign markets and are very well accepted. That is why after the price crisis which occurred over the period 2000-2001, production and sale of block metals, rolled iron and metal products has been gradually increasing. Last year, steel production posted a growth of 25 per cent, while rolled iron and ferrous metals production increased with 29 per cent. All three local steel plants – Kremikovtzi, Stomana Industry, and Promet, registered production growths. In the group of metal products, the biggest increase was posted by steel profiles – 60 per cent, followed by zinc-coated sheet iron – 18 per cent. In the first nine months of this year, despite the drop in overall crude steel production after the decommissioning of one of Kremikovtzi’s blast furnaces, rolled metal production recorded a 51-per cent jump. As for the non-ferrous industry, anode and electrolyte copper production grew with 24 and 13 per cent respectively over the past year. For the same period, block lead production jumped 5 per cent, and zinc – 8 per cent. Production of metal alloys rolled iron and aluminum rolled iron also increases. This positive trend continued this year, where overall non-ferrous metal production output is expected to grow with at least 50 per cent, total 2004 production marking a 10-year record. Actually, weak own production consumption on the local market is not so worrying for local producers, because the current situation on the international market is extremely favourbale and demand exceeds production, Ms. Politimi Paunova, chief secretary of the Branch Chamber of Ferrous and Non-ferrous Metallurgy, commented. In the next two-three years, metal prices are expected to keep their current levels, and high demand is expected to maintain globally, chiefly due to China. The Asian country will be one of the world’s largest metal consumers within the next two-three years with a view to the forthcoming 2008 Olympic Games, which will be held in Beijing. Nevertheless, there is no better scheme for the producer than selling their production in the region where they operate, Ms. Paunova commented. This would at least save transport costs, as well as port and customs fees. After last year Ministry of Economy refused to introduce protective metal imports measures for local producers, now they can do nothing but wait until 2007. Then Bulgaria will enjoy all restrictive measures valid in EU regarding Ukrainian imports in the region. EU would not allow its market to be harmed by imports of steel products, produced in a non-market economy, such as the Ukrainian, where electricity and natural gas are sold at prices, much lower than those within the EU, which creates unequal conditions and unfair competition. Investments in Bulgaria’s metal sector began after the privatization of the plants (1999-2000), as a part of the obligations, assumed by the new owners. Investments are mainly aimed at improving the environment, as well as meeting the provisions of the already active Law on Healthy and Safe Labour Conditions. The Branch Chamber has estimated them to around BGN 800 mln so far. One of the biggest investments in production restructuring were made by Umicore Med (almost EUR 200 mln), KCM – Plovdiv (USD 100 mln), Kremikovtzi (BGN 200 mln). Overall restructuring worth some BGN 80 mln has also been implemented in Stomana Industry. A similar investment is expected to be made in Sofia med also. The re-equipping of the Shoumen-based aluminum maker Alkomet cost some BGN 10 mln. New facilities were launched in Rousse-based Metalsnab Holding. In Rousse, Precise Interholding opened a new workshop for production of aluminum pipes. According to the Branch chamber, small companies operating in the branch are also actively investing in the improvement of their technologies and ecological indicators. Along with investing in meeting ecological standards, local companies are also investing in the change of their product structure. The overall trend is toward reorienting their production to more expensive products, which enjoy bigger demand. This is especially valid for rolled iron plants, though metallurgical enterprises are also expanding their product range through adding new productions. Metal exports account for some 16 per cent of Bulgaria’s total exports. This year, their share is expected to be even bigger. The branch recorded a positive trade balance of BGN 1.233 bln last year, which is BGN 169 mln premium to 2002. (Products worth BGN 2.351 bln were exported; products worth BGN 1.118 bln were imported). This jump is due not only to the higher international prices, but also to the growing physical export of products. For ferrous industry, export has jumped with 27 per cent, and for non-ferrous – with 15 per cent.
Source: Pari (10.11.2004)

Russia's largest steel maker touched off what is expected to be a bidding war for Stelco Inc. yesterday as the wave of consolidation that is reshaping the world's steel industry began washing over Canada. OAO Severstal, controlled by Russian tycoon Alexei Mordashov, launched a bid of considerably more than $500-million for all of Stelco, which has been operating under creditor protection since January, but generated record profit in the third quarter. The Severstal bid came as Stelco was scheduled to examine a proposal from Deutsche Bank AG that appeared set to give the German bank control of the insolvent steel maker. Steel industry sources said United States Steel Corp., the largest U.S. integrated steel maker, was mulling a bid for Stelco in the wake of Severstal's offer. U.S. Steel has returned to health and reported a record profit of $354-million (U.S.) in the third quarter. It is sitting on $1-billion of cash and its shares, which could be used as an acquisition currency, have been climbing. A deal by Severstal, U.S. Steel or another foreign entity to take over Stelco would mark the second for a major Canadian company in recent weeks, following the bid by China Minmetals to buy Canadian mining giant Noranda Inc. for $7-billion (Canadian). Stelco would fit well with Severstal's other North American operations, said Thomas Veraszto, deputy general director of the Russian firm, which is the world's 20th-largest steel maker with production of 15.7 million tons of steel last year. Those operations consist mainly of Rouge Steel Co. in Michigan, which was plucked out of bankruptcy last year. The purchase of Stelco and its approximately 4.5 million tons of annual production would boost Severstal to 12th spot among the world's largest steel makers. It is offering to assume or refinance $550-million of Stelco secured debt, pay cash to unsecured creditors and spend $400-million upgrading Stelco's operations. It will also work with labour to address Stelco's $1.25-billion pension deficit and other post-employment benefits.There was no mention of Stelco's common shares in the Severstal news release. "That's up to the judge to decide, whether the common shares have any value or not," Mr. Veraszto said. Stelco's shares shot up 25 cents to $1.47 in trading on the Toronto Stock Exchange after holding at $1.22 apiece before the Severstal offer become public before noon.Other steel makers are expected to step forward. The possible candidates include companies from Europe and Asia, perhaps even South America, said industry consultant Michael Locker, president of Locker Associates Inc. in New York, which is advising the union. "The worldwide trend in steel company consolidation has now come full force into North America," he said. The merger of Dutch-based Ispat International NV, LNM Group and Cleveland-based International Steel Group Inc. kick-started the latest consolidation. That deal will create Mittal Steel Co., the world's largest steel maker, with production of about 50 million tons annually. The merged entity has already said it will be on the prowl and could have Stelco in its sights. One source said the Mittal group looked at Stelco but took a pass and instead bought ISG for $4.5-billion (U.S.). The source said Stelco is bound to attract interest from strategic buyers as the global steel industry consolidates into a half-dozen or so big players. Mittal's goal is to produce 100 million tons of steel a year. Stelco produces about 4.5 million tons, making it a small bite for most potential buyers. BMO Nesbitt Burns analyst Randy Cousins said another obvious potential buyer is Luxembourg-based Arcelor, which has only a tiny presence in North America. *** The Top 10 in 2003 1. Arcelor, 42.8 million tons 2. LNM Group, 35.3 million* 3. Nippon, 31.3 million 4. JFE, 30.2 million 5. Posco, 28.9 million 6. Shanghai Baosteel, 19.9 million 7. Corus Group, 19.1 million 8. U.S. Steel, 17.9 million 9. ThyssenKrupp 16.1 million 10. Nucor, 15.8 million 20. Severstal, 9.9 million** 51. Stelco, 4.7 million 58. Dofasco, 4.2 million * On Oct. 25, London's Lakshmi Mittal announced a double merger, combining Ispat and LNM with International Steel. In 2003, the three had a combined 48.8 million tons. ** Stelco and Severstal would have a combined 14.6 million tons, vaulting the merged company to 12th spot.
Source: Other (10.11.2004)

At Stomana Industry company, based in Pernik town, employees are paid bounties of 100 levs each for not going on sick leaves and having days off. The bounty is granted every two months. The managers of the company found themselves forced to introduce such bounty system because of the mass shirking of their employees who used to go on faked sick leaves. Since January last, the company has spend 700,00 levs for the bonuses reporting a 10 percent reduction of the sick leaves. In 2003, 12 or 13 percent of the staff used to go on sick leaves every month. At present the rates went down to 3.2 to 3.6 percent of the employees. A total of 2 million levs has been granted to the metallurgists in bonuses in the 10 months of 2005. The monthly salary there averages 820 levs. At present, 1,400 people are on the payroll of Stomana Industry. The company will invest in opening new classes in the Metallurgy High School in Pernik to train youngsters to operate the new equipment.
Source: Standart (12.11.2004)

Stomana Industry has paid bonuses to the amount of BGN 700 000 in addition to the workers’ and the employees’ wages for strict attendance and lack of disciplinary penalties over the first ten months of the year, the management of the company said. The total amount of the bounties paid to the staff for good performance has exceeded BGN 2 mln.
Source: Monitor (12.11.2004)

Stomana has paid BGN 700 000 to its employees for strict attendance, the company said. The average wage in Stomana Industry amounted to BGN 820.
Source: 24 chasa (12.11.2004)

Russia and the European Union in late November plan to initial an agreement on Russian steel exports to the EU in 2005, the Economic Development and Trade Ministry's press service said. "We have almost completed negotiations on trade in individual steel items between Russia and the EU in 2005," a ministry spokesman said in remarks about talks on this issue held in Brussels this week. He said the parties have reached agreement on the basic quantitative parameters. Russian steel exports next year will be increased against 2004, including quotas on the export of bars. After the agreement has been initialed and discussed by the European Commission and the Russian government, it may be signed. The 2004 quota for Russian steel exports to the EU is 1.8 million tonnes.
Source: Other (12.11.2004)

As previously reported by SteelOrbis, the European Union (EU) Commission demanded World Trade Organization (WTO) to investigate US’ tariffs on certain steel products it imposed five years ago that were found illegal by WTO in 2002. Upon the request, WTO initiated an investigation and found that US failed to lift antidumping duty orders on certain steel products. The recent complaint of EU regarding the tariff of 126% on imports of stainless steel bars is the first step toward asking WTO to condemn the US tariffs. The US imposed the subject duties in March 2002 on the ground that the sales of the company in the US market were made below normal values. US diplomats in Geneva stated that they will review the complaint of EU.
Source: Other (12.11.2004)

By the end of November, the Government is expected to have completed the final report on how to collect Kremikovtzi’s rescheduled debts to the state monopoly enterprises. The main personages in the operation will be again deputy prime minister Ms. Lidia Shouleva and minister of finance Mr. Milen Velchev. The evaluation prepared by the auditing company KPMG Bulgaria on the plant’s actual state is also expected then. The only hope for this investment program not to remain another good wish, would be if Kremikovtzi meets the new year with a new owner, e.g. India’s Global Infrastructure Holdings, which has started negotiations for buying the majority shareholding in the plant next spring. According to unofficial sources, the deal will be concluded soon. In order to actually implement it, however, Post-privatization Control Agency will have to unblock 71 per cent from the company’s capital and to replace the current guarantee with another one. The controllers levied a distraint on the stock, held by Finmetals in Kremikovtzi due to unpaid defaults under the privatization contract. The alternative variant would be if the Indian company did not buy the plant, but its owner – Finmetals. Global Infrastructure Holdings is a subsidiary of the metallurgical giant Ispat, owned by the Mittal family. As early as August this year, Sofia City Court registered changes in the plant’s management and two of Ispat’s employees entered Kremikovtzi’s board of directors – Mr. Ram Krishen Duuda (deputy chair), and Mr. Alok Gupta (member). Ispat owns steel plants in the Philippines, Romania, Kazachstan, USA, Bosnia, Lybia, and some time ago it bought the United Polish Steel Plants.
Source: Banker (15.11.2004)

Stomana JSC is encumbering the port of Lom. The Pernik-based company is the major shipper at the port, the executive director Georgi Mladenov said. 115 000 tons of raw and other materials and finished output have been shipped this year. The contract for 2005 provides for 140 000 tons to be handled. Until recently Kremikovtzi was our main client, one of the wharves was even named after the company, Mladenov added. One million tons of cargoes have been handled in the port of Lom by the end of last week, which is a record for the past ten years.
Source: Standart (15.11.2004)

Close on the heel of the Ispat Steel buyout of entire holding of LNM Holdings NV and International Steel Group, Lord Swraj Paul's Caparo group on Sunday announced acquisition of five European steel companies for an undisclosed sum. The combined annual sales turnover of the five companies will be around 135 million pounds (Rs 1090 crore), media reports said. Caparo which did not disclose the cost of the acquisitions has steel-manufacturing units in the UK, US, Canada, Spain and India. The acquisitions will increase the group's turnover by 25 per cent. The acquisitions include Britain's leading manufacturer and distributor of precision steel tubing, Tyco Tubes and Tyco Strip, a leading supplier of cold-rolled steel strips.
Source: Other (15.11.2004)

European steel group Arcelor (FR:005786) on Monday said third quarter profits jumped to 629 million euros from 101 million euros, with sales climbing to 7.15 billion euros from 5.86 billion euros on a "healthy pace" growth in steel consumption. Arcelor said demand in China has stayed strong, and real consumption is expected to continue to grow amid "normal" inventory levels. Raw material and freight costs are expected to increase further from very high levels, it added.
Source: Other (15.11.2004)

The average monthly income per capita in Bulgaria was BGN 176.83 (about EUR 88) in September, the National Statistical Institute said. Year on year, income has risen by BGN 26. The total household income in September was BGN 454, increasing by BGN 44. At the same time monthly expenses have surged from BGN 153.10 a year earlier to BGN 177.71 in September. The share of wages in the monthly income of Bulgarians has declined from 45.9% to 44.8%. Housing, water, electricity and fuel costs have risen 1.3% for a year; transport expenses have increased 1.2%, communications, 0.1%.
Source: Pari (16.11.2004)

Real-term average salary in this country saw an increase by 34.5 percent over the last four years, said Dikran Tebeian, Deputy Chairperson of the Bulgarian Chamber of Commerce and Industry. At present, after tax and social security and medicare insurance contributions, disposable income averages 244.61 levs per month, while next year it is expected to go up by 34 levs. According to an analysis made by the Chamber, next year incomes are not expected to go down, despite the fact that the insurance burden will be distributed between employers and employees in a 70:30-percent ratio. At present employers pay 75 percent and employees 25 percent of the insurance burden. An increase in the incomes is expected due to the reduced income tax rates, increase in the social security and medicare insurance contributions and the year-on-year inflation rate. In 2002, real-term salary averaged 192.24 levs at 5.8 percent inflation rate. According to the forecasts of the National Statistical Institute, net average salary in 2005 will stand at 344 levs with projected inflation rate of 3.6 percent.
Source: Standart (16.11.2004)

