Turkey raises import duty on steel products Turkey has increased import duties by up to eight percentage points on coated and uncoated strip mill products with effect from January 1. The move is seen as benefiting local producers, as well as exporting countries with which Turkey has a free trade agreement. For hot rolled coil the import duty is now 13 per cent, up from the previous five per cent; CRC goes up from six to 14 per cent; pre-painted is 15 per cent, up from the previous 12 per cent; and for hot-dip galvanised the duty rises to 15 per cent from 14 per cent. The HRC import duty for re-rollers is five per cent, up from the previous three per cent. Turkish producers and traders think the changes will be to the advantage of Erdemir and other local producers. Chairman of Kayseri Metal Centre (KMC), a Turkish steel service centre and cold roller, thinks Erdemir will be the star of 2009 in Turkish flats market. (Emirates Business 24/7)
Source: Other (04.01.2009)

China's copper consumption to hit 5.4 million mt by 2010: Antaike China's copper consumption is expected to hit 5.4 million mt by the year 2010, up from an estimated 5.1 million mt in 2009, an official with Beijing Antaike, the state-owned nonferrous metals information provider said. Despite the global financial crisis having weakened the Chinese domestic economy, lowering Chinese domestic demand for copper from the air-conditioner, refrigerator, as well as copper processing industries, Chinese copper consumption is still expected to rise by 2010 due to strong demand from the domestic power network construction sector, the Antaike source said. Antaike noted that the Chinese government's reconstruction plans in the next few years after the Sichuan earthquake that took place in May 2008 would also support future Chinese domestic copper consumption. Figures from China's National Bureau of Statistics showed that China produced 3.41 million mt copper during the first 11 months of 2008, up 10% from the corresponding period in 2007. (Platts)
Source: Other (04.01.2009)

The new investor in Kremikovtzi will be clear in the beginning of January? The investor in the metallurgical plant Kremikovtzi would probably be clarified in the beginning of January, the assignee in bankruptcy Tsvetan Bankov said. As for the moment, talks with Brazilian giant CSN and Ukraine-based Smart Group are being held. However, Bankov did not confirm the information that CSN has offered USD 400 mln. ‘Both candidates are in Bulgaria in relation with the possible deal in Kremikovtzi. A sale of the plant is impossible from legal point of view for the time being. The insolvency proceeding makes no provision for a sale at this stage’, Bankov added.
Source: econ.bg (05.01.2009)

Hismelt experimental pig-iron plant suspended Rio Tinto has suspended operations at the Hismelt joint venture pig-iron plant near Perth for three months. According to the company, it is hoping this will allow it to weather the economic downturn. The 150 workers at the plant have been put on leave with full pay over the suspension period. Pig iron now costs more to produce than what it fetches on the market. Starting 22 December, Rio Tinto shut down all its iron ore mines in the Pilbara region for two weeks, as demand from steel mills declined. This move reduced the miner’s iron ore output by around 10%. The Hismelt plant is a joint venture by Rio, Nucor, Mitsubishi and Shougang. It uses a new process where raw materials and non-coking coals are directly injected into a molten iron bath to produce high quality pig iron. (MetalWorker)
Source: Other (05.01.2009)

Chinese steel majors set conservative targets for 2009 At least six Chinese large and midsize steel companies have released their operating targets for 2009 with most looking forward unchanged output or a moderate rise over 2008. Jiangsu Shagang Group has plans to produce 23 million tonnes of steel. The company produced 21.37 million tons of steel in the January to November of 2008. The state owned Maanshan Steel Company set the 2009 focus on product quality and internal management instead of production expansion. It aims to produce 15 million tonnes of steel, 14.18 million tonnes of steel products for the coming year compared to the expected 15 million tonnes of steel and 14 million tonnes of steel products in 2008. Hebei Iron & Steel Group made a bigger step to adjust up production goal by 24% to 30% over 2008. The company plans to produce 38 million tonnes of pig iron, 41 million tonnes of crude steel and 39.1 million tonnes of steel products, while its 2008 output of pig iron, crude steel and steel products is projected to reach 30.1 million, 33 million and 30 million tonnes respectively. (ChinaMining)
Source: Other (05.01.2009)

Smart Group and CSN in talks of Kremikovtzi Ukrainian Smart Group and Brazilian CSN have a long-term interest in the bankrupted Kremikovtzi steel plant. They will elaborate a plan for its financial recovery to offer the creditors, syndic Tsvetan Bankov said. At present, plant installations are being kept in a regime to be ready for use. Bulgarian Intertrust Holding and Ecometalengineering EOOD, Italian Lavfer and Russian Prominvest are the other companies interested in the steel plant.
Source: Pari (06.01.2009)

Kremikovtzi would be supplied at minimum levels Kremikovtzi shifts to operational regime with minimum levels of natural gas supply, said union leader Vassil Yanachkov. According to him the minimum supply is 15,000 cub.m. per hour. Currently gas is used only for maintenance of the coke batteries. If stopage is required, the coke chemical unit would e stooped and the coke batteries would be allowed. Currently the situation at the plant is a lot different from the normal operation conditions. The situation as a whole is extremely tight and drains out the batteries.
Source: Insurance.bg (07.01.2009)

KCM 2000 expects good times after slowdown In 2008, KCM 2000 AD, Bulgaria's leading lead and zinc smelter, produced 75,000 tonnes of zinc, 65,000 tonnes of lead and 120,000 tonnes of sulphur acid, Nikola Dobrev, CEO of the company, said for Pari daily. The price of metals dropped twice but the crisis is a chance for re-distribution of markets, which are flexible and soon our production will be in demand, Dobrev commented. That's why we do not slow down our investment programme.
Source: Pari (07.01.2009)

Stomana Industry reduced the gas consumption Stomana Industry JSC has reduced to a minimum the gas consumption, said the executive director Emil Hristov. Currently the metallurgical company is using 3 500 cub. m./hour, while the usual quantity is over 4 000 cub.m./hour. We are unable to use alternative fuel, said Anton Petrov – representative of Viohalko in Bulgaria. Through its subsidiary Sidenor, Viohalko is owner of Stomana Industry, Sigma, non-ferrous metalsmaker Steelmet and Sofia Med. BThe gas supply has not yet been changed. Stomana Industry has not received a warning to reduce the quantities, but the company has sent a representative to meet with the director of Bulgargas. If the gas supply is suspended Stomana Industry should stop, Petrov said. The metallurgical plant is one of the many that cut off their productions because of the financial crisis and the gas price hike of 23.89% from October.
Source: Dnevnik (07.01.2009)

Plants in Bulgaria Shut Down Temporarily After the world financial crisis hit Bulgaria, now this country is suffering another blow. The big plants in this country started shutting production down over a shortage of gas supplies. The chemical and metal industries are suffering the most. Yesterday Neochim PLC switched off activity. The gas supply for Eastern Europe's largest producers of fertilizers - Agropolychim JSC - has been reduced to 2,000 cubic metres, which led to reduction of production that has started before New Year. The Pirdop-based copper smelter Cumerio Med is also bracing up for the crisis. So are Radomir Metal Industries, that are also getting prepared to switch off temporarily. Boliarka brewery is suspending production, too, General Manager Anton Nenov informed. Stomana Industries SA are on the threshold of a temporary shutdown. Himko AD has already closed operations.
Source: Standart (07.01.2009)

Promet stops if the gas supply stops The furnaces of Promet JSC in Bourgas, that are currently stopped, would not restart. The reason is that the plat is not able to use alternative to gas fuel. ‘Furnaces are adjusted to run on natural gas only. If the supplies stop, the plant will not operate’, said the chief power engineer of the company Chavdar Tomanov. Now the furnaces are stopped for repair works, but Thursday they would start preparation for restart and the plant should be in operational mode on Friday. Promet uses about 60-70 cub.m. every 24h and consumption is 1.9-2 mln cub.m per year. The company is currently in active talks with the gas supplier.
Source: Dnevnik (07.01.2009)

Vietnamese steel industry development Many new steel plants have come up in last 2 years despite not being included in a government blueprint for the industry because of loopholes in administrative laws. Since 2005, when global steel prices recovered, steel plants have mushroomed in Vietnam, many of them not included in a government blueprint. On reviewing the industry’s plans for 2007-15, the ministry of industry & trade discovered that licenses have been issued to 32 projects not in them. Two of them are already up and running and three others are scheduled to begin early this year. In contrast, only 23 projects in the plan have got licenses so far. It found that local authorities have licensed the unplanned projects without obtaining permission from the government because they each have an investment of less than VND 1.5 trillion. (Vietnam Business Finance)
Source: Other (07.01.2009)

The insolvency procedure of Stomana Pernik finalized A decision from 7.01.2009 for finalization of the insolvency procedure of Stomana JSC – Pernik /3JW/ was presented to Bourse Information Company Capital market SPLTD by the Trade Register.
Source: Company information (07.01.2009)

Stomana Indutry supplied with 60-70% less gas The gas supply to Stomana Industry SA has been reduced 60-70%, said Konstantin Stamenov, head of the Production and Planning direction at the metallurgical company. Until yesterday the plant used the miminum quantity of natural gas – 3500 cub.m./h. ‘In order to get the situation under control we make savings, have shut down equipment and have minimized the whole warming up’, said Stamenov. The stagnation affected mainly the steelmaking, which has decreased significantly, Stomana Industry said.
Source: Darik Radio (07.01.2009)

Forced leave of absence Starting tomorrow 300 workers at the Pernik-based Kolhida Metal will be let into a forced leave of absence, said the president of the company Evgeny Petrov. The company is a small gas consumer, it uses 40-50 cub.m./h. However, the whole production is tied to the natural gas and there is no alternative fuel, Petrov explained. Kolhida Metal has sent a letter to the Ministry of Economy and Energy with a demand for minimal quantities of the blue fuel, which is to secure the warming up of the main equipment of the production line. Otherwise, it would freeze and the plant would stop operations, Petrov underlined.
Source: Darik Radio (07.01.2009)

Alcoa to cut global workforce by 13% Aluminum producer Alcoa Inc. said it will slash its global workforce by 13%, or 13,500 jobs, by the end of the year as a way to remain competitive during the global economic recession. The company said it made the move to hold on to cash and cut costs. In addition to the job cuts, the company said it has also cut 1,700 contractor positions and instituted a global hiring and salary freeze. In all, the company expects to save an annualized $450 million before taxes. Analysts currently expect Alcoa to report a loss of 5 cents per share for the fourth quarter. The company is scheduled to release those results on January 12. (CNN)
Source: Monitor (08.01.2009)

On January 6, Promet Steel stopped work and one third of all 900 workers went on paid leave. In the first days of 2009, the plant has to produce 33,000 tons of metal for clients in Europe and Africa. If the order is not fulfilled on time, we will lose USD 18 million, the executive director of the company said. This sum will be increased by the maintenance of the plant, which is USD 150,000 per day.
Source: Pari (08.01.2009)

Mass bankruptcies because of the gas crisis Bulgarian companies may hit the rock bottom because of the gas crisis as many of the installations operate only with the blue fuel, said the head of Confederation of Employers and Idustrialists in Bulgaria, Evgeny Ivanov. According to him the losses each day reach half a billion. In the next few days several of the leading metallurgical companies in the country may go bankrupt, said the CITUB union leader Vassil Yanachkov. They are Stomana Industry SA in Pernik, Promet in Bourgas, Shoumen-based Alcomet, Sofia Med and Steelmet in Sofia. Only a few installations operate on gas at Kremikovtzi, however, the supply as at minimum and in case of further decrease of the gas supply, emergency situations and ecological crisis may occur, the union said.
Source: Novinar (08.01.2009)

Steel makers to push for iron ore price drop Annual price negotiations for iron ore are set to be even tougher this year as steel makers, facing a global slowdown in demand, are looking to reverse some of the past six years of continuous price increases for their inputs. Contractual iron ore prices, which take effect for a year from April 1, are influenced by settlements between the Asian steel makers and the world’s biggest iron ore producers: Rio Tinto, BHP Billiton and Companhia Vale do Rio Doce (Vale). Fitch and Macquarie’s price predictions contrast with recent comments by Chinese steel makers, attributed partly to preliminary negotiating tactics, that iron ore prices should be cut by up to 82% this year. Last year, the benchmark price increase was 65%, agreed in February between Vale and Asian steel makers Nippon Steel, JFE Holdings and Posco. (Business Day)
Source: Other (09.01.2009)

Surprise labor inspections at Kremikovtzi A team of General Labor Inspectorate (GLI) will perform spot checks in metallurgical plant Kremikovtzi in the coming days, said its chief Galab Donev. All signals for violations of safety at work and working conditions in the steel mill will be inspected. The metallurgical giant is a subject of constant checks by GLI, which grew after the production operations were cut, Donev said. Last year the labor police officers have carried out 34 labor inspections at the plant and have made 97 mandatory instructions for correction of mistakes made. 21 acts, worth BGN 56,000, for violations of standards for safe work have been drawn up as well. According to Violeta Dobreva, Head of Department in the watchdog, which is responsible for chemical and metallurgical enterprises, 9 of these acts worth BGN 32,000, which are mainly for non-compliance requirements, have entered into force. Chance of implementation and others.
Source: Trud (10.01.2009)