The Bulgarian Pirdop copper plant of Belgium's Umicore is on track to produce a record 225,000 tons of copper anodes this year, and Umicore expects to be able to boost output to 255,000 tons by 2007, Reuters reported on November 15. The company has revised its earlier forecast for flat y/y output. The Pirdop smelter posted an output of 100,000 tons in January-June despite a scheduled repair-related work stoppage in April.
Source: Dnevnik (16.11.2004)

International Steel Group Inc, the second-largest U.S. steelmaker, has notified the Industrial Revitalization Corp of Japan of its interest in buying Mitsui Mining Co, sources familiar with the matter said Tuesday. ISG apparently wants to purchase Mitsui Mining to secure a stable supply source of coke amid strong global demand for the key steelmaking material, the sources said. The state-backed IRCJ is expected to call for bids for Mitsui Mining as early as by the end of the year. If it wins its bid, ISG will be the first foreign company to acquire a firm being helped by the IRCJ.
Source: Other (16.11.2004)

Mr. Anton Petrov is representative of the Greek industrial group Viohalco in Bulgaria. He holds a master’s degree in International Economic Relations. Ever since Steelmet JSC was established, he has been acting as the company’s CEO. He is a member of the managing boards of the other companies from Viohalco’s structure in Bulgaria as well. Company Steelmet JSC was officially associated on November 15 2004 and started functioning as a commercial enterprise, which is the only distributor in Bulgaria of the products of the ETEM brand. In its first year of operation, the company registered a profit of BGN 750 000. In 1997, it decided to build a plant for production of aluminum profiles. Real production started in 1999. Three presses with a total production capacity of 10 000 t were launched in the plant as a greenfield investment. The company’s production is certificated under ISO 9001:2000. The plant produces standard aluminum profiles, architectural systems ETEM and profiles, made to specific plan by the client. The company has invested a total of EUR 16 mln in Bulgaria. Steelmet currently employs around 320 people, 20 per cent of whom are specialists with higher education. Steelmet is the first company in Bulgaria, where the Ombudsman institution works. Mr. Petrov, could you tell us Steelmet’s financial results for the first nine months of 2004? - The company’s profit for the period ending September 30 is in the amount of BGN 4 mln, which represents a 60-per cent growth y/y. - How about competition? - We are operating in a difficult business environment, surrounded by many rivals – both fair and unfair. Our financial results could have been even better, if there was no illegal imports of Turkish aluminum in Bulgaria. - Does Steelmet distribute dividends to its shareholders? - We have not distributed dividends so far. All funds we have managed to accumulate have been reinvested in production. Two months ago, the company increased its own capital from BGN 50 000 to almost BGN 400 000. - What is the amount of your production output in terms of volume? - Since the beginning of this year, we have produced and sold around 7 000 t of aluminum profiles. 35 per cent of this amount is sold on the domestic market, and the remaining 65 per cent are exported. Our supplies to clients within Bulgaria have increased 80 per cent y/y. - Where do you export your products? - Export is chiefly destined to Western Europe, mainly Germany and UK, but our products are also sold on the Balkans, including Greece, Macedonia, and Serbia. Currently, we are slowly penetrating the markets of Russia and Ukraine as well. - What investments have you made this year? - This year we have not made any serious investments, because we are in the final stage of our initial investment stage. Currently, we are preparing for the next stage of our investment programme. - Could you tell us something more about the next stage? - We are planning to invest another EUR 12 mln. They will be used to double the company’s production output, as well as to increase our own capital. A big part of the funds will be used for purchase of new plots of land. Our investment plan also includes options of buying two more extrusion lines, which will help double our production capacity. We are also planning to start making bars and tubes made of solid alloys, which will be a new product for Steelmet JSC. Thus, by the end of 2005, the amount of our annual production output will have reached 21 000 t. - When will real investment start? - There is real investment already. We have received the first EUR 3 mln from our Greek investors Etem. We expect another EUR 3 mln by the end of this year. The other half of the sum will be received by the end of 2005. - Your products are used for the building of many Black Sea hotels…. - Not most, but a big part of our production is used for the building of hotels located in Bulgaria’s Black Sea coastal area. Investors prefer to work with Steelmet, because we offer them a credit product, developed by us and extremely lucrative for them. - Could you give us some details about this credit product? - The product is called “credit limit with a leasing scheme”. Our clients pay 20 per cent of the deal price in advance, and the remaining part of the money could be paid up to 2 years after that. In this way, we give them an opportunity to pay when they start generating real incomes themselves. - Do you have any problems with disloyal debtors? - Like all institutions, giving credits in some form, we also have cases of disloyal debtors. Therefore, we insure our debts, because the money we receive from our clients are the thing our company and our employees depend on.
Source: Monitor (17.11.2004)

The European Union will expand its quota on steel imports from Russia this year by 12 percent, or 200,000 tons, because of rising EU consumption.The quota increase for Russia, the world's fourth-biggest steel-producing nation, covers hot-rolled coils for re-rolling, a flat-steel product used for everything from car bodies and refrigerators to filing cabinets and tin cans." There wasn't sufficient supply in the EU market to cater for demand," Arancha Gonzalez, the 25-nation EU's trade spokeswoman, said by phone today from Brussels.Arcelor, the world's biggest steelmaker, reported a record third-quarter profit yesterday after three price increases since January, and predicted that demand from automakers and packaging companies would rise further in 2005. European economic growth is rebounding from the weakest pace in a decade last year.European steel demand is likely to rise 3.9 percent this year, steel industry group Eurofer said yesterday, increasing an earlier estimate of 2.8 percent. It fell 0.4 percent last year.Italy and Poland requested the extra Russian imports of 200,000 tons, of which 150,000 tons will go to Italy and 50,000 tons to Poland, Gordon Moffat, a Eurofer director, said by phone from Brussels.
Source: Other (17.11.2004)

Cabinet on Wednesday agreed to sell the state's stake in the Vitkovice Steel (VS) company by means of a two-round tender, Finance Ministry spokesman Marek Zeman told Interfax. The stake is held by the National Property Fund (FNM) subsidiary Osinek. Key criteria for the tender will be offered price and business plan, which should secure the firm's viability and minimal employment until 2008. Another condition of the sale would be the settlement of all disputes with Osinek or Vitkovice Steel. The method of the sale is in keeping with the National Program for Czech Steel Sector Restructuring and with the VS business plan that was accepted by the European Commission and the EU Council. A strategic investor should help VS to meet all EU norms and regulations by 2006. Preliminary interest in VS has been expressed by Russia's Severstal, Ukraine's Donbass, France's Arcelor, and the owner of Ispat Nova hut (INH), LNM Holdings. In order to better coordinate the tender and evaluate bids, the Cabinet has established a ministerial commission with representatives from the Czech Consolidation Agency (CKA), the FNM, the Trade and Industry, Finance, Regional Development, and Labor and Social Affairs Ministries, says the spokesman. The result of the tender should be submitted to the government for approval by 2Q 2005.
Source: Other (17.11.2004)

OAO Mechel Steel Group will launch its first three-yr bonded loan worth 2 bln rbl on November 25, the company said. The bonds were registered by the FSC on Apr. 29. The issue comprises 2 mln bonds, 1,000 rbl par each. Registered number is 4-01-55005-E. The bonds carry half-yr coupons with the first coupon rate to be fixed at the auction, the remaining coupons will be set by the BOD. An offer to buy back the bonds matures on the date of the third coupon. The placement will be held on MICEX at par. Alfa Bank is the paying agent.
Source: Other (18.11.2004)

BHP Billiton, the world's biggest supplier of coal for steelmaking, may raise 2005 contract prices for the fuel by a record 79 percent as buyers such as Arcelor SA and Nippon Steel Corp. compete for lean supplies, analysts said. Prices for the so-called coking coal may average $100 a ton in the year starting April 1, compared with $56 this year, according to a Bloomberg survey of eight analysts and investors ahead of a coal conference that starts today in Sydney.
Source: Other (18.11.2004)

SAP R/3 is in real operation in Stomana Industry JSC. Jobs integrated in the ERP system in the plant are over 80. They are connected in a network covering an area of 3 mln sq. m. The SAP server was installed in Thessaloniki and connection to it is carried through a satellite. The landmark of this project is that this is the first time the production planning and management module is installed in Bulgaria. The company invested over EUR 1 mln in the project. The construction of the optic network cost EUR 100 000. Stomana Industry JSC – Pernik is a leading steelmaker in Bulgaria. Its output for 2003 came to 600 000 t. Since 2001 the Greek steel producer Sidenor – Steel Products Manufacturing Company S.A. (a unit of Viohalco Group of Companies) owns 75 percent of the company, and the Bulgarian private company Evrometal JSC holds the rest of the capital. The project for the implementation of SAP R/3 started in March 2003. It has been effective since January 5, 2004. The system was put in operation by a Teka Systems SPJSC team, a subsidiary of Teka Systems, Greece, which is the SAP Competence Center of Viohalco Group of Companies. Konstantin Stamenov, managing director of Stomana Industry JSC, heads the team of the company. IT experts from Sidenor, Greece, also took part in the accomplishment of the project. The following modules were installed: Finances and Accounting (FI), Controlling (CO), Inventory Management (MM), Production Planning and Management (PP), Sales and Distribution (SD), and Human Resources (HR).
Source: Other (18.11.2004)

People who sell ferrous metal scrap will fill in declarations about the origin of the scrap. They will be liable in case a crime is established, Valeri Nakev of the Bulgarian economy ministry said. Thursday the government adopted a new ordinance on trade in ferrous and non-ferrous metal scrap. The higher prices of iron have increased thefts of steel components from power lines, Nakev said. The damage caused to the National Electric Company since the beginning of the year amounts to BGN 139,964. The cases of stolen metal parts from water-supply and irrigation systems have also risen. Very often they are sold in pieces and it is impossible to follow their origin, Nakev explained. The moving of scrap from one place to another will also be entered in the register of deals in scrap, no matter whether a deal has been carried out. Traders often use relocation to conceal scrap purchased. A total of 470 companies are licensed to trade in metal scrap. Since a licensing regime was introduced in 1995, eight companies have been deprived of licence, another two revocations are being appealed at present. According to data of the Association of Metal Traders, the turnover of steel scrap last year amounted to 1.070 million tonnes. As much as 440,000 tonnes of scrap was exported, the remainder was sold for processing to Kremikovtsi and Stomana of Pernik. The turnover of copper scrap stood at 13,000 tonnes in 2003, of aluminium alloys, at 22,000 tonnes.
Source: Pari (19.11.2004)

The UK-based Paneuro Products bid highest for the closed ferroalloy mill Toplinice in Skopje and will become majority owner of the metal works, SeeNews announced. The British company, having bid EUR 6.4 million, was preferred to Hungarian and offshore groups. Still the ministry of finance is to approve the deal. Representatives of Paneuro Products said they were going to open two of a total of five furnaces, with annual output of 75,000 tons.
Source: Dnevnik (19.11.2004)

Canada's biggest mining company Noranda, has ended exclusive talks with China Minmetals on an acquisition bid. Noranda announced that the two-month deadline for exclusive talks with China Minmetals had expired, though discussions with the Beijing-based metals giant were continuing on a non-exclusive basis. The Chinese metals trader said it will persist with its acquisition bid. Minmetals is leading a 5.5 billion US dollars bid by a consortium of major Chinese state companies for 100 percent of Noranda. The five-member consortium also includes Baoshan Iron & Steel, known as Baosteel; Citic Investment Corp., Jiangxi Copper and Taiyuan Iron & Steel.
Source: Other (19.11.2004)

A slowdown in the Chinese economy would be good for the global steel industry because it would make over-investment in new capacity less likely, according to Aditya Mittal, president and chief financial officer of Mittal Steel, the world's biggest steel producer. Mr Mittal, son of Lakshmi Mittal, the steel group's chairman and owner said: "When the Chinese government earlier this year tried to cool their economy, [steel] stocks went down, but in my view it should have been the other way around." The Netherlands-based company agreed to acquire the US-based International Steel Group last month. Its market capitalisation when the deal is finalised early next year is expected to be more than $21bn. Like most other steel companies, Mittal has been buoyed by a big rise in demand from China. That has been the main reason for a 50-100 per cent increase in steel prices over the past year, swelling the sector's profits. He said: "The fact that steel production and consumption in China are slowing reduces the possibility that China will be a sizeable steel exporter, and this will help the rest of the industry". Since early 2001, share prices of steel companies worldwide have outperformed the rest of the global stock markets by 78 per cent, helped by a broad recovery as well as the impact of demand from China. China imported 45m tonnes of steel last year, although this figure is expected to decline this year. MEPS, a UK steel consultancy, estimates the annual increase in consumption of steel in China is likely to fall in 2005 to 6 per cent, sliding further to 3.9 per cent in 2006, after an expected increase of 15.1 per cent this year. Output of steel in China - which this year is likely to account for a quarter of the world total of just over 1bn tonnes - is expected to slow at a similar rate to demand. However, the country's share of global steel consumption is still expected by MEPS to rise from 25.1 per cent this year to 27 per cent in 2008. Peter Fish, managing director of MEPS, said Mr Mittal's view that slowing Chinese consumption would help the industry was plausible. "However, the benefits might not be all one way. If Chinese demand falls off, the prospects for companies increasing their prices will be less than before. That, together with raw materials price-rises that are in the pipeline, could be negative for the industry," said Mr Fish.
Source: Other (21.11.2004)

Ministry of Environment and Waters has decided to impose another BGN 63 000 monthly ecological sanction upon Kremikovtzi JSC, claiming the plant’s coke production is polluting the air. The decision was taken on November 12 this year, following proposal made by Sofia’s Environment Inspectorate, Mr. Nikolay Kenanov, head of the Coordination with regional environment and waters inspectorates directorate announced. The fine, however, will most probably be appealed in court, which has become a regular practice among industrial enterprises, Mr. Kenanov explained. Kremikovtzi has accumulated debts worth some BG N1 270 000 to Bulgaria’s ecology ministry, topping the list of 97 enterprises, whose debts to the ecology ministry have been transferred to the State Receivables Collection Agency. From January to November this year, local industrial companies have paid some BGN 2.7 mln in fines related to environment pollution. A total of 321 sanctions have been imposed within this period. The biggest ones have been paid by Devnya-based Agropolychim, Bourgas-based Lukoil Neftochim, and Pirdop-based Umicore Med.
Source: Sega (22.11.2004)