Industry sinks In the freezing days of halted supplies of Russian gas to Europe and Bulgarian in particular, chilling macroeconomic news showed that the global economic crisis is far from over. Almost all European economies, the US and Bulgaria published what analysts dubbed catastrophic, fatal and disastrous data. Industrial production in Europe plummeted by a record amount in November and in Bulgaria it was down by 5% on the month and 8.8% on the year. The consensus among analysts polled by Dnevnik is that the country’s gross domestic product will grow by no more than 2% this year. News agency Bloomberg quoted Ivailo Vesselinov of investment bank Dresdner Kleinwort as saying that the economy will grow by a humble 0.8%, and recession is looming larger. The slide began back in October when industrial production fell on an annual basis. November saw double-digit drops in all benchmark sectors such as the chemical, construction and drops in all benchmark sectors such as the chemical, construction and machine building industries. Only the processing industry slumped by a smaller margin of 8.8%. Industrial production in some countries even passed the 10-percent mark. Germany, which is the eurozone’s largest economy, registered a 10% decline on an annual basis. Spain reported a 15.1% decrease. In Sweden, industrial output was down by 11.9%. Most data is worse than October’s, a sign of a further deterioration.
Source: Dnevnik (10.01.2009)

Law firm scandal at Kremikovtzi The same law firm consults the steel plant Kremikovtzi and its potential buyer - the Brazilian company CSN. The company is Borislav Boyanov & Co.Already in 2007, when Alexander Tomov was director of the plant and the Indian billionaire owner Pramod Mittal was owner, the metallurgical company contracted with the law company to serve the plant in legal matters. This contract has not yet been terminated and lawyers continue to give legal advice to Kremikovtzi.
Source: Novinar (10.01.2009)

Metallurgists to protest on Thursday A new protest of Kremikovtzi workers is scheduled for January 15. They would demand a speedy resolution on the choice of a strategic investor in the plant, said the head of Porkrepa union, Lyudmil Pavlov. The applied offers are by Brazilian group CSN and the Russia-based Smart Group. Currently the steel mill is supplied minimal qualtities of natural gas in order to maintain the coke chemical installations, bur if the cold weather continues, it might be fatal.
Source: Standart (10.01.2009)

Industry production shrank 5% in November According to the preliminary data, the industry production in November 2008 is 5% lower as compared to October. A drop down of 22.5% is registred for the Chemical industry, 19.1% for the production of wood products (excl. furniture), 14.9% for the production of electrical machinery and equipment and 12.5% for production of metal product (excl. machinery and equipment).
Source: Darik Radio (10.01.2009)

Voestalpine to reduce dependence on Russian gas Voestalpine AG has announced that it may be forced to adapt its method of steel production if Russian natural gas supply cuts persist beyond next week but it does not expect to curtail output unless the gas cuts persist for several weeks. A company spokesman said that "Up to next week, we are not affected, but if the gas disruptions continue for a longer period, we would be forced to adapt our production." Austria's government said that it would take measures to reduce gas usage in industry and power production at peak times if the halt in gas supplies out of Russia continues much longer. Meanwhile, OMV Econ Gas said earlier that the supply of gas from Russia via Ukraine has completely stopped after it was dramatically cut to 10% of normal inflow. Austria receives 51% of its annually consumed gas from Russia via Ukraine. (Steel Guru)
Source: Other (10.01.2009)

Mining industry will demand state support Bulgarian Chamber of Mining and Geology (BCMG) will offer the state to decrease the concession taxes on natural resources yield and even temporarily to relieve the concessionaires from it. The aim is in this time of unprecedented crisis to help the companies from the branch, to avoid closure of mines and job cuts, Lachezar Tsotsorkov, president of the chamber, said. No other industry is so dependent on the situation on the markets, high eco requirements, high and expensive rehabilitation of the powers etc. Investments are risky as success depends on factors like quantity and quality of natural resources, cyclic and often uncontrolled and speculative prices etc. Coal mining is the only mining activity in which the state is still the owner. The closed cycle of coal yield and use guarantees the stability. Due to its role in production of power, the state pays special attention to it. But coal mining is directly endangered by the requirements for reduction of greenhouse gas emissions Bulgaria has signed to observe. At present, the branch is left to rely entirely on the interests and risks of investors.
Source: Pari (12.01.2009)

A new company for Kremikovtzi A new company would undertake the assets of the steel plant after the sale to a new owner. This is the option chosen by the two candidates, the State and the bond-holders. Both Smart Group and CSN intend to enter Kremikovtzi as owners after its recovery. But this would be only the second stage of the plan. Russians and Brazilians don’t want to sign any toll manufacture contracts like Vorskla Steel did. They want direct control over the operations of the steelmaker, which is a problem at the current stage due to the insolvency. Deputy Minister of Economy, Nina Radeva, said that the strategic investor would most probably be chosen within a few weeks.
Source: Standart (12.01.2009)

A metal products plant in Letnitza A new plant for metal construction products and cold processing of metals will start at Letnitza until the end of the year. The Plovdiv-based investors Jupiter-Metal and Cianid Holding will invest BGN 15 mln in it. About 180 jobs would be opened at the plant. The plan is to produce a new class of side-road barriers with higher percentage of holding the vehicles on the road, the companies said. Electricity poles would also be produced, as well as metal constructions for the industry. The output would correspond to the latest Eurpean standards. Investors are sure that no larger similar plant has been built. The first groups of workers have already been trained in Plovdiv.
Source: BG Sever-Pleven (12.01.2009)

US steelmakers support Obama infrastructure stimulus program US steelmakers are urging support of a multi-billion dollar infrastructure investment program proposed by President-elect Obama and Washington congressional leaders. They also want the stimulus package to include Buy America provisions requiring the use of US-made steel in any federally funded construction projects. A number of steel producers would benefit from an infrastructure stimulus program because as much as 30 million-35 million short tons of steel go into public and private construction projects in a typical year, according to the American Iron and Steel Institute in Washington, DC. Construction is the single largest market for the US steel industry, which produced a total of 107 million short tons in 2007 and employed about 1.2 million people. US companies primarily producing construction steels (rebar, plate, wire mesh, rail, beam, tubular goods) include Nucor, Gerdau Ameristeel, Commercial Metals, Steel Dynamics, Evraz, SSAB, US Steel Tubular Products and ArcelorMittal USA. (Platts)
Source: Other (12.01.2009)

Kremikovtzi's Two Most Likely Buyers Scared off by Gas Crisis The Bulgarian Economy Ministry and the Kremikovtzi management have prepared several investment plans with the two most likely buyers of the factory - the Ukrainian Smart Group and the Brazilian CSN. The news was announced Monday by the plant's bankruptcy trustee Tzvetan Bankov in an interview for the Darik Radio. In his words, the likely options also include contracts for production with materials supplied by the client. "I am afraid that both Smart Group and CSN have been taken aback by the present gas shortage crisis. The potential investors should have been acquainted with the situation in detail", Bankov declared. In his words, the two companies also had to be informed about the necessary short-term investments, i.e. for the relaunching of the plant, and with the long-term investments with the environmental and technological requirements for its operation. Bankov made it clear that only Kremikovtzi's creditors could make a decision about the factory's future. The management of the insolvent plant could make no such a decision.
Source: Darik Radio (12.01.2009)

20% of the4 metallurgists laidoff About 10-20% would be the layoffs at the Metallurgy this year as a result of the global financial crisis in Bulgaria. The process of imposing forced leaves of absences started in the end of 2008 as the demand for metallurgical products tumbled, said the head of the Bulgarian Chamber of Metallurgy, Politimi Paunova. The cut off gas supply also impacts the industry. ‘The effects of the financial and the gas crises merge’, said Mrs Paunova. The end effect would be extremely negative. Metallurgical processes are continuous and the gas supply has been reduced to one third everywhere. Production at most of the plants is minimal. The production cycle is long and the results would show as early as the end of the month. Promet in Bourgas had stopped operations for repair works in the end of last year but cannot restart now. There are 3-4 plants, which saw their gas supply totally cut off. Among them, are the fireproof-steel making companies Trud-Rousse and Shamot - Elin Pelin. The plant for rolled aluminium Alcomet enjoys token gas supply. According to Paunova, loses in cases of contract terminations would be significant. What’s more, markets are very tight due to the financial crisis.
Source: Standart (13.01.2009)

China to reserve 300,000 tonnes zinc It is reported that China's State Reserves Bureau will hold a meeting with domestic big smelting enterprises in Beijing to discuss the strategic reserve of zinc. As per report, State Reserves Bureau is expected to build as much as 300,000 tonnes of zinc stock in order to lend a support to the downstream smelting firms which are under the great pressure of shrinking demand. An executing trader in a Beijing metal exchange firm said that the strategic reserve would reach 100,000 tonnes to 300,000 tonnes. (Finet)
Source: Other (14.01.2009)

Podkrepa trade union insists that Pramot Mital and Alexander Tomov reimburse Kremikovtsi’s confiscated millions, because they are necessary for the plant’s saving. This is included in the widespread declaration of the trade union. We have nothing against PFC CSKA, but we disagree with metallurgists’ affliction because of Alexander Tomov’s unpremeditated and criminal actions, the declaration says. It specifies, also that the requested money is needed for paying off workers’ salaries for November and December. As far as money’s confiscation and conclusion of unprofitable contracts is concerned, the syndicalist consider them a job of the competent authorities.
Source: profit.bg (15.01.2009)

Unions estimate 20% further layoffs if the crisis continues In case the gas crisis persists, about 20% of the jobs at the metallurgical plants in Bulgaria would be cut off, said the head of the Metallurgy federation at Confederation of Labor – Podkrepa, Lyudmil Pavlov. According to him, the production operations at Shoumen-based Alumina has been fully halted. ‘One of the electric furnaces at Stomana Industry SA is being shut down, the situation hits Cumerio Med and Alumina-Shoumen as well, because they cannot operate on oil residue, but only can operate on gas.
Source: Darik Radio (15.01.2009)

Gas crisis scares potential buyers of Kremikovtsi Candidate investors for Kremikovtsi want to see how the gas crisis will end before the enter the final stage of talks with the major creditors, according to two bondholder representatives and deputy Economy Minister Nina Radeva, speaking to Dnevnik. The bondholders specified that they have submitted their bond sale conditions to the two candidates – Brazilian CSN and Russian Smart Group. The bond issue is the second largest debt of the metallurgical giant and if the appeal against the state’s demand for repayment of the aid package of BGN 698 mln is upheld by the court the bondholders will play the lead role at the creditors’ meeting. The two candidate buyers have also talked about a settlement with the state, which through the Ministry of Economy and Energy and several state monopolies is currently creditor number 1. If the bondholders reach an agreement together with the economy ministry and one of the candidates they would have majority for the vote at the creditors’ meetings. Thus the administration procedure for Kremikovtsi will be accelerated and a health plan could be implemented. The alternative is asset sale through a tender and it is backed by ArcellorMittal which managed to get a place on the list of creditors. Although in the last few months the world steel leader has been saying it wants to acquire a fully-integrated facility it has been steering clear of talks with the bondholders and the government. They last got an invitation for negotiations in November. Yesterday no representatives of the company of the older Mittal brother could be reached for comment. At the same time syndicate confederation Podkrepa said it will make sure the debts of football club CSKA to Kremikovtski are repaid. “During the years Alexander Tomov, [executive at Kremikovtsi and at the football club], has been favouring the club at the expense of the plant and it is high time the assets and cash are repaid,” sources from Podkrepa said. The confederation also cancelled a protest planned for today in order to avoid political forces taking advantage of Kremikovtsi’s problems. According to Liudmil Pavlov from Podkrepa both candidates have presented similar offers for the plant in financial terms. The difference was only in the term of their viability plans. Smart Group’s plan envisaged five years for the facility to be revived, while the Brazilian investor offered four years.
Source: Dnevnik (15.01.2009)

Sofia Should Ring the Alarm Bell about Kozloduy NPP Ivan Genov, CEO of NPP Kozloduy SPJSC - Mr. Genov, Bulgaria is ready to demand the reactivation of third and fourth units of Kozloduy NPP. Bulgaria's President Georgi Parvanov first stated, at the dawn of the gas crisis that now is the time for starting the reactors. Energy Minister, Petar Dimitrov forwarded the issue in Brussels and the Bulgarian Parliament backed him. Are you optimistic or not about this option? - I'd rather be realistic. To me, as well as to all my colleagues at Kozloduy NPP this reaction of our politicians was very important because it showed there is a will to use every opportunity for raising the question about the restart of units 3 and 4. - Is IMRO leader Krassimir Karakachanov right in his calculations that Bulgaria has lost 100 million levs over the premature closure of the two reactors? - He isn't, because 100 million is far too small a figure. There have been many attempts at calculating these losses. Also, we must not forget the consequences for the environment the decommissioning brought. The annual losses from stopping one reactor gross 175 million levs. - Do you think the gas crisis is the only actual reason why we want to put them back to work? - The gas crisis is really overwhelming, yet we have to bear in mind that currently Bulgaria doesn't face a power shortage. Should the solution of the gas supply crisis be delayed, though, then we should expect that electricity consumption in the country would rise dramatically. In such a situation, of course, it would be life saving to set in operation more power generating facilities. This is the actual ground for considering the option of the reactivation of Units 3, 4 of the Kozloduy nuke. In Europe, where steps towards tackling global climate changes are becoming a priority, the attitude to nuclear energy is being revised and an increasing number of experts support the idea of turning to this kind of power generation. I hope that our partners in the European Union will look benevolently at this reasonable solution and let Bulgaria restart the decommissioned reactors that could generate environmentally clean power for Southeastern Europe, which already suffers from serious energy deficit.
Source: Standart (15.01.2009)

Iron ore prices may surprise on upside Mining giants BHP Billiton and Rio Tinto may win higher annual contract iron ore prices than expected as demand rebounds in China amid the start of annual price talks. Merrill Lynch commodities analyst Tom Price said the market had strengthened since late last year. Things are improving, the Chinese steel mills will be keen to settle early and the iron ore producers will probably want to delay. Baosteel Group, China’s biggest steelmaker, started talks to set annual contract prices with Rio Tinto in Shanghai this week. Prices, which have risen the past six years to a record, may fall 30 per cent trimming profits for London-based Rio and Melbourne-based BHP, the world’s No. 2 and 3 iron ore exporters. BBY analyst John Veldhuizen, who has forecast a 30 per cent drop in prices, said it might not even be that much because the latest import data into China was extremely strong. (Bloomberg)
Source: Other (15.01.2009)

Kremikovtzi deposit will be granted on concession for 35 years The government decided to grant a concessions for the extraction of iron ore and barite material from Kremikovtsi deposit for 35 years. The area of the deposit is 2928.5 decares and the concessionaire will be chosen at a non-present auction. The Minister of Economy and Energy is authorized to organize and carry out the procedure.
Source: Banker (16.01.2009)

Slowdown challenges the steel tube, pipe industry A definite slowdown in the sales of steel tubes and pipes in the third quarter of 2008 was reported by ASTPM executive director Mike Robertson. "Steel giant ArcelorMittal South Africa announced price drops for October, November and December, which is part of the reason for the slow down of orders received. Companies are reluctant to order and keep huge stockpiles in the face of further anticipated steel price drops," he says. Besides the local price volatility, prices have dropped dramatically in the export market making the export of steel pipes and tubes difficult. A slowdown in overseas demand is challenging the security of orders for steel tube and pipe products, but it is expected that there will be an improvement in the first half of 2009, adds Robertson. Meanwhile, the antidumping duty placed by the US on Chinese exports of circular welded carbon steel pipe in July last year and the recommended implementation of a 90% antidumping duty by the European Union is having an impact on exports from South Africa. (Engineering News)
Source: Other (16.01.2009)

A new investor is expected at Kremikovtzi within days The decision on the new operator of Kremikovtzi steel mill is expected to be taken on Wednesday, the unions at the plant said. The bondholders, who are owed EUR 325 mln by the ex-owner Pramod Mittal, are expected to meet the two companies from Ukraine and Brazil, candidates to become the operator of Kremikovtzi, in the beginning of the week. Then the new operator is supposed to be chosen on January 21, Wednesday, and the first raw resources for the production are expected to be delivered until the end of the week. Head of the Metallitzi federation at Kremikovtzi is positive that a new investor will enter the plant as both CSN and Smart Group are prepared to take the helm of the steelmaker.
Source: Monitor (19.01.2009)

Metals trade collapses Trade in ferrous and non-ferrous metals collapses, said people from the sector from Dobrich. The crisis hit the industry six months ago. There is neither domestic market, nor export. At its peak the ferrous scrap reached BGN 0.77, while at present it is BGN 0.22 per kg. A kilogram of copper was traded for BGN 10 last year, now the price is BGN 3. Aluminium fell from BGN 2 to BGN 0.60 for a kg. Only the strongest will survive, said the businessmen. They said that their Varna-based neighbors have an advantage, the access to the sea ports and export options. Smaller in-land companies, dependent on the local market, are doomed.The shut down of Kremikovtzi and Stomana Industry SA because of the financial and gas crisis are the main reasons for the downfall of t5he scrap trade. Some of the smaller companies return cranes and trucks bought on lease as they cannot afford the payments.
Source: Standart (19.01.2009)

Nippon Steel, Posco Will Cooperate on Ore and Coal Nippon Steel Corp., the world’s second- largest steelmaker, said it will cooperate with South Korea’s Posco in talks with suppliers over iron ore and coking coal contract prices for this year. “Sure, we already have alliance with Posco,” Akio Mimura, chairman of Tokyo-based Nippon Steel told reporters in Seoul yesterday when asked if the company plans to cooperate with the Korean steelmaker in raw material negotiations with miners. They have not started talks yet, he said without elaborating. Baosteel Group Corp., China’s biggest steelmaker, started talks to set annual contract prices with Rio Tinto Group last week in Shanghai. Coking coal producers from Australia, Canada and Russia will begin talks with steelmakers next week in Japan to settle contract coking coal prices for the year starting April 1. Goldman Sachs JBWere Pty predicts annual contract prices of coal will fall 60 percent and iron ore 30 percent from April. (Bloomberg)
Source: Other (19.01.2009)

Anton Petrov: We will demand a change in the contract with Bulgargaz Anton Petrov, member of the board of directors of Stomana Industry SA and regional manager of Viohalco for Bulgaria Mr. Petrov, what is the condition of Bulgarian metallurgy at the moment? - Unfortunatelly, the current situation exceeds our estimates by time and by scale. Nobody expected the so called economic crisis to develop so fast and at such large scale. It is already turning into a production crisis and is about to worsen. However, I am optimistic and I expect that the trend will be turned around in 2009. The economic crisis grew into a gas crisis… - The gas crisis is an additional drop of water, which may and will be fatal for many companies. Additional unexpected expenses will be accumulated, inability to produce, which may destroy the fragile balance and lead to bankruptcies. I am not pointing out only the metallurgy. Basically large companies operate in our sector and they have significant cash flows with long-term planing. If the gas crisis does not continue too long, it will not be fatal, although we will encounter financial loses. Is it possible for the companies to turn into alternative fuels in order to escape similar situations in the future? - It is unthinkable to consieder alternative fuels for the technological processes of the metallurgical production. The plants are large consumators of energy and fuel and if we have to maintain alternative fuel,it would be of large scale and would need different technology. In my opinion, the change into another energy source is unthinkable for large consumers like us. For instance, Stomana Industry uses electricity, besides the natural gas, and in case of electricity defficite the plant would need a small TPP or a large generator. It is natural not to need alternative fuel. Did the State warn you that the gas would be cut off or did it surprise you? - Civil Defence call me the night the gas stopped. They “warned” us that the gas supply has been cut and we have to take urgent measures at Stomana Industry in order to avoid any damage. De facto and post factum we were warned that the pressure is falling and the supply would cease. You have warned before about the economic unpredictability in the country… - I don’t want to take points from the current situation, but we have talked about the gas price and the necessity to take a look at the signed contracts and the conditions under which Bulgargaz sets the prices. What are the add-ons to the gas price and whether the correct consumers do not pay others’ debts – those of the heating utilities ot Kremikovtzi’s. Do you intend to seek compensations? - Usually, in case of normal relations between two partners – Bulgargaz and us as clients, we should. However, Bulgargaz as a monopolist has signed a contract, which says that we cannot make such demands. This is more than absurd. Gas is a resource, whether an energy source or a raw resource, and Bulgargaz is a supplier, which has a contract with us. It has to take the consecuences in case of non-implementation of its obligations. Otherwise this contract is groundless and meaningless. This is one of the questions that we would place during talks in the employers’ organizations that we participate in, including Bulgarian Association of the Metallurgical Industry, member of BIA, in order to change the contract relationships with Bulgargaz. In this way, Bulgargaz will be forced to change its contract relationship with Gazprom and our demands would reach the Russian supplier. Currently, we can demand compensations for our own satisfaction but we are aware that the chances for success are close to zero. How many people from Viohalco Group have been laidoff so far? - From Stomana Industry – 180 workers and 130 from Sigma. Personel at Sigma increased in last years as the company was related to the investment activities of our company. The investments in Stomana Industry are finished so the need for a large workforce at Sigma is no more. Nobody is happy from such actions. What’s more the disacharged workers were able and good at their job. We had invested in their qualification, education and experience. Do you have any information on the loses so far? - It depends and it is difficult to say a real sum. Various figures are being mentioned, from BGN 10 mln to BGN 500 mln. Let the crisis end first and we would be able to describe and evaluate the damage afterwards.
Source: Dnevnik (20.01.2009)

Five metallurgical firms lose BGN 20m to gas standoff Five Bulgarian metallurgical companies have amassed a combined loss of BGN 20 million in the fallout of the gas crisis which cut off much of Eastern Europe for two weeks. The news was announced by the association’s chairwoman, Politimi Paunova, upon signing the collective labour agreement for the sector. Precis Inter Holding, Helios Metalurg, ProMet Steel, Bulmet & Co. and Trud have made 100 workers redundant and sent another 1,000 on unpaid leave. Aluminium firm Alcomet also suffered from the dispute between Russia and Ukraine after seeing gas supplies dwindle by over 40%. The damage the economic and the gas crisis have wreaked on the Bulgarian metallurgical sector is yet to be assessed, said Anton Petrov, chairman of the Bulgarian Association of the Metallurgical Industry and board member of Stomana Industry, the Pernik-based steel maker. The biggest challenge before the sector will be restoring customers’ confidence, Petrov added.
Source: Dnevnik (21.01.2009)

We encounter BGN 400 thous losses a day According to preliminary data Radomir Metal Industries JSC loses BGN 400 thousand per day because of the stopped gas supply, said the Executive Director of the company Lyudmil Alexandrov. For two weeks the plant has been working with only 10% of its capacity as the gas is the major raw material for its production. With the delivered quantities of gas Radomir metal only manages to maintain some of the facilities to not freeze. According to Aleksandrov the distribution of natural gas is incorrect because the total consumption of the individual plants was not calculated.
Source: Pari (21.01.2009)

Government Decision on New Kremikovtzi Investor Due The decision of Bulgaria's Ministry of Economy and Energy to pick up one of the two main bidders for the Kremikovtzi steel factory is due Wednesday. The Ministry and the plant's bondholders are bound to choose the new operator of Kremikovtzi between the Ukrainian company Smart Group and the Brazilian CSN as the trade unions have set a condition that the decision be made by January 21, or otherwise the workers' protests are going to be resumed. With the announcement of the new investors, the first fresh supplies of raw materials are expected to be received at the factory by the end of the week, which will be used to restore its production. Kremikovtzi's manufacturing operations have also been reduced tremendously because of the shortage of natural gas that Bulgaria experienced as a result of the Russia-Ukraine gas dispute. Bulgaria's Energy and Economy Minister Petar Dimitrov has promised that the first larger gas supplies the country would get on Wednesday would used to fuel up the metallurgical and fertilizer factories.
Source: Monitor (21.01.2009)

Metallurgy restarts in 24h Metallurgical plants can restart their production up to 100% of their capacity within about 24 hours if they receive the necessary natural gas, said the chairman of the Pernik-based Stomana Industry SA, Anton Petrov. All we have to do when the gas arrives is to warm the furnaces up to the necessary temperature and everythink will be a should be, he said.
Source: Standart (21.01.2009)

KCM will expand with BGN 300 mln BGN 301 million will be invested in KCM S.A. Plovdiv in the next two years for the expansion of the production. The money will be invested in new grounds in the enterprise in Kuklen, and construction of new installations for lead and sulfuric acid. For the implementation of the project the company will receive a certificate for first class investor. After putting into operation of the new technology installations, about 145 specialists will be involved in the production. With the new installations the emissions of greenhouse gases, dust and harmful substances from the plant will reduce.
Source: Standart (21.01.2009)

Higher minimal pay in the metallurgy despite the crisis The minimal wage in the metallurgy sector will rise from BGN 250 to BGN 350. This is one of the pointsin the new collective labor contract, signed by the Metalitzi federation at CITUB, National Federatin Metalurgia at CL-Podkrepa and the Bulgarian Chamber of Metallurgy (BCM). I case the annual inflation exceeds 8%, the parties are obliged to discuss compensatory measures and mechanisms. The new collective labor contract expires in November 2010.
Source: Dnevnik (21.01.2009)

Machinemaking record lower demand Machinemaking is not among the most hit from the gas crisis industries as too few of the companies in the sector use the blue fuel for production. The industry chamber explained that many companies let part of their workforce into paid leave of absence due to the smaller orders. This partially softened the impact of the cut gas supply, said Iliya Keleshev, chairman of the Chamber. Perhaps, the most hit company is Radomir Metal Industries, which uses gas for its production operations. The Radomir-based plant was not included in the list of companies for limited gas supply and ceased operations for two weeks.
Source: Pari (21.01.2009)

BMA says to cut coking coal output by 10-15 percent The BHP Billiton Mitsubishi Alliance (BMA), the world's largest coking coal producer, will cut output by as much as 15 percent for the next six months as a slowdown in global steelmaking slashes demand. BMA, whose annual coking coal exports account for nearly a third of the global market, produced 26.3 million tonnes of coal in the first half of the financial year, BHP said in its quarterly production report. BMA is a 50-50 joint venture between Japanese trading house Mitsubishi Corp and BHP Billiton. Coking coal production for the second half of the 2009 financial year is expected to be approximately 10-15 percent below current capacity, BHP Billiton and Mitsubishi said on Wednesday. BMA's decision to reduce coking coal output comes on the heels of production cutbacks announced earlier this month by Australia's Rio Tinto Group/Plc and Canada's Teck Cominco Ltd. (Reuters)
Source: Reuters (21.01.2009)

Stomana hopes for lower prices Stomana Industry SA will implement its contracted orders, said Anton Petrov, CEO of the metallurgical company. The losses of the company can hardly be compensated. A moral compensation is more possible and we would be glad if the state, in its role as principal of Bulgargaz, demands it from Gazprom, Mr. Petrov added. For instance, a lower price of the gas supply would be a good compensation for the consumers, he added.
Source: Standart (22.01.2009)