Local industrial enterprises are starting to decommission installations, not meeting ecological standards, stipulated by the complex permits Bulgaria’s Ministry of Environment and Waters has been issuing since the beginning of this year. Besides Pazardjik-based wool processor ADF, a number of small detail-chroming workshops have stopped some of their capacities, polluting waters, as well. This was announced by Mr. Boiko Malinov, ecology ministry official, commenting on their joint work with the enterprises, which should bring their operations in conformity with EU standards by 2007. According to the provisions of the Environment Protection Act, 203 enterprises, operating in the field of metallurgy, chemical industry, cement production, leather processing, TPPs, as well as waste burning facilities, should have obligatorily renovated their installations before October 2007. A total of 340 installations, whose owners are expected to invest some BGN 4-5 bln in their modernization by the end of October 2007, have been registered. If modernization is not implemented, they will be closed down following our country’s EU accession. The funds are stipulated in the complex permits. Through these documents, producers are engaging to limit harmful emissions or heavy metals in the air and waters down to a certain percentage. For some productions, transition periods will be allowed until 2014. In case plants exceed the stipulated norms, they will have to pay heavy sanctions, and may even be ordered to stop their production. So far, Ministry of Environment and Waters has issued a total of 7 permits – to Lukoil Neftochim, KCM – Plovdiv, Monbat – Montana, Sisejam’s subsidiary – Trakia Glass Bulgaria, Bourgas-based Promet Steel, the solid waste depot in Vratza-Mezdra, and Lakprom, based in the village of Svetovrachene. Another 85 companies expect to be issued such permits soon. Although the process is still in the very beginning, the Green party in Targovishte has already appealed in court the complex permit issued to Trakia Glass Bulgaria. The ecologists are protesting against the allowed emissions, stipulated in the permit. The facilities will continue paying fines, currently imposed on them by the ecology ministry on a monthly basis, unless they install the new equipment. A total of 321 sanction orders worth some BGN 886 000 have been issued over the period January- November. The fines, collected over the same period (including from delayed enactments), are in the amount of over BGN 3.1 mln. Separately, outstanding debts of 97 enterprises to the ecology ministry worth some BGN 2.5 mln, are being collected through the State Receivables Collection Agency. Some of the biggest debtors are Kremikovtzi, Gorubso-Madan, Mines Bobov Dol, etc. State Receivables Collection Agency has to collect some BGN 1 mln from Kremikovtzi. Ministry of Environment has initiated legal proceedings for the forced collection of interest-free credits for ecological projects worth over BGN 3.5 mln, granted over the period 1997-1998.
Source: Dnevnik (22.11.2004)

The European Union could relax its quota for Russian steel deliveries by approximately 10% to 2.2 million tonnes in 2005, a source at the Russian Economic Development and Trade Ministry told Interfax. The governments of Russia and the 25 EU members will meet to approve the figures at the end of November, the source said. The relevant agreement and autonomous quotas will enter into effect on January 1.
Source: Other (22.11.2004)

The State Property Fund said Friday it would auction the state's remaining 17.84 percent in steel giant Magnitogorsk Iron and Steel Works, or MMK, on Dec. 22 at a starting price of $790.15 million. A fund spokesman said bids for Russia's No. 2 steel producer should be submitted by Dec. 20. Foreigners are allowed to bid. MMK's management controls 58 percent of the company. A coal unit of mid-size steel company Mechel, which is expected to bid, has about 17 percent. Both Mechel, which recently raised $291 million via an ADR placement in New York, and the MMK management are seen as front-runners at the auction.
Source: Other (22.11.2004)

A total of 69.35 per cent of the employed in Bulgaria work for the private sector, according to recent data provided by the National Statistical Institute for the third quarter of the year. The total number of employed in the country's private sector reached 2.097 million, up by 150,000 compared to the situation a year earlier. Around 120,000 of them are employers, 302,800 are self-employed, while 1.609 million are employees. Meanwhile, the number of employed in the public sector is decreasing. At the end of the third quarter the number of people employed there stood at 921,400, down by 53,900 compared to the end of September 2003. Economically active population of the country is rising in number. The figures of the National Statistical Institute for this position showed 3.397 million, up by 38,300 compared to the situation a year earlier. The reason for the increase was part of the permanently unemployed found work. Number of employed in the country came to 3.024 million, or 45.3% of the citizens at the age of 15 or more. Bulgarian workforce is mainly concentrated in the field of services, where 56% of the employed work. Industry employs another 32.7%, while agriculture gives jobs to 11%. Country's unemployment rate stays at 11%. During the third quarter some 353,000 people were unemployed, down by 53,300 compared to the third quarter of 2003. Unemployment rate in the cities is 10.6%, a 1.5 percentage points less than in villages. A total of 226,200 people have been permanently unemployed for over a year, and 60.6% of them have no previous work experience.
Source: Pari (23.11.2004)

The Bourgas – Alexadrupolis pipeline memorandum between Bulgaria, Russia and Greece will be signed on December 7, the Minister of Regional Development and Public Works Mr. Valentin Tzerovski announced in Sandanski yesterday. In the past two years, Bulgaria has put efforts in updating the economic and technical parameters of the project. The major points of the Bulgarian stand are the economic efficiency, the development of a basis for project financing, transfer reliability and balance of all the participating countries’ interests. The Bulgarian expert group, lead by the head of the Mr. Tzerovski’s political cabinet Mr. Kalin Rogachev, along with the Greek and Russian experts have already contracted the memorandum texts.
Source: Pari (23.11.2004)

Steel concern Ispat Polska Stal (IPS) has finally begun initial preparations for several investment projects, which according to an agreement between the Polish government and the European Commission, must be finalized by the end of 2006. The company has shortlisted Italy's Danieli, Germany's SMS Demag and one of the subsidiaries of Austria's Voest Alpine, as potential candidates to complete the installment of a steel rolling mill and a molding line. The value of both investments is estimated at zl.3 billion. "We expect that this week we will list the projects from the best to the weakest. The only criteria in the first phase to be taken into account are technical details. Financial negotiations will be held in the next phase," said an anonymous source at the Huta Katowice steel mill, where the projects will be executed. It is expected that IPS will finance the projects through loans.
Source: Other (23.11.2004)

The European Union is looking into allegation that South Korean exporters of steel ropes and cables may have been selling their products at unfairly low prices. According to the Korea International Trade Association, the probe was announced in the EU Official Journal last Saturday as the Brussels-based organization gave a go-ahead to the investigation following a complaint by the European Federation of Wire Rope Industries. The move could lead to imposing tariffs on Korean exports of steel ropes and cables to protect companies in the EU. Under the EU Regulations on anti-dumping investigation, the commission can take up to 15 months to complete its probe.
Source: Other (24.11.2004)

Kazakhstan and European Commission (EC) has recently signed an agreement for steel trading. This agreement will provide amendments into the Agreement of 2002 and increase of the current Kazakhstani steel import quotas in connection with the recent expansion of the EC. Furthermore, in December 2004, the parties plan to hold consultations on specification of export limits in 2005.
Source: Other (24.11.2004)

Changes in the supervisory board of Kremikovtzi JSC are on the agenda of the extraordinary general meeting of the shareholders timed for December 28 this year, announcement in the State Gazette says. The changes will come about only if a deal is made by then, a member of the supervisory board of the company commented. The Indian company Global Infrastructure Holdings (GIHL) is intending to buy the majority stake in Kremikovtzi, and is expected to invest over USD 300 mln in the plant. What hinders the deal is that the court blocked the shares of the company at the request of the Post-Privatization Control Agency (PCA). The PCA claims USD 23,759,890 of defaults and interests for non-feasance of the investment programme for 2001, according to which USD 46,608,647 must have been invested.
Source: Monitor (25.11.2004)

U.S. Steel Corp. has jumped into the bidding war for Stelco Inc., announcing Wednesday that it is interested in making an offer for all of the restructuring Hamilton steel giant. Pittsburgh-based U.S. Steel, the largest North American-based integrated steel producer, filed court documents stating it has expressed an interest and has been in talks with the company, but wants changes to the way the bidding process is being conducted. U.S. Steel is among many North American steel producers enjoying strong demand and high prices. Last month, it reported a $354-million US profit for its third quarter and had more than $1 billion US in cash reserves. U.S. Steel is prepared to sign a non-confidentiality agreement that would allow it to view Stelco's books in order to create its bid, now that Stelco has made some revisions to those agreements. However, U.S. Steel said it needs more time than Stelco has asked for in its restructuring process to formulate and close an offer. Stelco wants any transaction approved in February but U.S. Steel says it needs until April 30 because Canada's Competition Bureau would need time to approve a bid made by an industry player. U.S. Steel also wants better access to stakeholders to make its offer, including the United Steelworkers union and governments, who may be asked to help solve Stelco's $1-billion-plus pension deficit. A U.S. Steel bid would likely compete against a $900-million refinancing offer from Deutsche Bank. U.S. Steel would also be competing against OAO Severstal, a Russian firm looking to expand its presence in North America.
Source: Other (25.11.2004)

By the end of this month India's LNM and Ukraine's Donbas are to once again receive invitations to take part in the bid to take over the Czech-based Czestochowa Steel Mill. The terms of the tender are to be completely changed. Although no details were revealed, it is known that this time the investor will have the chance to take over all subsidiaries of the steel mill, not only its direct assets, as in the previous bid. Such a decision is beneficial for Donbas, which recently announced its aspiration to acquire the whole Czestochowa steel related group. "The investors can carry out lobbying activities, but they will not be successful. When the potential partners submit their bids, the representatives of Towarzystwo Finansowe Silesia, the government and the creditors will immediately meet, will have to turn off their mobiles and within a couple of hours make the final decision," said a person close to the tender.
Source: Other (25.11.2004)

Nissan Motor, the Japanese carmaker, has been forced to stop production at three of its four car assembly plants in Japan for five working days after running out of steel - a dramatic illustration of the shortages that have started affecting companies across Asia. Japan’s second largest carmaker 44 per cent-owned by France’s Renault said the suspension would reduce production by 25,000 units or 1.7 per cent of forecast annual domestic production of 1.43m units.
Source: Other (25.11.2004)

Toyota Motor Corp. plans to buy more steel from South Korea and start procuring steel from China to prepare for a projected tight steel supply, according to a published report Friday. Toyota will increase use of steel sheet made by South Korea's largest steelmaker, Posco, while begin buying steel from China's Shanghai Baosteel Group Corp. for supply to its Southeast Asian plants, the Nihon Keizai Shimbun reported. Toyota will also seek to ensure a stable supply from two Japanese major suppliers Nippon Steel Corp. and JFE Steel Corp., the report added.
Source: Other (26.11.2004)

OOO Uralskaya Stal (Urals Steel, founded on NOSTA assets) derived 1.9 bln rbl net profit over 9 months vs. 2.3 bln rbl posted in January-September of 2003, Uralskaya Stal General Director Nazim Efendiev said. Pretax profit stood at 2.5 bln rbl vs. the loss of 2.27 bln rbl, sales efficiency was 15.1% compared to minus 6.4%. Uralskaya Stal was set up in 2002. In 2003, it bought out production assets of bankrupt OAO NOSTA. 100% share in Uralskaya Stal has been recently accumulated by the companies of Alisher Usmanov, head of Gazprominvestholding by buying out the 50% from the companies controlled by Oleg Deripaska, the owner of Bazovy Element.
Source: Other (26.11.2004)

The World Trade Organization imposed penalties Friday on U.S. exports ranging from apples to textiles, escalating a trade dispute the Bush administration has struggled to defuse by unsuccessfully urging Congress to repeal legislation aimed at protecting American steelmakers. The administration signaled it would accept the penalties short term, but also warned that the United States would aggressively protect its own trading interests and expects fair treatment from the WTO. "We've worked hard to comply with the WTO," President Bush said, speaking to reporters in Crawford, Texas. "It's important that all nations comply with WTO rulings." Bush said he has worked with Congress "to get in compliance," and "we expect the WTO as well to treat our trading partners as they treat us." In Geneva, the 148-nation WTO, which referees global commerce, approved punitive taxes long sought by the European Union and other countries because of a law they say unfairly protects U.S. steel companies and other industries. EU trade chief Peter Mandelson said the sanctions could be applied early next year. The 2000 law, known as the Byrd amendment for its backer, Sen. Robert Byrd, D-W.Va., lets the U.S. government fine foreign companies that it judges to be selling goods in America at below-market prices. The revenue is paid to U.S. companies to help them better compete. Two years ago, the WTO ruled the law was illegal, arguing that it punishes exporters to the United States twice: First they are fined, then those fines are given to their competitors. American officials said Friday that the United States would comply with the ruling that declared the law illegal. But WTO members expressed skepticism about the compliance promises.
Source: Other (27.11.2004)

Arcelor, the world's largest steel maker, said it was interested in buying the stake in Turkey's Eregli Demir Celik (Erdemir) that the government planned to sell next year. Arcelor also said it would increase by 5 per cent of its supply of flat carbon steel to European car makers next year due meet rising demand. Arcelor steel is present in half the cars made in Europe. The Turkish government has appointed a group of advisers to look into the sale of the state's 46.12 per cent stake in Erdemir, the country's biggest steel maker. The sale is part of a privatisation backed by the International Monetary Fund (IMF). The government has yet to make clear whether the sale will take the form of a block sale or a public offering. 'We plan to participate,' Arcelor spokesman Jean Lasar said. 'We are interested. It (Turkey) is an interesting market.' Lasar said Arcelor saw it as a base to expand not only in Turkey but also in the Middle East. Another 49 per cent of Erdemir is listed on the Istanbul Stock Exchange. The steelmaker expects to bid for a 49 percent stake in Turkey's Eregli Demir Celik Fabrikalari AS, which will be auctioned by the government in the first quarter of next year. The price may be about $1 billion.
Source: Other (27.11.2004)

TeproSteel, a unit of Greek steel group Viohalco, will acquire the Danielli technological line which is currently warehoused unassembled on the site of the Pernik-based metallurgical plant Kamet. No further details about the deal were immediately available. Kamet denied the information, saying the line has not been sold. The TeproSteel bid was ranked second at the auction but the Viohalco unit later bought the line from the auction winner for an undisclosed amount. The Danielli line will be installed on the site of the Pernik-based steel plant Stomana Industry which is owned by Viohalco. The Danielli line was purchased for 145 mln Deutsche marks in 1989. The equipment was put up for sale as part of the recovery plan for the indebted Kamet but none of the sell-off attempts mounted in the past couple of years were successful. The assembly of the equipment, designed to produce 200,000 tonnes of specialised steel and 150,000 tonnes of rolled steel sections annually, is estimated to cost $20 mln. Kamet itself is also up for grabs with purchase offers expected by December 22.
Source: Dnevnik (29.11.2004)

Russia has no right to wag a finger at us for manufacturing arms under their patents. Kalashnikov production in Bulgaria stopped long ago. The Bulgarian plants produce Arsenal that is an improved version of the famous automatic gun. Besides Bulgaria produces the original version AK - 7.62 of much greater strength while the rest of the former socialist countries, Russia included, produce the AKM variant. The experts from Kazanlak keep on improving their "bestseller" and in 1999 completely lawfully named their gun Arsenal. For the same reasons other patented products like pistols and machine guns also bear the same trademark.
Source: Standart (29.11.2004)

The programmes for elimination of past environment damages at the Elatsite and Assarel Medet copper mines have been approved by the interdepartmental expert council, Bulgaria's ministry of environment said. This gives the green light to the procedure for selection of a contractor. The programmes are financed by the budget, after the state recognised its responsibility for environment damages caused before the privatisation of the enterprises. Assarel Medet's programme is assessed at EUR 12 million, which will be secured as a loan from the World Bank. Elatsite's project amounts to BGN 4.5 million. The two mines were privatised in 1999. The six-year pilot project for recovery of past environment damages at Umicore of Pirdop was completed a month ago. The programme cost USD 25 million, which the state financed with a World Bank loan. The state plans to spend more than BGN 300 million to compensate the new owners of polluters.
Source: Pari (29.11.2004)

South Korean steel giant POSCO is mulling an emergency order for steel from Nissan Motor, Japan's second largest automaker that is facing an unprecedented steel shortage. POSCO, the world's fifth largest steel maker, may be able to meet some 50 percent of the emergency order placed by Nissan, officials said.
Source: Other (29.11.2004)

Billionaire Lakshmi Mittal, fresh from the record-breaking deal that turned him into the world’s biggest steelmaker, is scouting in Poland, the Czech Republic and Turkey as he hits the acquisition trail once again. “We have indicated our interest in Huta Czestochowa in Poland and Vitkovice Steel in the Czech Republic. We believe we are the most sensible partners for these companies, given our past experience and success in the region,” Aditya Mittal, president and group CFO of Mittal Steel Company, told in an interview. The world’s biggest steelmaker will also bid for Turkish steel company Erdemir, which is expected to hang out ‘For Sale’ sign in the near future, Aditya said. Mittal Steel announced its merger with the International Steel Group (ISG) only a month ago but Aditya says it can digest more acquisitions without difficulty. “We have built a tremendous franchise in turning around operations. We used to take two to three years, but after having done 14 turnarounds, we have got it down to a science. It now takes us less than six months to significantly improve facilities,” he said.
Source: Other (29.11.2004)

Bulgarian business climate index dropped by 4.6 percentage points in November, according to data provided by the National Statistical Institute (NSI). The sharpest decrease was registered in construction sector, where the optimism for the situation in the next six months fell by 13.4 percentage points. Simultaneously, the expectations for higher inflation rate in the country are growing. Managers in the industry sector also don't forecast improvement of the corporate performance and production activities. In November the business climate index dropped by 1.2 percentage points compared to the situation a month earlier. Retail sector registered pessimism about sales and orders from distributors by a drop of 3.6 percentage points as compared to October. End-prices in retailing are also not expected to grow. Business condition of the services sector showed replacing of the optimism with moderate prospects. Index in the sector decreased by 3.6 percentage points.
Source: Pari (30.11.2004)

Part of the Italian Danieli steel producing line in the Pernik-based Camet plant was sold through a court procedure. The buyer is TeproSteel – a subsidiary of the Greece-based Viohalco-Group. The equipment has been announced for sale by a bailiff in a way to satisfy the Camet creditors’ claims. TeproSteel has been ranked second, the first place held the Pernik-based company Metal Trade. The Greeks have bought the equipment of the company won the auction. The deals’ price will be announced tomorrow. Viohalco has bought only concrete iron mill without the producing capacity and the continuous casting.
Source: Monitor (01.12.2004)

ThyssenKrupp AG, Germany's largest steel company, said full-year profit in fiscal 2004 rose 77 percent as it boosted steel sales, taking advantage of the highest prices in almost two decades. Net income in the year through September rose to 904 million euros ($1.2 billion), its highest ever, from 512 million euros in the previous period, Klaus Pepperhoff, a spokesman for the Dusseldorf-based company, said by telephone today. This is less than the median expectation of 921.5 million euros by 14 analysts surveyed by Bloomberg. Fourth quarter net was 264 million euros, according to Bloomberg calculations. Thyssenkrupp gave no comparative figure for the quarter.
Source: Other (01.12.2004)

Mechel Steel Group, Russia's fifth-largest steelmaker, is willing to spend as much as $2.15 billion on a stake in Magnitogorsk, the country's No. 2 steel mill, at an auction being held next month. The federal government on Dec. 22 will auction 23.8 percent of the voting shares in the low-cost production base in the Urals that smelts 10 million tons of steel a year. In a notice to shareholders posted on its web site, Mechel said it would pay as much as $2.15 billion for the Magnitogorsk stake, almost triple the starting price of $790 million. Alexei Sotskov, a Mechel spokesman, wouldn't give any further information in a telephone interview. Magnitogorsk and Novolipetsk, Russia's fourth-biggest steel producer, have said they will take part in the auction. Mechel is already Magnitogorsky's third-biggest shareholder with a 17 percent holding in the company. Russia's steelmakers, led by Yevrazholding Group, are benefiting from rising demand as the economy heads for its sixth straight year of expansion. Net income at Magnitogorsk rose 56 percent to 15 billion rubles ($516 million) in the year's first six months, as sales jumped 40 percent to 59.5 billion rubles. Export prices for benchmark hot-rolled steel coil from Russia have risen by almost 60 percent since the beginning of the year.
Source: Other (01.12.2004)

Through its subsidiary TeproSteel, the Greek group Viohalco bought a part of the mini-plant for specialty steels Danieli, owned by the bankrupt Pernik-based plant Camet. The price of the deal will be disclosed by the shareholders today. The sale was implemented by a bailiff. This was the eleventh attempt to sell the metallurgical equipment. It was delivered in 1989 for DEM 145 mln. TeproSteel was ranked second in the auction. It bought a part of the Danieli equipment from the company ranked first in the auction – Pernik-based Metal Trade. The price of the deal will be revealed today. TeproSteel bought the long-products mill without the production capacity and continuous casting. The mill will be installed in Stomana Industry. EUR 30 mln will be invested in its final installation. The new company will start operating in 2006. The capacity of the line is currently in the amount of 150 000 t annually. Following the expansion, it will reach 500 000. The new production will help limit imports of metals from Ukraine and Russia, which amount to EUR 150 mln annually.
Source: Sega (02.12.2004)

The Privatization Agency will make its last effort to sell the state-owned Camet-Pernik. The sale of the rolling mill of Danieli line will worsen the parameters of the deal, but the line could still work, as the steel foundry remains part of the Danieli line. Camet has BGN 12 mln of debts.
Source: Pari (02.12.2004)

Largest Russian pipe producer TMK Holding would invest USD 5 mln - 15 mln in Polish steel-tube rolling mill Walcownia Rur Jednosc (WRJ), if it succeeds in buying the Polish company next year, TMK subsidiary Sinara Trading CEO Vasili Makarov told a news conference on Wednesday. "We are interested in purchase of controlling stake in WRJ at a fair market price. Despite of the purchase price the mill would require USD 5 mln - 15 mln investments but the final amount would depend on market conditions," Makarov said. TMK declined to estimate the value of the mill, though it claims that it could launch production in the currently dormant firm within five to eight months. "The acquisition could take place in 2005 and we estimate that the production could be launched in five to eight months, it depends on investments, however the estimates concerning the value of the company is difficult now because we don't know what the mill's owner will offer in the tender," Makarov said. TMK claims that WRJ's production could reach 160,000 metric tons of tubes annually and initially employ 300. Treasury-owned TF Silesia and general contractor Enpol hold more than 60% of WRJ. Other companies, including Ukrainian Donbas, Polish Zlomrex and a German firm, are interested in buying the company. Production at WRJ was halted after it failed to secure financing to complete a PLN 550 mln investment in a steel-tube rolling plant. WRJ needed PLN 78 mln to finish its investment, which was 94% done when it was frozen in February 2002 as creditor banks pulled funds due to conflict-of-interest worries regarding a firm that had been a shareholder of WRJ and a general contractor in the investment. State-controlled entities have since consolidated their holding and the conflict-of-interest concerns have been addressed. The state has also increased credit guarantees. TMK Holding is Russia's largest and the world's second-largest holding in the metallurgy sector. It specializes in pipe production. Its sales revenues total USD 1.5 bln annually. The company owns plants in Russia and Romania but sells its products worldwide.
Source: Other (02.12.2004)

The management of Kremikovtzi JSC flatly denied having hired any other intermediary in its commercial relations with the Marcegalia group, besides its subsidiary Kremikovtzi Trade SP Ltd., which is 100-per cent owned by Kremikovtzi and deals with the material supply and sale of Kremikovtzi’s production. A probe into the company’s archives has proved that since 1996 there has been no intermediary from Monaco in the relations between Kremikovtzi and Marcegalia. We would not like to interfere in any personal or political relations, but we would like to remind that Kremikovtzi was not privatized for USD 1, but against BGN 640 mln debts, which, together with the so-called “hidden debts” reached almost BGN 1 bln. This is the price of the deal. With the current statement, we would like to bring some transparency and clear any vague or unclear information about our relations with the Marcegalia group, which is one of our biggest trade partners.
Source: Company information (03.12.2004)

TeproSteel SPJSC, the subsidiary of the Greece’s Sidenor JSC, has bought a rolling mill for long products, part of the Danieli metal-processing line, the chairman of the board of directors of Stomana Industry, Mr. Atanasios Atanasopulos, said. The Danieli line was bought in 1989 for DM 145 mln and was furnished for the needs of the Pernik-based plant Camet. It consists of a steel-extracting unit, continuous casting and a mill for long products. Eleven abortive attempts for its sale have been made, as most of the candidate buyers intended to export the equipment out of Bulgaria. Mr. Anton Petrov, member of the board of directors of Stomana Industry, which is also a Sidenor subsidiary, explained that on October 13 this year a bailiff from the Pernik District Court announced a public auction to satisfy the claims of the creditor of the plant Eurometal. Only a part of the metal-processing line was put up for sale – the mill for long products. Two companies participated in the auction: the Pernik-based Metal Trade and TeproSteel. Because of the imperfect information available to the management, TeproSteel bid slightly above the initial auction price, which was some BGN 5 mln. Eventually the Pernik company won the auction. This is the reason why TeproSteel bought the equipment from it. Since there was no comprehensive and detailed information on what had been delivered from Italy, Mr. Anton Petrov explained that the company would have to invest some BGN 1.5 mln extra to ascertain which parts of the whole line it had bought. Now cranes and railways are being reconstructed at the expense of TeproSteel for the equipment to be brought out from the platform it has occupied for nearly 15 years. The new mill will be furnished at the site of Stomana Industry. EUR 30 mln will be invested in its final completion and in the construction of new premises. The special steel producing department of Stomana Industry will be re-furnished, the management of the company explained.
Source: Pari (03.12.2004)

TeproSteel, a unit of Greek steel group Viohalco, has paid BGN 5 mln for the long-products mill of Pernik-based metallurgical plant Camet, Mr. Anton Petrov, Viohalco rep for Bulgaria, said on Thursday. The mill, one of the three components of a Danieli technological line warehoused unassembled on the site of the idled Camet, will be installed on the site of the Pernik-based steel plant Stomana Industry which is owned by Viohalco. The new equipment will make possible to increase the capacity utilisation of the thermal calibration workshop, Petrov said. Stomana Industry has slated EUR 30 mln for the installation costs and is looking at EUR 1.5 mln-EUR 2 mln in transportation costs but the sum total of the investment project will be determined only after the equipment is inspected more thoroughly, Petrov said. The equipment, which will allow Stomana Industry to manufacture specialty products like reinforcement steel, is designed for an annual output of 150-200,000 tons but Stomana Industry plans to upgrade that capacity to 500,000 tons. Launch is seen in the first half of 2006. The TeProSteel bid was ranked second at the auction but the Viohalco unit later bought the line from the auction winner for an undisclosed amount. The Danieli line was purchased for 145 mln Deutsche marks in 1989. The equipment was put up for sale as part of the recovery plan for the indebted Camet but none of the sell-off attempts mounted in the past couple of years were successful. Kamet itself is also up for grabs with purchase offers expected by December 22. TeProSteel is one of 13 companies that have bought the information memorandum for the Camet sell-off.
Source: Dnevnik (03.12.2004)

Stomana Industry is to launch a new production of concrete iron and specialty steels by the end of 2006 first half, Mr. Anton Petrov – representative of Viohalco for Bulgaria, announced at a press conference. The Greek group is majority owner of the Pernik-based metallurgical plant. Viohalco, through its subsidiary TeproSteel, has bought the long products mill, which is a part of the steel producing complex Danieli in the Kamet plant. On October 13, a tender was held following a claim made by a creditor of Kamet – Pernik-based Eurometal. The tender was won by Metal Trade. TeproSteel bought the equipment from Metal Trade for around BGN 5 mln, Mr. Petrov explained. The Greek company is planning to invest some EUR 30 mln in the re-equipment and launching of the mill. Its capacity will be raised 2.5 times, reaching 500 000 t annually, versus 150 000 – 200 000 at the moment. The technology will be completely digitalized, Mr. Atanasios Atanasopolus – chairman of the Board of Directors of Stomana Industry explained. Following the re-equipment, the line will become the most modern in Bulgaria. It will produce specialty steel rings, profile iron and concrete iron to the total value of EUR 150 mln. Most of these products are currently imported in Bulgaria from other countries. The new production will contribute significantly to Bulgaria’s foreign trade balance, Mr. Anton Petrov said. It will successfully compete with imported irons. Mr. Atanasopolus said the implementation of the project was a new page in Stomana’s history.
Source: Monitor (03.12.2004)