Kremikovtzi key creditors unite positions The state and bondholders, who are the biggest creditors of Bulgaria’s ailing steel mill Kremikovtzi, have presented their common stance to the prospective bidders for the insolvent company. Ukrainian company Smart Group of mogul Rinat Akhmetov and Brazilian CSN are considering the parameters of the offer before they accept it or resume talks. Negotiations with the Brazilian candidates have been more intense, with the company already doing due diligence at the Bulgarian mill. However, one of the biggest bondholders voiced concerns that both suitors plan to restructure the mill’s debt, which means that possible payouts will be put off for a later stage. Both candidates have reached agreement in principle on toiling contracts at Kremikovtzi, which can enter into force right after securing consent from the Government and the bondholders, the plant said. Local legislation does not allow extending acquisition guarantees before a bondholders’ meeting is held, raising a question mark over technological rebooting and operating capital investments are under question. This was what drove away India's steelmaker Arcelor Mittal and Vorskla Steel, owned by Ukrainian billionaire Konstantin Zhevago.
Source: Dnevnik (22.01.2009)

Vietnam may stop steel project licensing Vietnam's ministry of industry & trade has urgently asked the government to stop licensing new steel projects to prevent a glut of products on the domestic market. MoIT proposed that consideration of new steel making facilities would be taken only if they were located in underprivileged regions, including the mountainous areas. The MoIT's proposal came in response to public concerns, which grew with rampant issuance of licenses for both domestically and foreign-invested steel projects across the country. The MoIT's investigation of recently licensed steel projects in Vietnam found that 32 projects were not listed in the country's steel industry development strategy for 2007-2015, which the Prime Minister Mr Nguyen Tan Dung approved in September 2007. The licensed steel making facilities outside the strategy are principally located in southern Ba Ria Vung Tau province (seven), northern Hai Phong (five), central Thanh Hoa and northern Hai Duong (four each) and central Ha Tinh (three) provinces. (Intellasia)
Source: Other (22.01.2009)

KCM to produce less zinc and lead in 2009 Due to the crisis, in 2009 KCM JSC, Bulgaria's leading lead and zinc smelter near Plovdiv, reduces production of zinc by 25% and of lead by 15% compared to the previous year, Stoyan Pehlivanov, executive director of the plant, commented. Last year the company produced 65,000 tonnes of lead and 80,000 tonnes of zinc. At the end of 2008 investment programme worth BGN 301 million started and will be finished in 2011.
Source: Pari (23.01.2009)

Termination of the lead production at OTzK demanded Municipal Council of Kurdzhali voted in favor of termination of the lead production at Lead and Zinc Complex (OTzK) JSC - Kurdzhali because of air pollution. The Council insists on opening a medical office for respiratory cases and installation of an information table showing the changes of air pollution. Cadmium in the air was 420% and lead – 1.8 times above the permitted level in the period August 18, 2008 – December 31, 2008.
Source: Standart (23.01.2009)

OCK to sue eco ministry over blocked investment Bulgaria’s Kardjali-based lead and zinc smelter OCK hit political and administrative trouble, which added to the pain from the ongoing global economic slowdown and the sliding metal prices, said owner Valentin Zahariev. The municipal council yesterday unanimously voted to close the plant’s lead capacities, which are its core production, on environmental concerns. Zahariev said he has filed a legal claim against the Environmental Ministry for allegedly exerting political pressure to block an investment plan to reduce pollution from the plant. The smelter’s owner, Intertrust Holding, unveiled back in the autumn of 2007 plans to spend EUR 60 million on the revamp and expansion of the production capacity at OCK. The project has been delayed by a year and a half after its environmental impact assessment report was rejected by the second council. Zahariev said the decision was political.
Source: Dnevnik (23.01.2009)

Nippon Steel steps up output cuts on weak demand Nippon Steel Corp, the world's second-biggest steelmaker, will step up output cuts for the October-March period to about 5 million tonnes as demand crumbles. Nippon Steel Chairman Akio Mimura said earlier this month that the steelmaker was likely to reduce production by more than planned, but a spokeswoman said on Friday that nothing had been decided. Steelmakers including No.1 ArcelorMittal, No.4 POSCO and Japanese rival JFE Steel Co of JFE Holdings Inc, have also announced output cuts as the global slowdown hurts sales in steel-consuming industries from autos to home appliances. Nippon Steel had previously said in November it would slash output by 2 million-2.2 million tonnes in October-March, which was already double the cuts it initially projected. (Reuters)
Source: Reuters (23.01.2009)

Kremikovtzi talks enter final stage Ukrainian company Smart Group and the Government have reached agreement in principle on its commitments if it is picked the new owner of Bulgaria’s debt-ridden steel mill Kremikovtzi, said Deputy Economy Minister Nina Radeva, who took part in last week’s talks. The details will be included in a special memorandum to kick off a rescue plant for the plant. In the final stage of the negotiations, the Ukrainian company will meet with creditors. Sources familiar with the matter said the state is unlikely to approve any action without securing the nod of bondholders. Brazil’s mining giant CSN, which did not arrive for talks with the economy ministry last week, is also in the race agreeing details with bondholders. Last week it emerged that a court sitting on an appeal on a claim against Kremikovt for repayment of a BGN 698 million state aid package, which placed the Government on top of the creditors’ list with 35% of total debts. If the claim is rejected, the Government’s share will shrink to almost 18% while bondholders will emerge on top with 43% and will play the lead role at the creditors’ meeting. Kremikovtzi’s bonds trade on the UTC market at 7 to 10% of face value.
Source: Dnevnik (26.01.2009)

Tata’s Corus Says Orders Down a Third Corus, Europe’s second largest steelmaker, said its orders are down by a third due to an “unprecedented” fall in demand, as reports said the company is preparing to cut as many as 3,500 jobs. Corus, the European unit of India’s Tata Steel Ltd., employs 42,000 people worldwide, including 24,000 in the U.K. It will cut as many as 3,500 jobs across its global operations, the Sunday Times said, without citing anyone. “The steel industry has been through an unprecedented slowdown,” Corus spokesman Kevin Byram said by telephone in London today. “As a result Corus’s order book is down by one third.” He declined to comment on job losses. Corus, formed through the combination of British Steel Plc and the Netherlands’ Royal Hoogovens in 1999, said in October it may extend a 20 percent output cut into the first quarter of this year as demand slows. Government aid for workers who lose their jobs and payroll reductions “could be of great assistance,” Corus said Dec. 11. (Bloomberg)
Source: Other (26.01.2009)

300 workers lose their jobs if lead production in Kurdzhali ceases 300 workers will be left without a job if lead production in Lead and Zinc Complex (OTzK) JSC - Kurdzhali ceases. This was announced by the president of Intertrust – Valentin Zahariev, as a response to the municipal demand to the Ministry of Environment to consider the ecological issues in the region. He did not deny that the plant pollutes but insisted that currently a campaign is going on against him with DPS (Rights and Freedom Movement) at the bottom. Proof of that, he said, is the blocking of Intertrust’s intention to modernize the zinc production. The project, realized with a credit by BNP Pariba, was stopped by a decree of Minister Dzhevdet Chakarov. However, Minister’s motives are formal and a legal procedure for termination of his decision has been launched, Zahariev said. ‘Intertrust will take the matter to the European Commission. We would most probably sue the Ministry for money losses as interests on bank credits keep going’, Valentin Zahariev added.
Source: Trud (27.01.2009)

Kremikovtzi prepares for strikes after Wednesday Metallurgists from Kremikovtzi will wait for the choice of an investor in the plant as late as tomorrow, after that, they will restart the strikes in the center of Sofia. Currently, the Ministry of Economy considers the offers of the Ukraine-based Smart Group and the Brazilian giant CSN.
Source: Sega (27.01.2009)

Two fines for OTzK The Supreme Expert Ecology Council at the Ministry of Environment and Waters has not approved the investment project of Lead and Zinc Complex (OTzK ) JSC – Kurdzhali for modernization worth EUR 120 mln. Among the main reasons for this decision are the non-execution of the measures under the integral permit, the lack of guarantees that the investment program would lead to meeting all ecological standards, the lack of solutions for guaranteeing the air quality, the non-preparation of a plan for a storage depot for the dangerous production waste. According to the management of Intertrust Holding JSC, owner of OTzK, the problem with the plant is not only ecological but economical as well. Meanwhile, OTzK was fined twice by the regional environment watchdog in Haskovo for not meeting the integral permit conditions. The two sanctions are for BGN 15 thous and BGN 30 thous.
Source: Standart (27.01.2009)

OCK owner says ruling partner stalled project Intertrust Holding’s production upgrade plan at lead and zinc smelter OCK is locked in political interests of ruling coalition member Movement for Rights and Freedoms (MRF), said the holding company’s owner, Valentin Zahariev. Zahariev said the IMF-ran Environment Ministry should be punished for unprecedented behaviour without elaborating further. The ministry declined to comment on the allegations. Intertrust Holding plans to double output at its Kardjali-based plant by pumping EUR 120 million in a state-of-the-art production unit. The project has been awarded a first-class investor certificate, which allows fast-track administrative support. However, the project is still awaiting the ministry’s say on its environmental impact assessment (EIA). The holding company has filed a suit against the ministry with the Supreme Administrative Court and have threatened to refer the case to Brussels. Zahariev said it was outrageous that Environment Minister Djevdet Chakarov should be calling a second council to discuss a project which has already been granted consent without a single objection from the public. Deputy Environment Minister Chavdar Georgiev explained the EIA report had been rejected on numerous drawbacks, including high pollution levels. OCK executive director Slaveya Stoyanova said the company is working hard to cut emissions, noting that pollution in Kardjali had been reduced by 40% in the past year alone. The town’s municipal councilors said last week the plant should be shut down on environmental concerns. The company said closing lead production capacities will cost more than 300 jobs.
Source: Dnevnik (27.01.2009)

Japan steelmakers seek iron, coal price cuts According to a report Nippon Steel Corp and other Japanese steelmakers will press for cuts of 40 percent in iron ore prices and 60-70 percent in coal prices for the next business year due to falling costs of natural resources and weakening steel demand. The cuts would bring iron ore and coal prices in line with 2007/08 levels and save the industry around 3 trillion yen. Nippon Steel officials were not immediately available for comment. Demand for automotive steel plate and other items has been hurt by the global recession, and Nippon Steel, the world's second-biggest steelmaker, has said it will double its planned output cuts for the October-March period. Other steelmakers, including JFE Steel Co of JFE Holdings, have also announced output cuts. Japan's steel industry is set to slash output by at least 30 percent in January-March, and hopes to offset the impact of lower capacity utilisation by asking for sharp raw material price cuts, the Nikkei said.
Source: Reuters (28.01.2009)

A mine may flood the residencial districts near Kremikovtzi Over 1000 people living in the Kremikovtzi region may be left on the street as they face collision and flooding by Kremikovtzi mine, said Nikola Vuchev, procurator of Kremikovtzi-Rudodobiv JSC. Ownership of the mine is not clear, the installations in it are worn off, the mine shaft is flooding and workers of the steelmaker go to secure the mine so that emergencies do not happen in the region. The concession of the mine was taken away from Valentin Zahariev in 2004 through an order of Minister of Economy Lidia Shuleva as he had not paid concession fees for years to the state, Vuchev said. According to the document, Kremikovtzi mine had to be given to the district administration for management in 2004, however, this has not happened.
Source: Novinar (29.01.2009)

China dissatisfied over EU AD move on Chinese fasteners Mr Yao Jian spokesperson of the Ministry of Commerce said that Chinese government expressed dissatisfaction over the EU's final decision to take anti-dumping measures against China-made fasteners. He said that China believed that practices by the EU's in the investigation and verdict on China exported fasteners were inconsistent with WTO rules and EU anti-dumping laws. He added that "The ruling against the Chinese products lacked justness and transparency, with obvious probability toward trade protectionism." Mr Yao said this extremely damaged the legitimate rights and interests of the Chinese fastener manufacturers. China will study and assess the verdict and retain right to appeal to the World Trade Organization against the ruling. (Xinhua)
Source: Other (29.01.2009)

Workers in the Kremikovtzi mine suspend all activities Workers from the Kremikovtzi mine will stop all activities on February 2, because of the lack of normal work conditions. This was announced after an organized meeting of KNSB and representatives of the Economy Ministry today. At today's session together with the workers it was decided that the chief labor inspection together with the prosecutor of the company will prepare guidelines for safe working conditions. A schedule was prepared for the disbursement of work salaries of miners, who have not received their work remunerations since November 2008.We remind you that yesterday syndicates alarmed of the danger that water can overflow the residential district Kremikovtzi and endanger the lives of 35 workers on the site.
Source: news.bg (30.01.2009)

US-EU trade war looms as Barack Obama bill urges 'Buy American' The prospect of a trade war between the US and Europe is looming after "Buy American" provisions were added to President Barack Obama's $820 billion stimulus package. The EU trade commissioner vowed to fight back after the bill passed in the House of Representatives late on Wednesday included a ban on most purchases of foreign steel and iron used in infrastructure projects. The Senate's version of the legislation, which will be debated early next week, goes even further, requiring that any projects related to the stimulus use only American-made equipment and goods. The inclusion of protectionist measures has quickly raised hackles in Europe. Catherine Ashton, the EU trade commissioner, said: "We are looking at the situation. The one thing we can be absolutely certain about, is if a bill is passed which prohibits the sale or purchase of European goods on American territory, that is something we will not stand idly by and ignore." (Telegraph)
Source: Other (30.01.2009)