Pernik-based metallurgical plant Stomana Industry is planning to create 300 – 500 new jobs by the middle of 2006, Mr. Anton Petrov, representative of Viohalco for Bulgaria, announced. The staff will be occupied in the new technological line for production of long steel products and concrete iron. The new production will be launched following the purchase of a part of the Danieli steel line. The technological line will be installed in the Pernik-based company and will expand the renovated production capacity of Stomana Industry. The Danieli equipment has been idle for more than 15 years, left unused on the platform of the Pernik-based plant Kamet. Back in 1989, it was bought from Italy for DEM 145 mln. Viohalco, which is Stomana Industry’s owner, risked and bought the mill. The company’s management is planning, based on its experience and using the services of internationally acknowledged machine building companies, to re-equip and launch a special steel production unit, Mr. Anastasios Atanasopulos, chair of the Greek group’s board of directors, said at a press conference. EUR 30 mln will be invested in the new production, Mr. Atanasopulos added. The investment is aimed at supporting Bulgaria’s local market, which will result in improving the country’s foreign trade balance.
Source: Struma - Blagoevgrad (03.12.2004)

Nissan Motor Co., Japan's second- largest carmaker, may be forced to cut production for a second time in four months because it can't get enough steel, raising concern about the company's supply strategy. Chief Executive Carlos Ghosn said Thursday that the company may cut production by 15,000 units in March, which will trim profit by 6 billion yen ($58.6 million). The Tokyo-based company said Nov. 25 that it would reduce output by 25,000 units this year.
Source: Other (03.12.2004)

Land that was once a concentration camp run by Bosnian Serbs has been bought by Lakshmi Mittal, the London-based steel tycoon and Labour party donor, to reopen ore production there. The deal was in a merger this year that made Mr Mittal boss of the world’s largest steel company. Hundreds of prisoners died during the Bosnian war at the Omarska camp, built on the site of an iron ore mine — one of three in a complex in which Mr Mittal has acquired a controlling stake.Camp survivors and relatives of the dead fear that the development will not show any sensitivity for the land and its history. They have sent letters to Mr Mittal pleading that installations are preserved out of respect for the dead and to help reconciliation between Bosnian Serbs and their victims, Muslim and Croat prisoners. Mr Mittal’s spokesman said last night that he had every intention of carefully considering the sensitivities of the local community. “The mine complex was purchased a while ago and is partly on the area where the concentration camp was. “The company is listening to the needs of a variety of groups and will act on what they say.” Mr Mittal, chairman and chief executive of Mittal Steel, is no stranger to controversy. He was involved in a cash for favours controversy when Tony Blair wrote a letter to the Romanian government to help his purchase of the country's steel industry. He had donated GBP 125,000 to the Labour party.
Source: Other (03.12.2004)

The Finance Ministry's proposal to sell the state's majority stake in Vitkovice Steel was approved by the government Nov. 16. The sale is scheduled for the second quarter of 2005 and experts say the government has chosen the best time to offer the steel operation for privatization. The steel industry is enjoying a worldwide boom and cash-rich steel giants from Russia, Ukraine, Britain and France appear ready to invest in the few producers still available in Central and Eastern Europe. Vitkovice Steel is one of nine remaining state-run strategic enterprises that have yet to be privatized. The group includes Cesky Telecom, power producer CEZ and Czech Airlines; all are slated for privatization. Time to sell The steel industry has been in decline for the past 20 years, with prices dropping an average of 2 percent a year. Dramatic growth in China since 2002 has helped turn the situation around for steel producers. China's appetite for steel has consumed the excess production on the market and is driving prices up. That makes it a good time to try to privatize the country's largest state-run steel producer. Four companies have already expressed interest in acquiring Ostrava-based Vitkovice Steel. Russia's second-largest steel producer, Severstal, Ukraine's Industrial Union of Donbass, France's Arcelor and multinational LNM Holdings have all shown interest in the steel producer. The Czech National Property Fund (FNM), owner of the company Osinek, which controls about 99 percent of Vitkovice Steel, declined to disclose how much the government expects to raise from the sale. The Finance Ministry has said the tender will be held in two rounds. During the first round an interministerial commission comprised of the finance, industry and trade, labor and regional development ministries as well as the FNM and the Czech Consolidation Agency will review the offers and choose those bidders who will best ensure Vitkovice's viability and sustain jobs through 2008. Round two would deliver Vitkovice to the highest bidder from the narrowed field. Rival bidders Breaban said the biggest players in the steel industry have few targets left in Central and Eastern Europe for expansion, which makes competition in the Vitkovice tender high. "We see synergy in this acquisition," said Aleksandr Pilipenko, corporate rights and investment director of the Industrial Union of Donbass. Pilipenko declined to disclose how much the Ukrainian firm was ready to pay for Vitkovice but said the price would depend on what demands the government will make concerning the future of the company. The Industrial Union of Donbass' biggest rival in pursuit of Vitkovice is LNM Holdings, which is part of the world's largest steel concern, Mittal Steel Corporation. "Increasing our presence in the region is in line with our corporate strategy," said Nicola Davidson, LNM's head of communications. LNM Holdings already controls more than 70 percent of the Czech steel market as a majority shareholder in steel producers Ispat Nova Hut and Vysoke pece Ostrava. During the first three-quarters of this year the Czech steel industry's sales reached 95 billion Kc, compared to 65 billion Kc during the same period last year. LNM declined to disclose how much it would potentially offer for Vitkovice Steel. Severstal is reportedly ready to pay as much as $250 million (5.9 billion Kc). The government is keen to sell troubled Vitkovice to a solid investor because of obligations to the European Union. Vitkovice is one of three companies subject to monitoring by the European Commission because it has received state aid. EU rules concerning state aid to the steel sector require companies to provide a plan showing how they will achieve viability by the end of 2006. Failure to develop such a plan results in the company having to repay subsidies. The government handed Vitkovice Steel over to Osinek in 2001 as part of a restructuring of the former socialist company Vitkovice. Since the handover, the North Moravian steel producer, which employs 1,680 people, has faced economic problems. The company's 2003 turnover reached over 9 billion Kc and it produced 1 million metric tons (1.1 million tons) of steel.
Source: Other (03.12.2004)

The Danieli specialty steels production line, which was bought by the Bulgarian state for DEM 145 mln some 15 years ago, will be again put into operation on the territory of Pernik-based Stomana Industry. This will happen in 2006. The company has won he competition for the rolling part of the facility, held in October, offering a price of BGN 5 mln. Another EUR 30 mln will be invested in the installation of the line, the company’s director Mr. Atanasius Atanasopolus announced. The investment will allow the metallurgical plant to produce specialty steel rods used in the automobile industry, concrete iron, set squares. Currently, most of these products are being imported. If the plant works at its full capacity, it will be able to improve Bulgaria’s foreign trade balance with around USD 150 mln annually, Mr. Anton Petrov, representative of Viohalco for Bulgaria stated. The increase of the line’s capacity will create some 500 new jobs.
Source: Trud (03.12.2004)

Stomana Industry has bought Danieli's rolled iron production line, which will be installed in the Pernik-based enterprise. The price of the line is around BGN 5 mln.
Source: 24 chasa (03.12.2004)

A part of the most valuable asset of the insolvent Pernik-based metallurgical enterprise Kamet – the Danieli production line, is already property of Stomana Industry. The BGN 5 mln deal was concluded on October 14, but the winner in the competition for the facility’s sell-off publicly announced it only a few days ago. Stomana Industry has bought the long products casting production line, while the steel production and continuous steel casting will remain in Kamet. On October 13, the mill was offered through tender by a bailiff in order to meet the claims of one of the creditors of the Pernik-based company – Eurometal Ltd. This was the eleventh consecutive tender, organized in the attempt to sell the equipment. This time, the participants were Metal Trade SP Ltd. and TeproSteel SP JSC. TeproSteel is a subsidiary of Sidenor, which is a part of the Viohalco Group, as well as one of the owners of Stomana Industry, together with Eurometal. TeproSteel was ranked second in the auction, but afterwards bought the facility from the winner in the competition – Metal Trade, Mr. Anton Petrov- representative of Viohalco for Bulgaria explained. It is interesting that the owner of Metal Trade – Mr. Dimitar Mirchev Iliev is also a member of the management of the union Sports Club Pernik-Ladimex, together with Eurometal’s owner Mr. Lyudmil Stoykov, according to official information published in the Official Gazette. Mr. Stoykov is the creditor of Kamet, and as a result of his claim, a tender was held. Through Eurometal, Mr. Stoykov is also partner with Sidenor in Stomana Industry. The long products mill is expected to start operating in the first half of 2006, Stomana Industry announced. Until then, at least EUR 30 mln will be invested in the finishing and improvement of the capacity of the facility, the new owners have calculated. “We are not as yet familiar with the machine’s technical state in detail. What we know is that it is not fully electronically equipped”, Mr. Anton Petrov stated. Stomana Industry is planning to construct a new building for its new production on the platform of the Pernik-based plant. Thus, practically, Eurometal will get its money back from Kamet, and Stomana Industry was able to buy the equipment at a symbolic price. Stomana is hoping to be able to get a stable market share on the Bulgarian profile irons market. For the time being, Promet is the only Bulgarian company to produce small amounts of the product, while local consumers import it mainly from Ukraine and Turkey. The annual consumption of concrete iron in the country is some 200 000 t, and this market has a significant growth potential, Mr. Petrov indicated. The Danieli mill’s current capacity is 150 000 t annually, but according to its new owners, following the improvements it will reach 500 000 t. This is not the first time Stomana Industry has bought equipment made by Danieli. Back in 1992, A continuous bloom casting machine worth some EUR 10 mln was launched in Pernik, which was delivered by Danieli as a special order. The current deal is the first successful attempt to sell the Danieli equipment, following 11 previous unsuccessful attempts. The line was bought by Bulgaria back in 1989 for DEM 145 mln., but so far it was idle on Kamet’s platform. In October, PA announced competition for the sell-off of Kamet, and the Danieli equipment is included in the assets of the company to be sold. Offers for the competition can be submitted until December 22. So far, 12-13 sets of tender documents have been bought. PA announced they would inform the candidate-buyers about the changes in the situation. “We have bought documents, but so far, nobody has informed us about any changes”, Mr. Petrov said. Kamet has accumulated some USD 180 mln debts under the Law on Settlement of Non-Performing Loans, as well as another BGN 8 mln in the form of other debts, mostly to the state.
Source: Capital (04.12.2004)

The nuclear power sector remains the key component in Bulgaria's long-term energy balance, the third national report of the Nuclear Regulation Agency reads (NRA). The document will be presented to the International Atomic Energy Agency (IAEA) in April 2005. The report reviews Bulgaria's achievements since 2002 and points out the high level of nuclear safety. The Kozloduy nuclear power plant accounts for more than 44% of the annual electricity production in Bulgaria but after units 1 and 2 were decommissioned in December 2002 the share has fallen to 40.6%. Therefore Bulgaria has taken a decision to develop nuclear energy production both on Kozloduy's ground and on the site at Belene, the report reads. The measures taken to upgrade Kozloduy's units 3 and 4 make the reactors completely safe by IAEA's criteria. That is why last year the NRA licensed unit 3 for another eight years and unit 4, for another ten years. The modernisation of units 5 and 6 will be completed by the end of 2005.
Source: Pari (07.12.2004)

We shall present to the IMF 20 arguments as to why the minimum wage in this country should be increased from BGN 120 to 150, Minister of Labor and Social Policy Christina Christova announced yesterday. The increase of the minimum wage by 25% is provided in the Budget'2005, but the IMF is against it. The most important argument of the Cabinet is that the increase will result in lower unemployment rate. At present, because of the low minimum wage, many people prefer not to work at all rather than to toil for BGN 120 a month, Christova said.
Source: Standart (07.12.2004)

The branch organisations of Bulgaria's ferrous, non-ferrous, chemical and cement industries have rallied against a new ordinance prepared by the ministries of health care, environment and economy which, the companies say, raises the environmental protection bar even higher than relevant EU standards. Some of the pollution standards that would be enforced under the new ordinance are three to five times more restrictive that the existing norms and would force the companies not only to invest in new installations but to replace production technologies, Dnevnik learned from Politimi Paunova, chairperson of the Branch Chamber of the Ferrous and Non-Ferrous Metallurgy. The overly ambitious eco targets found their way into the draft ordinance despite the discussions held with the companies in late November. Ms. Paunova reminded that the now effective ordinance was copied from the German environmental legislation from 5 years ago and that it imposed heavy requirements on the industrial companies. Meanwhile many of them have invested in eco-projects and have met these requirements but because of the new ordinance they will have to start all over again. An example is the investment of Sofia Med in an installation retaining the copper and lead particles. The super modern installation was introduced in 2003 but will prove to be trashy, as the new concentrations allowed are now being reduced from 5 to 10 times. These standards will have to be observed not only by the Sofia-based plant, but also by KCM S.A. (Combine for Non-ferrous Metals) JSC – Plovdiv, Umicore, Lead and Zinc Complex-Kardjali and Kremikovtzi. In the opinion of the companies these heavy environmental requirements are not going to improve the environment but will only make the Bulgarian producers less competitive. The experts explained that many of the plants could avoid the heavy regulations of the ordinance by fighting for higher concentrations in their complex permits. This concerns companies like Agropolichim, KCM – Plovdiv, Stomana Industry, etc. Dimitar Brankov from the Bulgarian Industrial Association said the co-ordination of the new ordinance on the permissible levels of pollutant emission in the ambient air from stationary sources is not over and that the emissions targets for some pollutants could be lowered in the final draft. But the environment ministry said no interaction with the business on the ordinance is forthcoming and that the document will be further co-ordinated only with the other ministries. The concrete demands of the affected companies concern the non-enforcement of the envisaged norms for dust emissions from ferrous alloy production which are six times more restrictive than the existing standard; the companies have also suggested to forgo the cross-industry standard for chlorine concentrations and opt for a case-to-case approach by specifying the target norm in the permit for integrated pollution prevention and control issued to the respective company; the permissible level of nitric oxide emissions should be raised from 350 mg/cu m to 500 mg/cu m to con form with EU standards; and finally, the norm for nitric and sulphuric oxide emissions generated in the wet production of clinker and cement should also be specified in the permit for integrated pollution prevention and control issued to the respective company.
Source: Dnevnik (07.12.2004)

In 2005, occupational accidents and diseases insurance rates will range between 0.4 and 1.1 percent depending on the efficiency of employees' work. The lowest will be the rates for those employed in the fields of IT and education. Miners, metallurgists and construction workers will be charged 1.1 percent. As of June 1, 2005, pensions to be increased by 25 percent of the insurable income growth and 75 per cent of the accumulated inflation rate, the parliamentary Budget committee decided. The increase has been agreed upon with the IMF mission. The Committee adopted the new minimum insurable threshold pertaining to different professions. Managers in the sector of financial mediation will be insured at BGN 630 per month at the least and unskilled workers at BGN 150.
Source: Standart (08.12.2004)

Mechel Steel Group announces that a subdivision of the Ministry of Internal Affairs collected commercial information from its subsidiary, Mechel Trading House on December 6 and 7, 2004. The company is certain that the events are the results of actions designed to prevent the participation of Mechel in the privatization auction of the government's 23.8% stake in Magnitogorsk Iron and Steel Works, due to be held on December 22, 2004. Mechel has protested the actions against the company, organized by potential bidders for the government's stake in MMK, and will continue to avail itself of all legal avenues to defend its ability to participate in the auction. The company notes that it conducts its business in accordance with all applicable legal norms. All of its divisions continue to operate as usual.
Source: Company information (08.12.2004)

World steel makers expect favourable market situation in 2005 and forecast steel price would continue going up for at least another year, Financial Times reported. The general optimism is based on the growing demand in China, where consumption may jump 8 per cent reaching 330.5 mln t in 2005. The world second, third and fourth largest steel companies after Mittal Steel – Luxembourg-based Arcelor and Japane’s JFE and Nippon Steel, almost simultaneously expressed their optimistic expectations for consumption. Arcelor stated it would rise the prices of its long-term contract products with 20 per cent, which would also impact its biggest clients – Peugeot, Renault, and Electrolux. JFE and Nippon Steel are planning to raise their steel prices for the 2005 contracts.
Source: Pari (09.12.2004)

Assarel-Medet, the copper mining and processing company, non-ferrous smelter KCM, the Maritsa Iztok mining complex and copper smelter Elatsite Med have clinched direct electricity purchase deals with thermal power plant (TPP) Maritsa 3-Dimitrovgrad, TPP Maritsa Iztok 2 and nuclear power plant (NPP) Kozloduy, shows the register of the participants in the deregulated segment of Bulgaria's electricity market. The latest bout of deals brings to five the number of power consumers buying their electricity directly from the producers. The price parameters of the deals were not disclosed. Umicore Med, the Pirdop-based local unit of Belgian metals and materials group Umicore, became in mid-September Bulgaria's first power consumer to sign a direct electricity purchase contract after reaching a 291 gWh deal with NPP Kozloduy. The contract expires at the end of 2004 but is likely to be extended. Each of the five eligible power guzzlers has an annual consumption exceeding 100 gWh and no unpaid electricity bills. The Maritsa Iztok mines will purchase 515 gWh of electricity from Maritsa Iztok 2. Bulgaria's State Energy Regulatory Commission has specify the quantities of electricity that NPP Kozloduy, Maritsa 3-Dimitrovgrad, Maritsa Iztok 2 and the TPPs in Varna and Bobov Dol are allowed to sell to eligible consumers at negotiable prices. TPP Maritsa Iztok 3 is not allowed to sell on the deregulated segment, estimated at 150 mln euro in 2004, on account of its 15-year with national transmission system operator NETC which will take effect after Italy's Enel and Entergy of the U.S. complete the rehabilitation of the company. Another 70 local companies with a power intake of over 20 gWh will be granted the status of eligible consumers in 2005. Bulgaria's energy market will fully open to competition in 2007.
Source: Dnevnik (10.12.2004)

ThyssenKrupp has sold its ThyssenKrupp Fahrzeugguss metal car parts business to investor group Electra Partners Europe for an undisclosed sum, the German industrial group said on Thursday. ThyssenKrupp Fahrzeugguss had sales of almost 300m euro (USD399.7m) in '03-04 and employs 1,700 people. ThyssenKrupp said in a statement that the deal, part of its programme to streamline its business portfolio, required board and regulatory approval.
Source: Other (10.12.2004)

No. 5 steelmaker Mechel is in talks with another company to form an alliance to bid for Magnitogorsk, the country's No. 2 steel mill, at an auction this month. Alexei Sotskov, a Mechel spokesman, said Mechel CEO Vladimir Iorich made the statement in a conference call closed to the media. Magnitogorsk and Novolipetsk, Russia's No. 4 steel producer, have said they will take part in the auction. Mechel is Magnitogorsk's third-biggest shareholder, with a 17 percent stake.
Source: Other (10.12.2004)

The US Department of Commerce (DOC), on November 29, 2001 imposed antidumping duty order on certain hot rolled carbon steel flat products imported from Romania. Upon the request of US Steel, DOC on December 24, 2003 initiated administrative review of the antidumping duty order on subject product imported from Romania. The period of review was November 1, 2002 through October 31, 2003. DOC preliminarily determined that sales of hot rolled carbon steel flat products imported from Romania have been made at below normal value in the US.
Source: Other (10.12.2004)

U.S. steel manufacturers and scrap metal firms called on Friday for trade measures against Russia and Ukraine for imposing taxes and tariffs on exports of scrap, the raw material for two-thirds of American steel. "The lack of a level playing field for steel scrap is harming U.S. steel producing and consuming industries," said a joint release from the Steel Manufacturers Association (SMA) and the Institute of Scrap Recycling Industries (ISRI). "Foreign steel producing countries are restraining their scrap exports in order to subsidize local steel production. At the same time, these export restraints distort the world market for scrap," they said. The SMA and ISRI combined forces to lobby Washington to act against trade barriers overseas that they blame for more than doubling the price of scrap in a year. "The combination of export duties or tariffs on exports amounts to trade distorting practices," said Thomas Danjczek, president of the SMA, which represents North American mini-mills that produce steel mostly from scrap. "We are opposed to export controls. Our members benefit from free and fair trade and when you have tariffs, it interferes with the marketplace," said Robin Wiener, president of the ISRI, which represents scrap metal balers, shredders and other companies engaged in recycling steel. Scrap metal, often from automobile plants, is used in arc furnaces to manufacture approximately 64 percent of the U.S. steel output. Although it is lower standard than steel manufactured from iron ore, it uses about one-fourth the energy and is more environmentally friendly to produce. With worldwide demand for steel soaring, especially from industrial growth in China, the steel price has soared in the past year. However, so too has the price of scrap, partly as a result of overseas export tariffs, the SMA and ISRI allege.
Source: Other (11.12.2004)

China will lift restriction for the import of steel, natural rubber, wool, acrylic fibers and veneer as from Dec. 11 of 2004, according to sources with the Ministry of Commerce Saturday. All eligible enterprises can import the five commodities, the sources said. The move was made in accordance with its commitments to the World Trade Organization.
Source: Other (11.12.2004)

Sales in supplying with electricity and heating, gas and water registered a 9.8% decrease in October compared to the situation in October 2003, the National Statistical Institute said. Industry sector marked a 22.8% year-on-year jump, but a fall of 0.9 as compared to September 2004. The increase came as a result of the massive sales rise in the processing industry that came to 27.5% year-on-year, as well as in the extracting industry, where the leap was as high as 27.3%. Sales in the metal production rose by 128.9% in October, against October 2003. Industry production climbed by 14.7% year-on-year, but decreased by 0.2% compared to September. According to data provided by National Statistical Institute, peat and coal extraction showed a 19.6% year-on-year fall. Production of radio, TV and communications equipment decreased by 14.1%, while publishing went down by 8.0%.
Source: Pari (13.12.2004)

Bulgaria's foreign trade balance showed a BGN 3.921 billion deficit for January-October, preliminary data of the National Statistical Institute show. Compared to the year-ago period, the gap winded by BGN 756 million. In US dollar terms, the trade deficit increased from USD 1.791 billion last year to USD 2.456 billion for the first ten months of 2004. Bulgaria's exports totalled BGN 12.803 billion in January-October, up 16.75% year on year. At the same time imports surged 18.35% to BGN 16.724 billion. Most of Bulgaria's exports were destined to the European Union, 59%, with Italy, Germany and Greece accounting for more than half of the EU-bound exports. The biggest importer in Bulgaria was Germany, followed by Russia. Bulgaria exported mainly processed goods, machinery, equipment and vehicles. The leading import items included machinery, equipment, transport vehicles, mineral fuels and lubricants.
Source: Pari (14.12.2004)

Sofia City Court determined 4 companies as creditors of the Sofia-based metallurgical plant Kremikovtzi, lawyer Nikolay Batashki, representing the companies SP Pepo-Petar Rizov, Ray Invest Holding, and Machininvest, announced. During yesterday’s court session, the three companies and SP Bo Engineering claimed over BGN 2 mln of debts. The case was postponed for Monday. Currently, negotiations for out-of-court settlement of the matter are being held. The metal plant said it had filed counter-claims against SP Pepo-Petar Rizov.
Source: Sega (14.12.2004)

Sofia City Court has constituted as creditors four companies, which had filed claims against the metallurgical plant Kremikovtzi. The creditors are SP Pepo-Petar Rizov, Ray Invest Holding Ltd., Machineinvest Ltd., and Bo Engineering SP. The claims are for a little over BGN 2 mln. This happened during yesterday’s court session of the Kremikovtzi insolvency case.
Source: Monitor (14.12.2004)

The end-October loss at non-ferrous smelter KCM was 495,000 levs but will be pared down to 370,000 levs by year-end, executive director Nikola Dobrev said on Tuesday. YTD output of zinc is 85,500 t while that of lead is 53,500 t. Eco costs stemming from the implementation of the permit for integrated pollution prevention and control granted to KCM add up to 35 mln levs.
Source: Dnevnik (15.12.2004)

The Jan-Sept unconsolidated net profit of Sofia-based Kremikovtzi fell 85.99 per cent y/y to BGN 7.52 mln, sapped by a decline in FX gains by 49.8 per cent to BGN 77.12 mln. Unconsolidated net sales rose 18.67 per cent to BGN 655.5 mln in Jan-Sept. The metallurgical company has earmarked BGN 140 mln for investment in 2005 and is betting on a 25 per cent surge in output. Kremikovtzi also intends to retire BGN 95 mln in rescheduled.
Source: Dnevnik (15.12.2004)

The state will grant additional BGN 1.54 million to the Kremikovtzi metal works. The money represents state aid and will be granted to the company from this year to the end of 2006. The funds are intended for redundancy payments and pre-qualification of the workers that will be dismissed this and the next two years, the report of the temporary parliamentary commission, established to investigate the accident in the plant from January 10, 2004, in which 3 workers got killed and other 22 were gassed, reads. Besides these BGN 1.5 million, the state has injected BGN 431.075 million, so the total amount will exceed BGN 432.5 million, the report says. All the money is in the form of state aid. The state commitment was put down in the Programme for Reconstruction of the Steel Industry by 2007. The Programme itself was approved by the Council of ministers in March this year. The document allows Kremikovtzi to cut down the number of its workers from 6,709 to 5,780 in the next two years. This means that the BGN 1.5 million planned will be spent on redundancy payments and pre-qualification of the 900 people fired. The European Commission demanded from Bulgaria to develop the programme for the steel industry in order to close the Competition chapter of the accession negotiations. The document includes a whole section in the form of a plan for development and stabilization of Kremikovtzi. This very plan provides for the possibility workers of the plant to be dismissed so that the company becomes more effective. The BGN 1.5-million grant from the budget was agreed upon with the Commission on Protection of Competition. The anti-trust watchdog ruled that the state aid conformed to the law. The European Commission also permitted the grant as it aimed the stabilization of the company. After Bulgaria’s accession to the EU in 2007, Europe is going to cut the financial aid promised if Kremikovtzi does not invest some EUR 260 million in modernization, MP Ramadan Atalay, chair of the parliamentary commission, said. Europe has promised to grant EUR 4.361 billion to Bulgaria from 2007 to 2010. The commitment of Kremikovtzi was put down in the programme for development of steel industry. It says that the company shall invest EUR 256 million from 2003 to 2007. The money will be spent on the introduction of a continuous steel casting machine, on modernization of one of the blast furnaces and on ecology. If the company fails, Europe will deduct the money from the amount of the financial aid. The alternative is Europe to make us shut down production, the MP said. The EU has already demanded from Kremikovtzi to close nearly one third of its capacity – a blast furnace and mills, because the company has received state aid on its privatization. Kremikovtzi made no comment on the report, as it has not received it yet. The company has infringed three laws and seven regulations of the labour legislation. The report says that instruments with high voltage safety shanks were lacking in the plant. In 2001, 150-200 tons of fused cast iron ran out from one of the blast furnaces because of a break. Industrial injuries rose from 59 in 2000 to 73 last year. The report does not say whether the company was fined and whether it has paid the fines.
Source: Monitor (15.12.2004)

Dutch firm Ispat said on Wednesday that a shareholders meeting had approved the acquisition of LNM Holdings, part of a deal that will create a new global steel giant. The company said in a statement that the meeting had also approved the appointment of Vanisha Mittla Bhatia to the board of the new combined company, which will be named Mittal Steel. Mittal Steel will trade on the New York Stock Exchange and Euronext's Amsterdam bourse under the ticker symbol "MT", the company added.
Source: Other (15.12.2004)

Local steel plant Promet Steel JSC, part of the international Steel Neva Consortium, and Voestapline AG will sign by the end of the week a USD50 mln contract for the delivery by the Austrian of a continuous casting furnace, supervisory board chairman Penyo Donev said. The production component of the installation will be completed by 2007. A line for the production of wire rod will be added as soon as 2006. The new furnace will allow the company to achieve its top annual capacity of 800,000 tons. 2004 year-end output is seen at 320,000 tons, up from 128,000 tons in 2003 and 50,000 tons in 2002.
Source: Dnevnik (16.12.2004)