Kremikovtzi Ends One More Week without Investor The current week is going to end without a designated strategic investor for the Bulgarian troubled steel mill Kremikovtzi, Nina Alexandrova, Deputy Economy Minister said. Alexandrova confirmed that a Sheik from Oman had expressed interest in the Mill, but after finding out about the enterprise's state decided to not go ahead with any offer. According to the Deputy Economy Minister, the Brazilian metallurgy giant CSN and the Ukrainian Smart Group continue to be the only two potential candidates. Both companies have hired lawyers and consultants in Bulgaria to prepare documentation for the eventual purchase of the Mill. "I have never made a commitment to a particular date or deadline. No one has a fixed deadline to give an answer. I have no idea how you envision that answer," Alexandrova said. When asked about the mass protest rallies planned by the Kremikovtzi Trade Unions for February 3, the Deputy Economy Minister said that this was the Union's responsibility.
Source: econ.bg (30.01.2009)

OTzK report BGN 27 million loss and 52% decline in sales Lead and Zinc Complex (OTzK) JSC reported a BGN 26.6 million loss for the fourth quarter of 2008, the company report showed. That loss in 2008 increased to BGN 36.5 million. Net sales income of the company fell by 52% YoY to BGN 28 million solely for the fourth quarter of 2008. For the whole previous years, OTzK reported a 35.8% drop in net sales income to BGN 157.5 million, current liabilities increased by BGN 5.7 million to solely 60 million and the long-term liabilities - by BGN 39.2 million to BGN 71.3 million. The total amount of the liabilities on December 31, 2008, was BGN 131.3 million. Fort hwe whole 2008 the current assets decreased by BGN 23 million to BGN 52.5 million. The long-term assets increased by BGN 54 million to BGN 132.8 million.
Source: investor.bg (02.02.2009)

Steel demand ‘likely to fall by 10%’ The global steel industry faces a difficult two years with a likely 10 per cent fall in demand this year followed by virtually zero growth in 2010, according to Bruno Bolfo, chairman and owner of Duferco, the world’s biggest steel trading company. The comments by Mr Bolfo – whose Switzerland-based company also has a joint venture in steel manufacturing with Novolipetsk, the Russian steelmaker – are the gloomiest remarks about the state of the industry by any senior steel executive during the current downturn. However, some analysts have been at least as downbeat on the industry’s prospects. Mr Bolfo, whose company is based in Lugano, said any steel company that professed to believe that an upturn in the sector was likely in late-2009 was deluding itself. Any pick-up in global steel demand in 2010 would be “small stuff”, said Mr Bolfo. His comments command a lot of attention in the industry since he has a good view of trading patterns in steel on several continents. (Financial Times)
Source: Other (02.02.2009)

Alcomet report BGN 2.6 mln loss in Q4 Alcomet JSC reported a loss of BGN 2.6 mln for the fourth quarter 2008 against a loss of BGN 875 thous a year earlier. According to the unconsolidated report of the company the positive result for 2008 of the Shoumen-based company is BGN 842 thous, or BGN 0.05 per share, which is 4 times down from the previous year. Net sales income dropped 11% to BGN 223.95 mln as compared to 2007. The results come mainly from the lower output sales income as it declines from BGN 245.5 mln to BGN 218.84 mln. The company said that the produced output for 2008 is 43,599 tons, or 3633 tons a month.
Source: profit.bg (02.02.2009)

Rio in asset sale talks with Chinalco Global miner Rio Tinto Ltd said it had held talks to sell some assets to Chinese government-owned aluminum maker Chinalco, its biggest shareholder, reportedly to cut debt by up to $8 billion. Rio is looking at a combination of asset sales, convertible notes and share issues that would generate $15 billion in total and lift Chinalco's Rio stake to more than 11 percent from 9 percent now. In a statement responding to the media speculation, Rio said there was no certainty a transaction with Chinalco would take place. The talks centered on "minority interests in various operating businesses of the Rio Tinto group and also investing in convertible instruments," Rio said.
Source: Reuters (03.02.2009)

Kremikovtzi metallurgists protest again CITUB organized another meeting of representatives of Sofia-municipality, the Economy Ministry and workers in the mine. The Vice President of CITUB Ventzislav Nikolov signaled that the responsibility is being transferred between the Ministry and the institutions and no adequate decision is made. On Monday 30 miners from Kremikovtzi mine suspended operations on the draining of the shaft, which may lead to inundation of the residential district Kremikovtzi. The decision for the suspension of the work was imposed by the General Labor Inspection. CITUB have sent letters expressing concern again, alarming of the potential danger. Kremikovtzi workers are going out on a protest on Tuesday. They will gather on the Alexander Nevski square. It is expected that about 2000 actively working in the factory will gather tomorrow. Employees have last received their salary for October on December 25 2008.
Source: expert.bg (03.02.2009)

Steel sector report a 40% slump in 2008 Steel production in Bulgaria in 2008 fell by over 40% to 1.329 million tons, preliminary data of the Bulgarian Metallurgy Chamber show. A year earlier, Bulgarian steel industry produced nearly 2 million tons. Reduction comes mainly from suspended blast production of Kremikovtzi. The bankrupt company has produced only 428 thousand tons converter steel last year compared to 1.027 million tons in 2007. The total decline in production of steel, founded by continuous method, is because of Kremikovtzi as well - from 1.564 million tons in 2007 to 1.302 million tons in 2008. The other producer - Stomana Industry S.A., preserved its annual production. Collapse in steel occurred in the last quarter of last year and applies to all enterprises in the sector, commented Politimi Paunova, executive of BMC. Aside from that quarter and Kremikovtzi, other companies achieved good results during the first nine months of 2008, Paunova said. The companies at matter are Stomana Industry S.A., Promet, Helios Metalurg and Precise Inter Holding.
Source: Pari (03.02.2009)

Trade unions cancel strike alert in Kremikovtzi steel mill Members of the trade unions have canceled the strike alert in Kremikovtzi steel mill, head of thew Metalitzi federation at the Confederation of Independent Trade Unions in Bulgaria (CITUB) Vasil Yanachkov said. The reason for that measure is that representatives of the Brazilian CSN Company have announced that they would visit Bulgaria tomorrow. “We held a long meeting with at the Ministry of Economy and Energy this evening, which was attended by Smart Group representative who said that they mean business and will apply for Kremikovtzi factory. Besides a letter from the Brazilian company was received few minutes ago, which said that they will arrive in Bulgaria tomorrow to have talks for Kremikovtzi”, Yanachkov said.
Source: Insurance.bg (03.02.2009)

Russia Acquires Stake in Rusal The Russian Federation may acquire a minority stake in Rusal - the world's largest producer of aluminum - by emitting convertible bonds, Rusal CEO Oleg Deripaska said. The deepening financial crisis has prompted him to seek state aid in order to repay billions of dollars in foreign bank debts. Deripaska did not mention any detail regarding Rusal's liabilities. He said that the negotiations with the banks on debt restructuring were not over yet. Whether the Russian government will purchase a minority stake or not will become clear end-February.
Source: Standart (03.02.2009)

Miners demand a new method for the concession fees Miners demand that the concession fees are determined through a new method instead of the one included in the Natural Resources Act. The proposal is part of the anti-crisis measures applied in the Ministry of Economy and Energy by the Bulgarian Chamber of Mining and Geology. Many of the companies demand the termination of the minimal fees that should be paid in the extraction of various resources. They state that this would easen the administrative presure and would lead to payments in case of real extraction of output. Many of the deliveries of the companies are put on hold in the last quarter. Currently coppermaker Asarel Medet has decreased its extracted rock mass by 45% totally as compared to 2008 and the sales income of the company has dropped by 40%. The Chamber also demands to unify the officials granting concessions into one single institution.
Source: Dnevnik (04.02.2009)

Corus to sell majority stake in Teesside Tata Steel, the world's sixth-largest steelmaker, said its Anglo-Dutch unit Corus had signed a memorandum of understanding to sell a majority stake in Corus' Teesside Cast Products business. The company did not disclose the financial details of the deal to sell a majority stake in the business to Italian firm Marcegaglia and South Korea's Dongkuk Steel Mill. Earlier, the Financial Times reported the deal would be worth about $450 million. A Tata Steel spokesman declined to comment on the financial details. In a statement to the stock exchange, Tata Steel said Marcegaglia and Dongkuk would undertake due diligence to finalise the terms of the deal as soon as possible. Tata Steel said Corus would retain a minority holding in the Teesside business, while Marcegaglia would hold the largest equity interest. Marcegaglia and Dongkuk are part of a four-member consortium that has a slab offtake agreement with Corus. Tata Steel said the other two members, Alvory and Duferco Participations Holding, would continue with a revised agreement after the deal.
Source: Reuters (04.02.2009)

Kremikovtzi candidates ready with their final offers Ukraine-based Smart Group sent its project-memorandum for enetering Kremikovtzi to the bongholders and the Ministry of Economy and Energy. Representatives of the Brazilian giant CSN are in Sofia as well, but their meeting is yet to come. They have also prepared their final offer. Until now, both companies were at equal grounds and now only the details would determine who the strategic investor of Kremikovtzi would be. The new operator would enter the troubled steelmaker as soon as the bondholders and the state reach an agreement. Both candidates have expressed their will to preserve the steel mill whole.
Source: Monitor (05.02.2009)

Steel industry backs 'Buy America' in stimulus bill U.S. steel industry representatives urged members of Congress to keep controversial "Buy America" provisions in an economic stimulus bill working its way through Congress, arguing that doing otherwise would effectively undercut American workers with their own tax dollars. While critics of the measure say it's protectionist, steel industry representatives told the Congressional Steel Caucus that they compete against international steelmakers that are subsidized by their own governments. "Without these provisions, we'd be using U.S. taxpayer dollars to bail out the rest of the world," NUCOR steel President and Chairman Dan DiMicco told a Capitol Hill hearing. John Surma, chairman and CEO of U.S. Steel Corporation, noted that American steel producers reduced their air pollution emissions by 67% between 1996 and 2005, while manufacturers in other countries have done little to curb pollution. (The Plain Dealer)
Source: Other (05.02.2009)

Radomir Metal Industries continues to invest Plamen Bonev, president of the Supervisory board of Radomir Metal Industries Mr. Bonev, Radomir Metal Industries celebrates 25th anniversary. What is the most important thing that the people unfamiliar with the company should know? - Radomir Metal Industries is a high-tech large-scale castings and forgings maker. The plant was constructed between 1976 and 1986 and the investments in the mill reach USD 1.5 bln. The production cycle is implemented under the know-how of Japanese Kobe Steel Ltd, improved by the rich experience of specialists at the company. Production of Radomir Metal Industries is used in vital industry sectors as Energetics, Metallurgy, Shipbuilding, Concrete Industry, Mining, Heavy Investment Equipment and 90% of production is for export. The company is certified under ISO 9001-2000 and the systems is constantly being improved. Radomir Metal Industries output is well known in Bulgaria and abroad. Did you manage to expand the markets of the company? -Our partners are not only large enterprises in Bulgaria but world-known companies in Europe, USA and Asia like ABB, Wartsila Propulsion B. V (Netherlands); Wartsila Propulsion AS (Norway); Rolls Royce Marine (Norway); U.S. Steel; Metso Minerals Industries Inc; Xtek Ins; Gontermann-Peipers (India) Ltd.; Mittal Steel Grup; Pt Krakatau Steel (Indonesia). What is the effect of the global financial crisis on the financial state of the plant? - Radomir Metal Industries, like all companies in Bulgaria, feels the negative impact of the crisis. We were worried about the usage of the installations in the end of last year. As for now we managed to secure the necessary minimum based on the signed contracts. The good thing is that our large foreign customers continue to seek our products. Unlike many of the Bulgarian enterprises, forced to freeze their investment projects, the management of Radomir Metal Industries was unconditional that the started projects must be finalized at any cost. For the last years we invested EUR 15 mln in our attempt to improve and modernize the production process. Our primary goal is to constantly improve the quality of our output and to expand the range of the offered products in order to stay competitive. What are the other directions that the management team works on? -We pay very close attention to the workforce at the plant as it is a major factor in the production process, no matter how modern and mechanized it is. So training courses on the basic specialties take place each year, as well as foreign language courses. Another important direction for development is the environmental protection. We invested a lot in this direction so that we achieve safe operations. As a result of this the Ministry of Environment and Water granted an integrated permit to Radomir Metal Industries in 2008. According to it we have to implemet a lot of measures so that we correspond to the EU requirements of environmental protection.
Source: Pari (06.02.2009)

50% decrease of the mining industry forecasted A decrease of the mining industry by 30-50% is expected. This was announced by engineer Vanya Grigorova from the Bulgarian Geological Chamber. She added that in order to protect the personnel from lay-offs the Chamber will demand governmental aid. A letter will be sent to the Economy Ministry, which will demand a liberation from bank obligations for a 24-month term. Representatives of the Chamber will insist on taking measures for the prevention of the illegal extraction and the more effective use of the industry's resources.
Source: news.bg (06.02.2009)