A three-member panel of the Supreme Administrative Court (SAC) ruled out the transmission charge, which the privileged consumers and the electricity distributing companies pay to the National Electricity Distribution Company (NEC), as unlawful. The magistrates ruled that the decision of the State Commission for Energy Regulation (SCER) on the increasing of the charge was ungrounded. It is paid by the electricity companies and the privileged consumers and is included in the price of the electricity for the final consumers. The Court found there was no grounds for the costs of maintenance of the capacities ready for switching in the energy system of Bulgaria to be included in the charge. In June 2003 the charge was raised from BGN 6 to BGN 11.80, VAT not included, before the opening of the energy market, announced by the regulatory commission. The charge was challenged by Stomana Industry, the Branch Chamber of Ferrous and Non-ferrous Metallurgy, KCM and Elatzite-Med. The three companies were labeled as privileged consumers, which allows them to agree directly with the power plants, as they have to pay a transmission charge to the NEC. Six companies have signed direct contracts with TPP Maritza 3, TPP Maritza-Iztok 2, NPP Kozloduy and TPP Varna so far. KCM, Umicore, Elatzite-Med, the mines Maritza-Iztok, Agropolichim have taken advantage of the free agreement. These agreements contribute to 1 percent of the opening of the market versus a legally fixed 26 percent. The SCER will litigate the SAC’s decision and will explain why the maintenance costs shall be included in the transmission charge. The NEC commented that it would suggest the increase again because the current charge did not cover its costs.
Source: Dnevnik (16.12.2004)

Hundreds of workers have seen a threat to their jobs lifted after a deal to secure the future of a steel plant. Last year Corus announced it no longer needed slab steel from its Redcar plant, casting doubt on the future of the site and about 1,700 jobs. The plant was refocused as a slab exporter and has been selling its steel on the international market. Corus has now signed an agreement with a consortium of re-rolling companies to supply slab under a 10-year contract. Under the agreement, which is effective from 2 January 2005, the consortium will take slab production in 2005 and 2006 that is surplus to Corus' internal requirements and then about 74% of output from the end of 2006. The companies in the consortium are Italian/Swiss-based Duferco, Marcegaglia from Italy and Mexican steel producer Imsa. Korean-based Dongkuk also has the right to join. The consortium will pay Corus GBP 35.4 m (USD 69 m) as an upfront payment in 2005/2006 with a further GBP 40.6 m (USD 79 m) in deferred payments over the life of the contract. It will contribute about 72% of the expected GBP 51 m (USD 100 m) needed for site improvements.
Source: Other (16.12.2004)

The division of the US steel giant US Steel in Koshice, Slovakia, is planning to invest USD 200 mln in a new line for production of metals for the automobile industry, the president of the subsidiary, Christopher Naveta, said. If the parent company approves the project, which is expected to happen at the beginning of next year, the construction of the site will begin immediately. The idea is it to start working with the opening of the two new car plants in the country – those of Kia Motors and PSA Peugeot Citroen, which are expected to start within three years. Besides the main investment, some of the equipment will undergo additional modernization. US Steel’s ambitions are to export metals to the neighbour countries – the Czech Republic, Poland and Hungary. PSA Peugeot Citroen has invested over EUR 700 mln in a new plant in Trnava. The company is planning to start making 300,000 cars a year by 2007. Kia/Hyundai Motors is to build its plant in the town of Zilina in Northwest Slovakia by the end of 2006. Output will start at 200,000 cars, and if the market is favourable, it will reach 300,000 vehicles. US Steel has invested some USD 170 mln, which complies with its commitment to invest USD 700 mln within 10 years. Most of the money has been spent on environmental projects and equipment. From 2007 on, Slovakia will be the biggest car producer per capita. Besides Peugeot Citroen and Kia, Volkswagen also has a plant in the country. The total output of cars will stand between 800,000 and 900,000.
Source: Dnevnik (17.12.2004)

Severstal's offer this week of $600 million for a 60% stake in the family-owned Italian steelmaker Lucchini has not come as a surprise to Russian or western steel industry sources who know the appetite of Severstal's owner, Alexei Mordashov. According to Italian press reports -- quietly confirmed by Severstal itself -- the third-ranked Russian steelmaker, owned by Mordashov, is in negotiations to acquire the stake from the Lucchini family, and if the deal is consummated, will take control of the plant while leaving the Lucchini family with a 30% stake; investment funds and others will hold the remaining 10%. No deal has yet been struck, Moscow metals analyst Rob Edwards said. According to Maxim Matveyev of Alfa-Bank, "since the news is only preliminary and fails to reveal important details, we will wait for official clarification." Lada Astikas, spokeswoman for Severstal's international operations, hints that negotiations with Lucchini are being conducted through Mordashov's personal representatives, not through the steel group. She told Mineweb: "The first information we got from the Italian wires, but I am sorry to tell you that we are not commenting on [the Lucchini] question. It's the usual practice for our company not to speak at the preliminary stage of processes." A London steel banker told Mineweb that the published terms suggest the deal could be highly unstable. "Can we really imagine the [Lucchini] family still holding 30% but releasing management control to the Russians -- that smacks of a feud in waiting." He and most industry analysts concede that, if the deal proceeds, it will provide Severstal with a substantial presence inside the European Union, the principal destination for its exports; and would help Severstal slip around EU import quotas on Russian steel. Lucchini produced 2.9 million tonnes of steel last year. It has several rolling mills in different EU countries, and leads the field in special long products. Severstal is a flats specialist. Last year, Lucchini booked US$1.05 billion in sales, but lacking its own iron-ore and coke, it suffered a net loss of $178.8 million. Severstal could begin to supply Russian iron-ore and coking coal, but not in large volumes. "The acquisition of Lucchini may go some way towards solving the problem that Severstal faces with regards to EU quotas on imports of Russian steel," Edwards suggests. Mordashov's personal ambition to build an international steel empire, beyond the Kremlin's ability to control and tax, is also a major motive in the deal, offsetting the relatively high price he is proposing for the assets, compared to their European peers. On the other hand, it is relatively cheap. Two months ago, Mordashov was considering an offer of up to $1.2 billion for the bankrupt Canadian steelmaker Stelco, and in June, he bid the same amount for the state stake of Ukrainian steelmaker, Krivorozhstal. He lost both contests to local favourites. In October, Mordashov said at a steel conference in Istanbul that he envisages "a situation in the steel industry where within a few years four to six companies each had a capacity of about 100m tonnes of steelmaking per year. We would like to be among those companies." Although western bidders for Stelco currently appear to have the upper hand, and to be favoured by the Canadian management, Severstal has not given up on Stelco yet. Sources close to the company claim that an agreement has been signed allowing Severstal to conduct due diligence on Stelco. The end of January is believed to be the time Severstal will decide what detailed offer to make, or whether to pull out. Bank estimates indicate that Severstal currently has $1.4 billion in cash on its balance sheet with which to pursue acquisitions. Vitkovice Steel of the Czech republic has also been a target this year.
Source: Other (17.12.2004)

Ukrainian Cabinet of Ministers made the export of iron ore procedure more difficult from Ukraine. This issue is discussed in the commission acting Prime Minister Nikolai Azarova. The export of iron ore will be depending on the licenses given by the Minister of Economy from December 1, 2004 or given out earlier, but only after preliminary survey done by the Ministry of Economy during December. These measures are taken in order to protect the domestic iron ore producers and Ukraine as a whole because Ukrainian iron ore is exported on the prices which are lower than international prices. Accordingly, Ukraine announced the rates of export customs duty for ore agglomerating as ˆ10 per ton, for concentrate iron ore as ˆ15 per ton and for pellets and iron ore as ˆ20 per ton. Because of the lower export prices, Ukraine recorded less income in the eight months of the year.
Source: Other (17.12.2004)

The executive director of Stomana JSC received one year suspended sentence. The Pernik District Court sentenced Spas Hristov to pay BGN 500 for abuse of administrative authority.
Source: Standart (20.12.2004)

Bulgaria's GDP posted a real growth of 5.7% in the first nine months of 2004 in comparison with the year-ago period, the National Statistical Institute (NSI) said on Monday, December 20. The Bulgarian economy expanded by 5.8% year-on-year in Q3 alone. The keep the economy cooking at this rate, the government will have to persevere with the tax cuts and decrease the amount of resources reallocated through the budget, Dimitar Chobanov from the Institute for Market Economics. The value added generated by the Bulgarian economy in January-September rose 5.7% year-on-year to 24.031 bln levs. The gross value added - the value of output less the value of intermediate consumption, increased 5.5% year-on-year in the third quarter. Services contributed 54.2% of value added generated in Q3, up from 52.5% from a year earlier. The industrial sector posted a 1.7% increase in value added while construction managed a 7% growth rate. The value added generated by the farming sector in Q3 was up 5.3% year-on-year. The difference between income derived from credits by the financial institutions and the interest payments made on deposit accounts has increased by 30% from the year-ago period, said the NSI. The food industry, paper and pulp and the metallurgical sector also doing well, the statisticians said. Not so for the production of electricity and heating energy where output has tumbled by some 20%, a trend that could be ascribed to the improved energy efficiency of the economy. The share of value added created by the public enterprises fell 9.1% in real terms to 19.1% in Q3 while that of the private sector rose 9.7% to 80.9%. The GDP share of individual consumption was reported at 67.6%. The real growth of investment (gross fixed capital formation) was 12% in Q3 while its GDP share was 18.6%, said the NSI.
Source: Dnevnik (21.12.2004)

Analysts in KCM JSC expect another three hard years ahead of Europe’s non-ferrous metallurgy. And they are ready to face them. According to the head of the group’s commercial department Ms. Aneta Panayotova, non-efficient companies, making lead and zinc will be closed in Europe, because the prices of these metals are growing at slower rates than the prices of the materials they are made of. Adding the growing energy prices and the weak USD, it would be no surprise if even a lucrative company such as KCM starts suffering losses, though insignificant, from its core activity. By the way, stagnation in the branch has a positive side as well. The Bulgarian non-ferrous leader may be transformed into a concern of European significance, especially in the field of lead, zinc, cadmium and gold recycling. Actually, this should happen, if the company wants to survive among the competition of the Asian giants. KCM’s own raw material base is, of course, something that each metallurgical company dreams to have. KCM 2000 JSC already holds a concession for exploration and possible processing of polymetal ores, including wolfram. The company also intends to buy working and closed mines in Turkey and Serbia.
Source: Maritza dnes (21.12.2004)

Between EUR 10 and 12 billion are necessary for the renovation of the hazardous productions in all Bulgarian companies, the director of the Bulgarian Industrial Association, Mr. Kamen Kolev, said yesterday. Metallurgy, mining and chemical industry, where the equipment averages 40 years, need the most considerable investments in labour safety. Estimates show that in the chemical industry alone EUR 2 bln are needed for equipment renovation, Mr. Kolev explained. None of the 56 major chemical companies, which include some 200 hazardous productions, meet the legal labour safety requirements. The renewal of the machines will burden companies in the short run, but after a time they will save money from labour accidents. Occupational accidents fell by 17 percent in 2003 and the trend during 2004 has been similar.
Source: Monitor (21.12.2004)

The Russian government, which is tightening its grip over the country's oil and gas companies, will exit the steel industry with an auction of its remaining 23.8 percent stake in Russia's second-largest steelmaker. OAO Magnitogorsky Metallurgichesky Kombinat may attract bids of as much as $1.3 billion in tomorrow's auction, said Alexander Pukhayev, an analyst at United Financial Group in Moscow. The government is seeking at least $790 million, the Federal Property Fund said in a Nov. 19 statement. ``The timing for the sellers is excellent,'' Vasily Nikolaev, an analyst at Moscow-based Troika Dialog, said in a telephone interview. ``We're at a high point in the price cycle and there is no consensus that prices are going to fall soon.'' Russian steelmakers, led by Moscow-based Evrazholding Group, are benefiting from rising prices and demand as the economy heads for its sixth straight year of expansion. Demand from neighboring China, the world's biggest steel producer and user, also is booming as the economy grows and the country builds stadiums for the 2008 Olympics in Beijing. Potential buyers of Magnitogorsk-based Magnitogorsky, which made the steel for half of the Soviet tanks in World War II, include the company's managers, Moscow-based Mechel Steel Group and OAO Novolipetsk, a Lipetsk, Russia-based steelmaker controlled by Vladimir Lisin, Russia's seventh-richest man, according to Forbes.
Source: Other (21.12.2004)

The list of enterprises in which the Bulgarian state's shares will be sold for compensatory instruments was published in Tuesday's issue of the Official Gazette. The list includes 60 companies, 100% of the capital will be offered in seven of them. There are also seven companies in which the state will sell stakes. The biggest shares are offered in Vidachim (25.09%) and Stomana of Pernik (75%). The share in the Bulgarian Telecommunications Company (BTC) that is earmarked for divestiture has been increased from 20 to 35%. The list, however, does not include Navigation Maritime Bulgare and Boyana Film. The state will put for sale shares in several ordinance plants as well: 35.75% of Arsenal of Kazanlak, 20% of VMZ of Sopot and 20% of Teraton. Experts comment that the companies are not in a very good condition and will hardly enhance trade. Unsettled licensing rights and payments will additionally reduce the interest in Arsenal and VMZ. As a whole, market players say the list is good news. After BTC is sold, the prices of compensatory instruments will decline slightly. However, the new list will prevent a substantial drop of the instruments to their previous level of 25% of par. Meanwhile Tuesday compensatory instruments reached a fresh high of 85%, and registered vouchers even hit 86%. The trade volume amounted to BGN 4.4 million, as only two buyers purchased instruments: Economic and Investment Bank and First Financial Brokerage House.
Source: Pari (22.12.2004)

A new world record in steel production was set up in 2004. This is the first time the world produces one billion tonnes of steel in a single year, the International Iron and Steel Institute reported. In 2003 world output of steel stood at 968.3 million tonnes, 220.1 million tonnes of which were produced in China. Now demand for steel is soaring as the needs are growing.
Source: Monitor (22.12.2004)

A total of four companies (two of them Bulgarian and two foreign) have submitted preliminary offers for the privatization of the Pernik-based metallurgical company Kamet. The companies are E.T.E. European Trading Energy GMBH, TeproSteel, TrueForge Global Machinery Corp., and Albena-Transstroy. The Danieli production line has been removed from the company's assets - a few weeks ago it was sold for BGN 4 mln.
Source: Standart (23.12.2004)

Russia sold yesterday the last 17.84 percent it owned in Magnitogorski Steel Works (MSW) – the country’s biggest steel maker – to the Cyprus-based company UFGIS, the world agencies reported. U.F.G.I.S. Trading bid USD 790m (EUR 605m), which was the initial selling price. The bidding step was USD 2m, France Press cited the Federal Antitrust Service of the Russian Federation. According to the NEWSru.com website, U.F.G.I.S. Trading is a Cyprus offshore company, which screens the interests of Magnitogorski Steel Works. Three foreign companies appeared among the 13 bidders – the Cyprus-based Miroglior Holdings Limited, considered to be a vehicle of the Russian interests, Inter-Rail Transport, representing Canadian investors, and Little Eco, a faintly known US group, France press reported. Russia’s sixth biggest steel company Mechel was rumoured as the certain winner of the bidding, as the experts thought it wanted to increase its 16.5-percent stake in MSW. According to NEWSru, Mechel gave up the race for the stake in MSW, after selling its own 16.5-percent stake for USD 780m to U.F.G.I.S. Trading as well. The sale made the Russian analyzers think that the MSW’s managers have thus won the fight for the steel works, as they had controlled till then only 60 percent of MSW. Mechel have got USD 90m more for its withdrawal from the race, NEWSru said.
Source: Monitor (23.12.2004)

Capital expenditure, envisaged by 2005 budget, came to BGN 1.598 billion, up by 20% compared to 2004. They represent 3.9% of the country's GDP, which has been the highest figure since 1996, finance minister Milen Velchev said. Bulgaria allocated BGN 12.6 million to capital expenditure in 1996 which then represented 0.7% of the country's GDP. The main projects to be financed by the budget next year are the second bridge over the Danube river, the Plovdiv-Svilengrad railway and the Sofia airport. The Lyulin highway is also on the agenda if no additional obstacles appear. The project has been greenlighted by Brussels already. In terms of public expenditures, for the first time education will be third next year with 11% of the consolidated spending programme. It is preceded by social security (34.2%) and defence and security (12.7%). As a whole, public expenditures will increase by BGN 200 million. Revenue is projected to rise 13% to BGN 16.173 billion.
Source: Pari (23.12.2004)

Four companies have filed tentative offers for 94,515 shares (100% of capital) in Kamet of Pernik, Bulgaria's Privatisation Agency (PA) said. By Wednesday's deadline offers were submitted by E.T.E. European Trading Energy GmbH, Tepro Steel of Sofia, TrueForge Global Machinery Corp. and Albena - Transstroy of Sofia. After reviewing the documents, the PA will name the candidates that will be admitted to the final stage of the tender. At the request of the Agency for Government Claims, the Pernik district court has resumed the insolvency case against Kamet. Hearings are scheduled for December 29, 2004.
Source: Pari (23.12.2004)

TeProSteel, a unit of Greek steel group Viohalco, E.T.E. European Trading Energy GmbH of Germany, Swiss TrueForge Global Machinery Corp. and Sofia-based Albena-Transstroy SPLTD filed on Wednesday, December 22, indicative offers for the 100% acquisition of the Pernik-based metallurgical plant Kamet. The Privatization Agency will review the offers and tap the candidates that will advance to the next stage of the sell-off competition. In related news, acting on a request from the State Receivables Collection Agency, the Pernik district court has renewed an insolvency case against Kamet. The court has scheduled a hearing for December 29. TeProSteel paid BGN 5 mln in early December for Kamet's long-products mill. The mill, one of the three components of a Danieli technological line warehoused unassembled on the site of the idled Kamet, will be installed on the site of the Pernik-based steel plant Stomana Industry which is owned by Viohalco.
Source: Dnevnik (23.12.2004)

Despite the initial expectations for a 5.3% growth of the Bulgarian gross domestic product this year, finance minister Milen Velchev said the growth rate would reach 5.5% on the 5.7% increase generated for the first three quarters of the year. The country marked a 4.1% improvement in 2001, 4.9% in 2002, and 4.3% for 2003. Because of the unknown crud oil prices in 2005, the forecast for the economy trend in the country envisages either 5.0% growth or 5.6%. The GDP growth will rise because of the certain tendency for decrease in the crude oil prices, Velchev pointed out. 'Our policy does not target an interim high improvement followed by a crisis, but a steady rise in the future,' finance minister pointed out. The country will have a break-even budget for 2006 and a budget with envisaged surplus for the first time in 2007, he added.
Source: Pari (27.12.2004)

Russia and the European Union have agreed in full upon a steel trade agreement, Viktor Kalmykov, deputy director of the Russian Economic Development and Trade Ministry's Trade Negotiations Department, told Interfax. "The text of the deal has been agreed upon in full," Kalmykov said, adding that the deal would expire on December 31, 2006, or until Russia joins the World Trade Organization (WTO). Kalmykov Russian manufacturers would have a quota to ship 2.217 million tonnes of steel to Europe in 2005, compared with 1.8 million tonnes in 2004. It is thought the quota will be relaxed another 2.5% in 2006 to 2.273 million tonnes. Kalmykov said the signing process would be lengthy, and that the agreement might not be signed until the end of the first quarter of 2005.
Source: Other (27.12.2004)

Steel makers in Germany expect production to rise to a new record of 47 million ton in 2005, beating this year's output of 46.5 million ton in the face of booming worldwide demand, the German steel makers' federation said on Monday. The increase would remain only modest because steel makers in Germany were already operating at 98 percent of capacity, federation chief Dieter Ameling said. Raw material prices were also expected to rise, Ameling added.
Source: Other (27.12.2004)

The European Union and Canada have recently announced that they will cooperate to ensure the maximum effect of sanctions they plan to impose on $4 billion worth of US goods on the condition that the US tax law continues not to meet EU requirements. As previously reported, the World Trade Organization ruled that US Foreign Sales Corporation Tax Legislation was illegal. Upon the ruling of WTO, the EU imposed initially 5% duty on US goods such as steel and textiles in March. The initial duty has been increased by 1% in each month and has reached to 14% in December. The EU announced that these duties will expire on January 1, 2005 following the repeal of the law in October. However, the remaining subsidies under the US law pose a problem to the EU. Unless they are lifted, the EU will ask WTO to reimpose the duties on about 60% of the $4 billion in US exports. Moreover, last month the WTO gave an approval to the EU, Canada and six other countries to impose punitive tariffs on US goods. The value of the sanctions has not been revealed, however it is stated that they may exceed $150 million a year.
Source: Other (27.12.2004)

Business climate index dropped by 4.7 percentage points month-on-month in November, falling to 24.1 points, according to a survey carried out by the Agency for Economic Analysis and Forecasting (AEAF). Worsened undertakers' expectations for the next six months caused a drop in the industry climate index of 1.2 percentage points. Nevertheless, except for the services sector, all indices show better figures as compared to November 2003. Services sector indicator marked a 4.3 percentage point drop year-on-year and a 4.0% fall compared to October 2004. Competition in the sector as well as the uncertain economic situation have been pointed out as the main problem here. The development is hindered mostly by the insufficient internal demand, businessmen said. Retail sector showed a decrease of 3.6 percentage points over a month, still the index was by 5.3 percentage points higher than a year ago. Both assessment of the present-day business situation and expectations for the next six months have worsened. After the business climate index in construction marked an outstanding jump in October of 13.3 percentage points, it went back in November by the corresponding 13.4 percentage points. The main reasons were forecasts for the next six months, as seasonal factors have great impact on the situation in the sector. November is traditionally one of the months when undertakers have the lowest expectations, AEAF's survey showed.
Source: Pari (28.12.2004)

Mr. Ivan Yordanov Mihailov is the new Ministry of Economy’s representative in the Supervisory Board of Kremikovtzi. The decision was adopted at the today-held (December 28, 2004) extraordinary general meeting of the shareholders of Kremikovtzi JSC. The former state representative in the company’s management – Ms. Detelina Krasteva, is no more working in the Ministry of Economy and that is the reason why she vacated the company’s Supervisory Board. The shareholders elected Deloitte & Touche for company’s auditor for 2005.
Source: Company information (29.12.2004)

Today ten local companies will be given complex permits by Bulgaria’s minister of environment and waters Ms. Dolores Arsenova. The documents are issued to be applied in the production of the best available technologies. The objective is to prevent and control environment pollution. They are issued following EU requirements. Some of the companies to receive permits are Orgachim-Rousse and Nova Plama – Pleven, the chemical fertilizer plant Agria – Plovdiv, the pharmaceutical company Balkanpharma – Dupnitza, sanitary faience maker Vidima – Sevlievo. Until the end of 2007, all complex permits for active installations under the Environment Protection Act will be issued. 23 companies have already received such permits. Some of them are KCM – Plovdiv, Lukoil-Neftochim Bourgas, Balkanpharma – Razgrad, Balkanpharma – Troyan, and Neochim – Dimitrovgrad.
Source: Pari (29.12.2004)

US steel giant Nucor will be one of the candidates in the auction for the privatization of 99 per cent of one Europe’s leading rolled steel product makers – Czech Vitkovice, Interfax reported. The auction will be organized in two stages, the first one to take place on January 6 2005. Some of the other candidates are Arcelor, LNM Holdings, US Steel, Severstal, etc.
Source: Dnevnik (30.12.2004)

In December the total index of the business climate in the country dropped by 0.9 percentage points as compared to the level a month earlier, the National Statistical Institute, said. The business climate in construction index rose by 0.8 percentage points this month due to improved expectations for the business situation in the next six months. Constructors forecast no price increase in the sector. The complex business climate in retailing index marked a 3.9 percentage point fall in December on decreased optimism in the assessment of the present-day situation, as compared to November.
Source: Dnevnik (30.12.2004)

In the current hi-tech era, producing concrete iron and sheet iron seems a bit old-fashioned. Last year, however, metallurgical plants worldwide became gold mines for their owners. 2004 was called the year of “heavy metal” because of the high iron prices. Reinforcement steel price reached BGN 940/t in Bulgaria, which is almost two times higher than its level in the end of 2003. The price of iron, imported from Ukraine hit USD 550/t, while sheet iron reached levels of around USD 630/t. Severe metal demand throughout the world raised the value of steel producing capacities, therefore even aged plants such as Kremikovtzi stepped firmly on the map of world investors. Five years ago, the plant was privatized against USD 1. Nowadays, it is expected to be sold against millions to the Indian group Mittal. Of course, no one can tell whether the Indian billionaires will become owners of the former pearls of local metallurgy. What is certain, however, is that this will be one of the hottest plots in the coming year. The processes ongoing in the other center of local metallurgy – Stomana Industry, where the Greek company Viohalco is implementing a massive investment programme, are also very interesting. After investing some EUR 60 mln in the modernization of the plant, the company also bought a specialty steel production line, which is expected to produce a 500 000 output of concrete iron and high-quality rolled iron. The new investment is in the amount of EUR 30 ml. The investment itself is a sign that Bulgarian business will continue to grow in 2005. The reason for the boom The main reason for the jump in steel prices worldwide is the growing Chinese demand. Millions tons of steel are consumed in China annually, being turned into factories, buildings and bridges. Nowadays, the whole world is working for China. It will be a disaster, however, if Chinese demand fades. Then upsurge can suddenly turn into a crash for tens of metallurgical plants worldwide. At least so far, however, forecasts are optimistic – 2005 is expected to be no worse for producers, including local ones. This year, the three main units of local ferrous metallurgy – Kremikovtzi, Stomana Industry and Promet, have produced a total of 2 mln t of steel. 90 per cent of them have been exported to China, EU, USA. Around 200 000 t are sold on the domestic market, but local consumption is expected to grow with a view of the boom in the building of houses, hotels and hypermarkets. Growing local consumption is also a result of the revival in building and repair of ships. A lot of metal will be used in the building and repair of big infrastructures – Danube Bridge 2, and Tzankov Kamak dam lake, Mr. Rosen Popov, director of Stomana Industry’s Domestic Market department commented. The positions of the USD is getting weaker, while gold is getting stronger. The reasons for the growing prices of gold and copper are a bit different. The high price of gold, which was only USD 255/tr oz., and has currently hit USD 450, is due chiefly to the weak USD. This is an iron dependence, which his known by everyone, working in the field of non-ferrous metal trade. They also know, that when the USD is going down, the prices of the precious metal are going up. Therefore 2005 is expected to be a good year for all world gold producers, including Bulgaria’s Chelopech Mining. The ambition of the owner – Dundey Precious Metals, is to produce golden bars here, because so far the golden-copper concentrate was exported and processed abroad. Copper prices were also high last year – it was traded at USD 3200/t at LME. Non-refined copper was among Bulgaria’s Top 10 most exported products for 2004. A chance for local companies Will local producers take advantage of the price tsunami, which is about to sweep all records? There are two options – profits to be eaten and many plants to turn out unprepared for our forthcoming EU accession. The other option is to use the increased sales revenues, as well as EU funds, to bring local capacities in compliance with EU standards. Until 2007, they will have to invest a lot of money in ecological projects, in order to meet the high requirements. If they do not do so, a big part of the Bulgarian metallurgical companies will be forced to close down despite the good situation on the international markets. Ferrous metals are not leading the top list of best traded Bulgarian products in 2004, but their growth is also significant. In 2003, for example, local plants have sold flat rolled products for BGN 99 mln, versus BGN 176 mln this year. The jump in exports of non-refined copper, which has been number one in local exports since 2001, is almost double.
Source: Trud (30.12.2004)

Aluminum and copper hit significant price highs last week, riding on the wave of the funds’ rousing. For two days in a row, aluminum was registering highest values for the past nine years and a half and on Wednesday it settled at USD 1915/t, going up USD 40/t in one day alone. In the middle of October, aluminum was traded at USD 1690/t. Copper reached levels of USD 3138/t, compared with levels of some USD 2660/t three months ago. Fund buys were stimulated by this week’s news, that China intends to remove export relieves and to introduce high export fee next year, in order to restrict big exports of the metal, which production is related to high power spending. “Liquidity is very low and prices easily go up, and the funds know that”, Mr. John Camp from Sempra Metals commented. Lead, zinc, tin and nickel also moved up.
Source: Capital (30.12.2004)