EU steel market: facing an unprecedented downturn in 2009 Due to the intensifying impact of the global credit crisis, spreading from the financial sectors into other parts of the economy, the EU economy has been pushed into a severe recession at the start of 2009. The latest forecasts of EUROFER’s Economic Committee show EU GDP growth falling this year by 1.9%; a slight improvement in economic conditions is pencilled in for 2010. The significant deterioration in economic fundamentals since autumn 2008 is fully reflected in the outlook for the EU steel using industries; the first half of this year will see output falling by 10% y-o-y. The second half is expected to see a gradual easing of the downward trend, but on balance production in the steel using sectors will still fall 7-8% in 2009. Most sectors will see a mild improvement in 2010. The EU steel market is severely impacted by the recession and will be facing an unprecedented downturn this year. The outlook for the first half of 2009 is for a continuation of the double-digit y-o-y decline in real consumption registered in Q4’08. As a result, apparent consumption will drop by 29%% y-o-y in the 1st quarter and by a further 23% y-o-y in the 2nd quarter. (EUROFER)
Source: Other (06.02.2009)

Kremikovtzi Potential Investors Claim Lasting Interest; Outcome Remains Unknown The Ukrainian "Smart Group" company has requested yet one more extention of the negotiations over the Bulgarian troubled steel mill "Kremikovtzi," the leader of the KNSB trade union at the mill, Vasil Yanachkov, told the Darik radio Friday. According to the union representative, the Ukrainians have already submitted all necessary paperwork, but the outcome would become more clear no earlier then Monday. It is further expected that a meeting is going to be held Friday with the only other candidate to invest in the Mill - the Brazilian giant CSN. The Bulgarian Economy and Energy Ministry has confirmed for the Darik radio that a meeting with CSN was held Thursday, adding that it has been a formal one and needed a follow-up. The Ministry's spokesperson said that CSN continued to be interested in "Kremikovtzi", but declaimed to offer any details about the Thursday meeting. The Economy Ministry further says that the Ukrainian "Smart Group" has not withdrawn from a possible contract either, but failed to clarify if the Ukrainians have already submitted the required memorandum. Lyudmil Pavlov, leader of the other trade union at the Mill - "Podkrepa" also said that he was informed that "Smart Group" has submitted the necessary paperwork. The trade unions have not been invited to the meetings with the two potential investors.
Source: econ.bg (06.02.2009)

4 defendants about Kremikovtzi and CSKA Sofia City Prosecution applied in the court a detailed prosecution act against four people for withdrawal of BGN 36.1 mln from the metallurgical plant Kremikovtzi and the football club CSKA. Two of them are the ex-CEO of the steelmaker and member of the Supervisory Board of CSKA –Alexander Tomov, and his employee Alexander Garibov. The other two, accused of embezzlement are the corporate secretary of Kremikovtzi – Bozhko Bonev and the member of the Board of Directors – Ivan Ivanov.
Source: Pari (09.02.2009)

Metallurgical company will do waste disposal Metallurgical company Radomir Metal Industries JSC will participate in the contest for waste disposal in Radomir Municipality, said CEO Lyudmil Alexandrov. Radomir Metal Industries JSC is the biggest company on the territory of the Municipality and the second biggest in the District. The unconventional decision was made due to the 5-fold increase in the waste tax for enterprises, voted by the Municipal Council. The tax rose from 2 per mil to 10 per mil, Alexandrov said. According to preliminary estimates, the Municipality would receive BGN 1.7 – 1.8 mln. Mr. Alexandrov said that the realistic value of the order is several times lower and many companies would be interested in undertaking it.
Source: Trud (09.02.2009)

EU imposes 24% tariff on Chinese and Moldovan wire rod European Union has imposed tariffs as high as 24.6% on wire rod from China and Moldova to help EU producers compete against cheaper imports. The duties punish Chinese and Moldovan exporters for selling wire rod in the EU below cost. The levies cover about EUR 310 million of imports in 2008 of the product, which is used in construction. European Commission said that EU producers suffered material injury as a result of the dumped imports. It may be noted that China and Moldova increased their combined share of the EU wire rod market to 6.3% in the 12 months through March 2008 from 1.4% in 2004. This is the preliminary result of an inquiry opened in May 2008 that also covers Turkey, which is being spared the trade protection because the commission found no price undercutting by Turkish exporters. (Bloomberg)
Source: Other (09.02.2009)

CSN ordered restoring the coal supply for Kremikovtzi Brazilian giant CSN will order the restoration of the coal supply for the troubled steel mill Kremikovtzi, said CITUB union leader Vassil Yanachkov. Both contenders are ready to supply the steelmaker with coal as the moment. However, Yanachkov said that the coal provision has nothing to do with the choice of a strategic investor that is to enter the plant. Negotiations with both companies, CSN and Ukraine-based Smart Group, continue. Even if the coal supply is restored, this would restart the operations only at the coke-chemical unit.
Source: econ.bg (11.02.2009)

BHP BMA rules out cancellation of old coking coal contracts Japanese steelmaker BHP Billiton Mitsubishi Alliance said that metallurgical coal buyers have accepted that sagging global steel demand does not warrant the cancellation of all unwanted contract tonnage in the current fiscal year, but they are still holding out for suppliers to cancel some high priced fiscal 2008 term deliveries. BMA kicked off FY 2009 talks with their North Asian customers in late January 2009 and have told buyers that a contract is a contract. However, buyers are still negotiating with their suppliers to reduce the delivery of a portion of their outstanding FY 2008 contracts. Previously, market sources said that Asian steel mills are finding it difficult to take delivery of their outstanding contracted FY 2008 coal tonnages and buyers were hoping that the current situation could be considered a force majeure condition. (Platts)
Source: Other (11.02.2009)

Steel demand 'collapses': ArcelorMittal ArcelorMittal, the world's biggest steel group, reported a huge loss for the last quarter of 2008 and said it would slash production and jobs this year as demand plummets. For the final three months of 2008, the group reported an operating loss of USD 3.5 billion on falling demand and writedowns on stock in contrast to an operating profit of USD 3.3 billion in the equivalent period of 2007. Net losses were USD 2.6 billion and sales fell 37 per cent to USD 22.1 billion as demand plummeted from the key auto and construction sectors. "The decline resulted from a collapse in demand for steel products and a sharp fall in prices in the fourth quarter as a result of the global economic crisis," the company said in a statement. In response, ArcelorMittal cut production by 45 per cent in the fourth quarter and will continue to reduce output in the first quarter until stocks have been used up, chief financial office Aditya Mittal said. The group is also implementing a voluntary redundancy program to cut 9,000 jobs or three per cent of its global workforce, but the measures might be extended resulting in more layoffs, he added. (Associated Press)
Source: Other (12.02.2009)

Chinese investment in Rio Tinto Anglo-Australian miner Rio Tinto has announced that China's state-owned Chinalco is to invest a further $19.5bn in the business. The move - China's largest investment in a foreign company - could see Chinalco increase its stake in Rio to 18% from the current level of 9%. The news came as Rio reported a 7% fall in 2008 profits to $9.2bn. Global commodity prices hit record highs last summer before falling back sharply as the world economy slumped. Rio said the fresh investment from Chinalco "creates a pioneering strategic partnership". The deal will also allow Rio to reduce its debts, which are estimated at $39bn. Chinalco's $19.5bn investment is made up of $12.3bn being spent on stakes in nine of Rio's mining assets, and $7.2bn on Rio bonds that can be converted into shares. The announcement comes three days after Rio said non-executive director Jim Leng, who had been about to take over as chairman of the firm, had resigned. Mr Leng quit after disagreeing with the board about how Rio should tackle its debt burden. (BBC)
Source: Other (13.02.2009)

Minmetals offers AUD 2.6bn for Oz Minerals Chinese trading group Minmetals is offering AUD 2.6bn to acquire Oz Minerals. Minmetals and Oz Minerals said the transaction, pitched at 82.5 cents a share or 50 per cent above Oz Minerals’ last traded price, will pay off all Oz Minerals’ outstanding debts and maintain the company’s mining activities, which were under threat of being sold or liquidated. ”Minmetals intends to continue to operate Oz Minerals’ portfolio of assets and its acquisition will provide the opportunity to support the development of Oz Minerals’ assets and projects,” Zhou Zhongshu, chairman of Minmetals, said in a joint statement. Oz Minerals has been trying to unload assets across Australia, Southeast Asia, North America and North Africa to help it meet a February 27 deadline to repay a AUD 140m loan. (FT)
Source: Other (16.02.2009)

The three-year negotiations between Bulgarian state and Dundee Precious Metals, the Canadian investor of Chelopech Mining, are in their final stage. By the end of March 2009, Bulgaria and Dundee will set up a joint company for yielding and processing of ore. The plans for the new installation for processing of ore concentrate will cost USD 160 million.
Source: Pari (17.02.2009)

The payment of the wages for November 2008 goes very difficultly in the plant Kremikovtsi, announced by the trade-unions. The majority of the 5 000 workers have not still received their salaries for the eleventh month of the 2008. For the payment it is relying solely on the few products that the company continues to produce and sell.
Source: profit.bg (17.02.2009)

Taiwan's China Steel to cut prices by 14 pct in Q2 China Steel, Taiwan's top steelmaker, said it will slash domestic prices in April and May on weak demand during the global downturn, but it expects a pickup on stronger demand from China. Asia's 17th largest steelmaker said it will lower the prices by an average 14 percent, its second straight cut, reflecting weak demand. "The decision is aimed to help local downstream makers to aggressively win orders in overseas markets," China Steel said in a statement. "Steel prices in most countries have stablized on supply cuts. Those of China, in particular, have risen since late November," it said, adding the cut will apply to April and May only, because China Steel is optimistic about future prices in June. (FT)
Source: Other (18.02.2009)

American steel shipments down in last December Recently, American Iron and Steel Institute (AISI) said that American shipments in last December suffered a month-on-month down of 11.6 percent and a year-on-year down of 45.7 percent. AISI said that American mills delivered steel products of 4.6 million short tons; however, the number of November and the previous December hit 5.22 and 8.5 million short tons respectively. Through analysis and comparison, it is indicated that demand for steel products from freight service center and distributors shrank by 6.2 percent. The demand from automobile and construction industry was down by 11.2 percent and 11.6 percent respectively. However, oil and natural gas industry was an exception, enjoying a pick-up of 5.6 percent in demand. Generally speaking, the members of AISI hold 70 percent capacity of the whole North America. (Yieh Corp)
Source: Other (18.02.2009)

Gaz de France is withdrawing from NPP "Belene" The French company "Gaz de France" (GDF Suez) has decided to withdraw from the project for construction of the Bulgarian nuclear power plant in Belene in order to concentrate over its other projects, said a spokesman of the company. The Belgian branch of GDF-Suez Electrocabel was negotiating with the German company RWE for participation in the project which is worth 4 bln euro. We decided not to continue with this project”, has claimed the spokesman, adding that the company was evaluating its strategic priorities among the various projects. GDF Suez is trying to win a share participation in the construction of second and if possible third French reactors of new generation, as well as in energy projects in UK, Romania and Abu Dhabi. Sources related to the Bulgarian project, have claimed that the global economic crisis makes it difficult to raise funds.
Source: Dnevnik (19.02.2009)

Valin, in Talks With Fortescue, Raises Debt Concerns China’s Hunan Valin Iron & Steel Group said it has concerns about Fortescue Metals Group Ltd.’s “high” debt level after it confirmed talks to invest in Australia’s third-largest iron ore producer. “We do have concerns that they have rather high debt levels and the financial risks are quite big,” Valin’s general manager Li Jianguo said in an interview in Beijing. “We haven’t hired a banker on this because the talks are still in a very initial stage.” Fortescue, with USD 3 billion in debt, sold shares in December to pay bills as the global recession slashed asset values and commodity prices. (Bloomberg)
Source: Other (19.02.2009)

Copper firm Aurubis goes ahead with Bulgarian plans Global copper smelter Aurubis will stick to its Bulgarian investment plans in spite of the global financial turbulence and its grim results for the first quarter of the financial 2008/2009, the company’s communications head, Michaela Hessling, told Dnevnik. Aurubis, which renamed following the merger of Norddeutsche Affinerie and Cumerio, owns a copper plant in Bulgaria’s central town of Pirdop. While demand for primary copper is weakening, the cathode copper market is holding up relatively well, with Europe needing 4.3 tonnes annually, a million of it imported from South America, the company said. Thus it is imports and not production on the continent that should be reduced, according to Hessling. The Pirdop facility, which ships the bulk of its produce to southeast Europe, last year cut anode copper output to treble cathode copper capacity. It is now working at full throttle and there will be no reduction provided that things do not mess further up, Aurubis said, adding it will continue to keep a close eye on economic developments in the region in order to adjust market policies if necessary. Aurubis rounded off first-half 2008/2009 with a loss of EUR 124 million, blaming it on the sharp drop in copper prices over the past six months, with a tonne trading at USD 3,196 on the London Metal Exchange on Thursday against around USD 9,000 in early 2008. Its Bulgarian unit exports around 90% of its output, mostly to Turkey, Greece and the Black Sea region. On the domectic market, it sells semi-manufactured metal products to Sofia Med.
Source: Dnevnik (19.02.2009)

Baosteel to Take Over Rivals in China Stimulus Plan Baosteel Group Corp., China’s biggest steel producer, will take over two rivals as part of the nation’s plan to create bigger steelmakers to gain bargaining power for iron ore, according to the China Iron and Steel Association. Baosteel will take over Ningbo Iron & Steel Group and Baotou Iron & Steel Group, Chi Jingdong, the association’s secretary-general, told. China, which produces one-third of the world’s steel, is pushing for consolidation in the industry to boost its competitiveness and raw material purchasing power. The government is implementing a 4 trillion yuan ($585 billion) stimulus package to boost flagging economic growth as it faces the worst financial crisis since the Great Depression. (Bloomberg)
Source: Other (20.02.2009)

Steel Profiles JSC reported a net loss of BGN 100 thous as to December 31, 2008, compared to a loss of BGN 9 thous a year earlier. Revenue from operations is BGN 553 thous, from ready output – BGN 161 thous, sales of commodities – BGN 208 thous, of services – BGN 11 thous, and other revenues – BGN 173 thous. Meanwhile the operative and financial costs are BGN 789 thous and BGN 451 thous, respectively. Uncertainty in the future of Steel Profiles is due to the eventual drop of the output prices and fluctuation of the materials prices.
Source: Banker (23.02.2009)

Indonesia may buy 1.5 million tonnes of steel in 2009 Indonesia may import significantly less steel coils, slab and pig iron in 2009 as stockpiles in the country have swollen and the global recession has slowed manufacturing. Mr Hidajat Triseputro ED of Indonesian Iron & Steel Industry Association said that it may buy 1.5 million tonnes of steel from abroad in 2009 as compares with 10 million tonnes imported in 2008 and 6 million tonnes in 2007. He added that "At the moment the utilization rate at Indonesian steel plants is about 40% of the average rate because demand slowed and we imported a lot last year." Central Statistics Bureau said that Indonesia's manufacturing sector grew 1.85% from the previous year in the last quarter of 2008, its slowest rate in 8 years. Indonesia consumes about 9 million tonnes of steel annually and output may fall by 30% from last year's 5.3 million tonnes. (Bloomberg)
Source: Other (23.02.2009)

Copper miner Asarel Medet to lay off 193 workers Bulgaria’s open pit copper miner Asarel Medet will downsize its workforce as sliding global copper prices caused it to trim its annual output, said the company’s human resources director, Aleksander Chobanov. In February copper plummeted to USD 3,300 a tonne from over USD 9,000 a year earlier. We are fighting to keep as many workers as possible, Chobanov noted, adding that all dismissed employees will be compensated depending on years of service at the plant. Asarel will rethink its production plan as soon as the global markets recover and will invite good workers to come back to their jobs. The firm slashed its production target by 45% compared to last year’s level, a move that will affect processed copper volumes as well. As it fights back against the downturn, Asarel will also optimise its organisation structure and cut costs. The firm’s investment plan has been trimmed by 50% in comparison with last year and could be further adjusted to match possible new market conditions by the end of 2009.
Source: Dnevnik (26.02.2009)

CSN now sole racer for Kremikovtzi as Smart pulls out Brazilian mining giant CSN remained the only suitor of Bulgaria’s debt-saddled steel mill Kremikovtzi, after Reuters reported that Ukrainian Smart Group has scrapped plants to reach a deal with creditors and heal the plant. Smart cited private creditors’ rejection of its recovery plant for the factory, which comprised an investment strategy of EUR 220 million and paying off EUR 80 million of the debts, with the rest converted into equity capital. On the other hand, a representative of the bondholders, who are the plant’s biggest creditor, said that even though the proposal was unacceptable, they were ready to start talks in principle but only if Smart Group proved it had the resources to fulfill its commitments. They are obviously dissatisfied with the state of the metals market, but it is discouraging for any investor, Energy Minister Petar Dimitrov said as quoted by Focus news agency. On the other hand, the Brazilian bidder and the government are still forging out the parameters of the integrated pollution prevention and control permit and of the mill’s mountain of debts to state-run suppliers and government institutions. Meanwhile, the list was completed of the receivables of the plant’s creditors. The government ranks on top with BGN 696 million, but it could be overcome by creditors if the Supreme Administrative Court confirms the appeal by court-appointed receiver Tsvetan Bankov.
Source: Dnevnik (26.02.2009)

Russian Company Finprominvest Interested in Buying Kremikovtzi Bulgaria's Ministry of Energy and Economy has received a letter from the Russian company Finprominvest expressing its general interest in the troubled steel-maker Kremikovtzi, the Bulgarian private Darik radio reported. According to Vasil Yanachkov, a trade union leader at Kremikovtzi, Finprominvest is registered in Finland, and has both Russian and Western shareholders. Earlier on Wednesday, Bulgaria's Economy Minister, Petar Dimitrov, announced one of the two main bidder for the purchase of Kremikovtzi, the Ukrainian Smart Group, had pulled out its offer. The other main bidder, the Brazilian CSN, is still interested in buying or operating the plant, according to Dimitrov.
Source: Darik Radio (26.02.2009)

Finns Bid for Kremikovtsi Steelworks There is a new candidate buyer for the Kremikovtsi steelworks, it transpired the day when the Smart Holding of Ukraine withdrew from the negotiations for the purchase of the insolvent metallurgical giant. A prospecting letter from the Finprominvest company was received in the Ministry of Economy and Energy. The company is registered in Finland, trade unions rep in the plant Vassil Yanachkov told the BTA. Russia also holds a share in Finprominvest, he added. The reason for the withdrawal of Smart Holding is lack of support on the part of the Kremikovtsi creditors, money.bg informed. The negotiations with another candidate buyer CSN of Brazil are also underway.
Source: Standart (26.02.2009)

Vale, Rio, May Get 30% Iron Ore Price Cut After Slump Cia. Vale do Rio Doce, Rio Tinto Group and BHP Billiton Ltd., the world’s largest iron ore producers, may get 30 percent less for the raw material this year under annual contracts after a slump in steel demand. The drop, based on the median estimate of eight analysts surveyed by Bloomberg News, would snap six straight years of gains. Global steel output dropped 24 percent in January from a year earlier, the World Steel Association said Feb. 20. The price of hot-rolled steel coil, used in construction and cars, has fallen 53 percent since trading at a record in July, according to data compiled by Steel Business Briefing. China’s steel industry, the world’s largest, is seeking price cuts from iron ore suppliers after prices last year for raw materials and other ingredients such as manganese and coking coal soared to records. A 30 percent decline would be the biggest drop since at least 1981. (Bloomberg)
Source: Other (26.02.2009)

EUROFER welcomes AD against Chinese wire rod EUROFER welcomes the European Commission's proposal to impose provisional anti-dumping measures of 25% on imports of wire rod from China. Mr Gordon Moffat director general of EUROFER said that "The proposed level of measures correctly addresses the injury suffered from dumped EU import surges of Chinese wire rod. We very much welcome the proposed measures against China, they are timely, coming at a very critical period on the market." He added that "However, we do not understand the Commission’s decision to exclude Turkey from the proposed imposition of measures: significant dumping margins have been found by the investigation. The final stage of the investigation will allow clarifying this outstanding issue." (SteelGuru)
Source: Other (26.02.2009)

Port Lom is working with reduced production capacity. By the end of the week the processing of 500 tons of steel and 700 tons of grain for export and the imported 2800 tons coal will finish. Since the beginning of November 2008 the complex has been working with about 10 percent of its capacity. In February 2008 Port Lom processed 104 thousand tons, but now - only 34 thousand tons of cargo. In progress is anti-crisis program created last October. The measures are aimed at strengthening the financial discipline, dismissal of employees in civil contract, pensioners and people on the replacement, explained the executive director Borislav Mihov.
Source: econ.bg (27.02.2009)

Three procedures for prospecting of oil and gas will be started - in Unit 1-8 in Altimir, Block 1-7 in Tarnak and Block 1-6 in Pelovo. The duration of permits for prospecting will be 5 years. The government has also authorized the conclusion of amendment to the concession contract for the extraction of copper-porphyry gold ores of the deposit Elatsite, concluded with Elatsite-Med JSC. According to it Etropole municipality will receive 17% of the concession fee, Chavdar - 5.5%, Mirkovo – 5%, Chelopech - 1.5% and Zlatitsa – 1%.
Source: expert.bg (27.02.2009)

Asarel-Medet lays-off 200 people The Panagyurishte mining company Asarel-Medet is planning lay-offs of workers in connection to the world economic crisis, Alexander Chobanov, HR manager, announced. As a result of the big breakdown of the international price of copper, the yearly production schedule of the company is reduced. This forces a reduction of personnel, due to which 193 work place have been declared in the Employment agency for downsizing. "We are performing a procedure for selection, developing different scenarios and still making everything we can for the real lay-off to be as minimum as possible", Alexander Chobanov said. All discharged workers and employees would receive compensations depending on the length of service in the company. Production programme will be reconsidered at the next favorable turn of events on the international markets and the workers, who have been laid-off with a good assessment, will be invited to take their previous positions. This has been agreed upon with the syndicates as well.
Source: Standart (27.02.2009)

China mills push steel output above 2008 levels A blind rush back to production by Chinese steel mills has pushed China's crude steel output back up above the 2008 average, threatening to worsen oversupply and ruin profitability, a top industry official has warned. 'Demand has not yet recovered and there has been no apparent effect from government policies aimed at boosting domestic consumption, but the extra crude steel output from the mills is incredible,' Wu Xichun, honorary chairman of China Iron and Steel Association, told an internal meeting of the body last week. According to a transcript, Wu said crude steel output in China was expected to top 1.41 million tonnes a day in mid-February, translating into estimated annual production of 517 million tonnes in 2009 if maintained.
Source: Reuters (27.02.2009)

US Steel cuts 1500 jobs in Canadian operations United States Steel Corporation announced that further consolidation is necessary to maximize efficiency while meeting customer demands. It said that “Operations to be temporarily idled over the next several weeks are the finishing and coking operations at Hamilton Works at Hamilton in Ontario and the steelmaking and finishing operations at Lake Erie Works near Nanticoke in Ontario.” The release added that “Coking operations at Lake Erie Works will continue production.” It said that “Approximately 1,500 employees will be affected.” The release said that “Earlier, US Steel representatives met with federal and provincial officials as well as representatives of the United Steelworkers at these facilities to notify them of the temporary idling.” US Steel plans to continue to temporarily concentrate production at Mon Valley Works near Pittsburgh, Gary Works in Gary and Fairfield Works near Birmingham.
Source: Other (04.03.2009)

Brazil CSN Remains Only Main Bidder for Bulgaria Steel Mill Kremikovtzi The Brazilian metallurgical giant CSN (Companhia Siderurgica Nacional) remains the only main candidate for the purchase of the troubled Bulgarian steel mill Kremikovtzi. This was announced Wednesday by Bulgaria's Minister of Energy and Economy, Petar Dimitrov. Dimitrov explained his Ministry had conducted only general talks with the Russian company Finprominvest, which made public its interest in Kremikovtzi last week, shortly after the Ukrainian Smart Group announced its withdrew its interest in buying or running the Bulgarian steel factory. According to Vasil Yanachkov, a trade union leader at Kremikovtzi, Finprominvest is registered in Finland, and has both Russian and Western shareholders.
Source: Darik Radio (05.03.2009)

Eurofer withdraw anti-dumping complaint European steel industry association Eurofer said it had decided to withdraw an anti-dumping complaint against imports of cold-rolled flat stainless steel from China due to the economic downturn. "It has become evident that the present economic and market crisis has rendered the anti-dumping complaint on stainless steel cold rolled obsolete," the Brussels-based association said in a statement. "In the light of this, Eurofer has decided to withdraw this case with a view to refilling at a moment which would give a sounder basis for measures which would more adequately address the injury coming from any new surge of imports," it said. Eurofer said the European Commission, which rules on anti-dumping cases in the European Union (EU), had made the commitment to install a monitoring mechanism which will provide almost real time information on import flows and to use all the possibilities for an early and accelerated imposition of measures in the event of a re-filed case provoked by a surge of imports. (Xinhuanet)
Source: Other (05.03.2009)

Bulgaria Admits Ailing Steel Maker Sale Hits Stalemate Bulgaria's economy and energy minister admitted talks over the purchase of insolvent steel mill Kremikovtzi have been bogged down, blaming it on low prices on foreign markets. "The state has been lending a helping hand to the trade unions at Kremikovtzi for more than a year already. But you can't bring an investor here at a gunpoint," Minister Petar Dimitrov said. He confirmed that Brazilian steel maker CSN has expressed interest in Kremikovtzi, but said investments in the ailing Bulgarian steel maker at this point will not be profitable. No progress has been reported so far in negotiations with Brazil's CSN. The ministry has conducted only general talks with the Russian company Finprominvest, which made public its interest in Kremikovtzi last week, shortly after the Ukrainian Smart Group announced its withdrew its interest in buying or running the Bulgarian steel factory.
Source: Darik Radio (05.03.2009)

Hyundai Heavy wins handful of shipping orders for next 3 years Hyundai Heavy Industries has delivered over 1,500 ships to about 240 owners in some 50 countries since 1974 and currently, it has a backlog of orders that will keep it working for the next 3 years. And as a result, the company is producing, on average, one ship every two days. Another strong point is its flexibility. All its ships are tailored made to the satisfaction of every individual shipping company's specific requirements. And it has competitiveness by building high quality ships at reasonable price. Hyundai Heavy is always looking to come up with new ideas to improve its ship manufacturing process and take full advantage of its numerous docks. Hyundai Heavy Industries beat the world's largest delivery record for large sized vessels in 2008, delivering 102 vessels, while also raking in KRW 20 trillion in 2008. (Arirang.co.kr)
Source: Other (06.03.2009)

Kremikovtzi Trade Unions: End of March Will Prove Fatal for Mill The troubled "Kremikovtzi" steel mill will have to halt all mining activities and several productions at the end of March because of the lack of interested investors. The information was provided Friday by the "Podkrepa" trade union representative, Luydmil Pavlov. Pavlov, who spoke for Darik radio, informed that Kremikovtzi's management had presented Thursday their account for the mill's activities and expenses, adding that the workers were still planning to organize mass protest rallies in Sofia on March 9. Pavlov further said that the end of March was the absolute deadline to secure an investor in order for the plant to continue functioning. The union representative explained that currently the expenses were much greater than the profits and defined the end of the month as "fatal" for the mill's production. According to Pavlov, the mill's workers have not been paid their December, January and February salaries.
Source: Darik Radio (06.03.2009)

Kremikovtzi Trade Unions: End of March Will Prove Fatal for Mill The troubled "Kremikovtzi" steel mill will have to halt all mining activities and several productions at the end of March because of the lack of interested investors. The information was provided Friday by the "Podkrepa" trade union representative, Luydmil Pavlov. Pavlov informed that Kremikovtzi's management had presented Thursday their account for the mill's activities and expenses, adding that the workers were still planning to organize mass protest rallies in Sofia on March 9. Pavlov further said that the end of March was the absolute deadline to secure an investor in order for the plant to continue functioning. The union representative explained that currently the expenses were much greater than the profits and defined the end of the month as "fatal" for the mill's production. According to Pavlov, the mill's workers have not been paid their December, January and February salaries.
Source: Darik Radio (09.03.2009)

Bulgaria Steel Workers Rally over Payments, Sale Talks Stalemate Workers at Bulgaria's indebted steelmaker Kremikovtzi will hit the streets once again on Monday over unpaid salaries and the lack of an investor in the ailing plant, piling pressure on the coalition ahead of the summer elections. Trade unions say that the closure of the indebted plant will not be averted should the government fail to find a buyer by the end of March. Bulgaria's economy and energy minister recently admitted talks over the purchase of the insolvent steel mill have been bogged down, blaming it on low prices on foreign markets. Brazilian steel maker CSN remained the only main bidder for the plant, but no progress in talks has been reported so far. The ministry has conducted only general talks with the Russian company Finprominvest, which made public its interest in Kremikovtzi last week, shortly after the Ukrainian Smart Group withdrew from buying or running the Bulgarian steel factory.
Source: Darik Radio (09.03.2009)

Big steel and aluminium companies lobbying against climate change policy Steel and aluminium companies will be lobbying politicians representing coal mining, and metal making and metal working towns in an attempt to overhaul the Federal climate change policy. Rio Tinto, BHP Billiton and Xstrata, together with their lobbyists, are targeting the politicians ahead of the 10 March release of the draft laws for the Carbon Pollution Reduction Scheme. BHP Billiton and BlueScope Steel are being represented by lobbyist Gavin Anderson and Company, who will push for their cause in Canberra. Big polluting companies are asking for more compensation, claiming to have been unfairly targeted. Australia’s Federal Government’s climate change policy has been the target of both sides of industry, with environment groups criticising it for giving away too many free permits and too much compensation. (Metal Worker)
Source: Other (09.03.2009)

Bulgaria Economy Minister Backs Steel Workers' Demands The demands of the protesting workers from the troubled steel mill "Kremikovtzi' had received the support of the Bulgarian Economy and Energy Minister, Petar Dimitrov. The news was announced by Vasil Yanachkov, from the "Metalici" (Steel Workers) trade union. Yanachkov spoke upon conclusion of his meeting with the Economy Minister. Workers at Bulgaria's indebted steelmaker Kremikovtzi hit the streets once again Monday over unpaid salaries and the lack of an investor in the ailing plant, piling pressure on the coalition ahead of the summer elections. The workers demand full investigation of the dealings of the plant since its privatization, agreements for compensation programs for all of the mill's employees, and an emergency meeting with the Brazilian steel maker CSN, the sole bidder for the plant, to finalize the sale of "Kremikovtzi". Yanachkov said that Petar Dimitrov had expressed hope the results from negotiations with CSN would become known in the very near future. The trade union functionary further pointed out that discharge of workers, while negotiations are ongoing, was unacceptable.
Source: Darik Radio (09.03.2009)

OTzK sold 3.7 tons of lead and zink in January Sales income of Lead and Zinc Complex JSC – Kurdzhali (OTzK) in january is BGN 7.784 mln. The volume of the realized output of lead and zink in the first month of the year is 3.720 tons. Profit of basic operations is BGN 889 thous, while the net financial results are BGN 441 thous. Net profit is BGN 448 thous, the company said.
Source: Darik Radio (10.03.2009)

Commercial dispute stalling operations at Kremikovtzi The deal between Bulgarian debt-saddled steel mill Kreimkovtzi and Brazilian firm CSN is hamstrung by a mere commercial dispute, sources close to the matter told Dnevnik. The two sides are now in talks over coke production that will be purchased by the prospective investor. The Brazilian company will finance the purchase and transportation of the coking coal and then pay only the positive difference between the price of the produce and the loan for raw material and shipment. However, the plant and the Brazilian firm remain locked in stalemate over the coke selling price. In spite of the dispute, the scheme is the optimal solution and has won the support in principal of Kremikovtzi, CSN and the government. Such a deal would enable the struggling steelmaker to generate revenue until its recovery plan is given the go-ahead and its assets switch owners. Taking its cue from Indian giant Arcelor Mittal, which walked out on the plant last autumn, CSN would not pledge any investment in the insolvent plant without guarantees it would be assigned the implementation of the rescue plan and be a potential new owner. After the court has considered the appeals against the list of creditors drawn up by receiver Tsvetan Bankov, Kremikovtzi’s creditors will meet to decide whether to launch a recovery plan or wind up the business. A thousand Kreimkovtzi workers staged protests in Sofia yesterday calling for drafting a rescue plan even if prospective investors pull out of the talks. Unions urged for a flexible social programme involving retraining of young workers, cutting the retirement age for the older ones and compensating all the rest by 30 monthly salaries.
Source: Dnevnik (10.03.2009)

Radomir Metal to cut down staff Radomir Metal Industries, the large-scale castings and forgings maker, will release 600 workers, executive director of the plant Liudmil Alexandrov announced. This is the result of decline of demand by 50-60% and at present, the plant processes monthly only 100 tonnes of metal. Until the end of last year, the employees were 1,100. After the cut down, about 400-450 people will remain in the factory.
Source: Pari (10.03.2009)

Radomir Metals to more than halve headcount Bulgarian steelmaker Radomir Metals Industries will lay off another 600 workers only a month after the first wave of job cuts, having lost most of its US, European and Asian markets in half a year. This was a deadly blow for the company, which ships 95% of its produce, said executive director Lyudmil Alexandrov. The plant manufactures metal castings and machine-building products for the energy, metal and mining industries. Monthly output ranged between 500 and 600 tonnes a year ago but now it has dwindled fivefold against the backdrop of plummeting orders. In January, Radomir Metals dismissed 100 people of its total workforce of 1,100 at the time, but a further 600 lay-offs are inevitable, explained Alexandrov. None of the capacities will be idled at this stage but the outlook for a rebound in orders is pretty dark as markets are unlikely to check the downfall by the end of the year. Last year the plant registered the steepest fall in American orders, and in early 2009 it was shut off from the European and the Asian markets. In 2008 the company invested EUR 7.5 million to boost production capacity, banking on a 20% rise in output. It built a new furnace and purchased cutting-edge metal processing equipment.
Source: Dnevnik (10.03.2009)

Recovery signs - World Steel sees steel demand improved by end of 2009 Global demand for steel is down by around 20% at the moment, but with destocking nearing to an end, the industry is likely to see some signs of recovery by the end of 2009. Mr Ian Christmas director general of the World Steel Association said that "I would be very surprised if there were not green shoots out there by the end of 2009. Stocks are very low and we see destocking coming to an end. By the end of 2009, I'm sure some steel companies will say 2010 is looking much better than we thought this time last year." Mr Christmas said that “Steel demand and prices have collapsed since mid 2008 after consumption from the major steel consuming sectors such as automotive and construction came down sharply, forcing producers across the globe to slash output sharply. The capacity usage across the sector is around 50% to 60% currently, with global production down 24% in January.”
Source: Reuters (10.03.2009)

Social Ministry ready to assist the laid-off Kremikovtzi workers Ministry of Labour and Social Policy has prepared a rapid reaction plan in case of lay-offs at Kremikovtzi, said Dep.Minister Dimitar Dimitrov. National Employment Agency is ready to consult and redirect towards the primary labor market and subsidized employment programmes, as well as towards measures for training and re-qualification. During the strike on March 9. metallurgists demanded that the Government engages with a program including requalification, early retirement schemes and one-time compensation of 30 work salaries.
Source: Darik Radio (11.03.2009)

I hope we will reanimate Kremikovtzi steel mill 'I hope we will reanimate Kremikovtzi steel mill so not to have such dramatic picture. Talks with Brazilian company CSN are underway.' This is what Minister of Economy and Energy Petar Dimitrov said. He said the Trade Unions the deal with CSN was supposed to be clear in January. Bulgaria has to decide whether to have Kremikovtzi after the crisis, Dimitrov said. He added prognosis for the end of the global financial and economic crisis are moving to 2010. Kremikovtzi has no unpaid dept to foreign companies. The only companies to which the steel mill has not paid its dept are Bulgargaz and the National Electric Company.
Source: Agency Focus (11.03.2009)

Chugunoleene registered loss for the last quarter of 2008 Chugunoleene JSC reported a loss of BGN 218 thousand for the fourth quarter of 2008 compared to an income of BGN 105 for the same period in 2007 shows the company's report. For the third quarter of 2008 Chugunoleene made BGN 80 thousand profit compared to losses of BGN 743 thousand and BGN 417 thousand for the first and the second quarter of 2008. For the entire 2008 the loss is BGN 1.3 million . In the fourth quarter of 2008 the annual sales declined by 8.4 percent to BGN 8.96 million. In the whole 2008 the sales increased by 29.6%. The company delayed the publication of the report by more than a month after the deadline was the end of January. "The past 12 months of 2008 can be characterized as negative with respect to the outcome of the operations," says the interim report of the activities. "This negative result is due to the financial and economic crisis covered the branches machinery and metal processing in the European Union, where are the main customers of the company and the reduction of the orders for production. In the fourth quarter of 2008, because of the reduced orders, the average monthly production of iron castings decreased by 383 tons compared to the previous nine months, as particularly strong is the decline in December 2008”, added by the company. 90% of the company's production is for export. For the past 12 months the market capitalization of Chugunoleene JSC has decreased by 86.53 percent to BGN 2.1 million.
Source: investor.bg (11.03.2009)

ANZ: Iron ore contract prices could fall 40pc in 2009 Falling steel prices in China spell "clear warning signs" that may lead to iron ore prices declining as much as 40 per cent in 2009. This is far deeper than market expectations of a 20 per cent to 30 per cent drop, ANZ said in a note. Prices for hot-rolled coil steel in China have slid 15 per cent since the start of February, after picking up on speculation of improving demand triggered by the $924 billion stimulus package announced in November. “China is the key market for iron ore demand accounting for a massive 48 per cent of seaborne supply in 2008. The problem is that China steel prices are still trading at an average 20 per cent premium to international prices, suggesting the high level of domestic steel stocks will unlikely be reduced by increased exports,” said ANZ commodity strategist Mark Pervan. The three dominant iron ore producers – Brazil’s Comphania Vale do Rio Doce , Rio Tinto and BHP Billiton - are currently negotiating with the Asian nation’s steel industry representative, Baosteel Group, to set a new annual benchmark price. (Downjones)
Source: Other (11.03.2009)

Kremikovtzi owes about BGN 2 bln o creditors Debts of steelmaker Kremikovtzi to creditors are about BGN 2 bln, said Dep. Minister of Economy and Energy Nina Radeva. About BGN 11 mln are needed per month for salaries. She said that lay-offs are likely to be necessary, but the 30-salaries demand in compensation is impossible. Most of the steel plant’s debts have been accumulated before the insolvency procedure. They are unpaid debts of Kremikovtzi to the State budget. It includes the state aid, received by the plant and that has to be returned as the Sturdiness Plann has not taken place. Debts include various unpaid liabilities to contracting companies, as well as unpaid salaries for previous periods. The range of Kremikovtzi’s debts is extremely wide and the total is impressive.
Source: Darik Radio (12.03.2009)

Tomov: Over BGN 120 mln has been drawn out of Kremikovtzi Over BGN 120 mln has been drawn out of Kremikovtzi last year by the ex-owner Pramod Mittal and the money is already in Indian banks, said the ex-CEO Alexander Tomov. He said that the Prosecution should investigate Mittal, not him. Minister of Economy and Energy Petar Dimitrov commented that in case Tomov has such information, he should make sure that the Prosecution receivs it. According to the Minister, the steelmaker has been deliberately pushed into bankruptcy as it still keeps on collapsing due to the incompetent management. Mr. Dimitrov added that if Tomov had driven through the EUR 300 mln Sturdiness Plan two years ago, the plant would be prosperous by now. ‘Obviously, someone had interest not to’, the Minister said.
Source: Novinar (12.03.2009)

China's steel industry to consolidate amid global crisis China's steel industry is likely to see more consolidation in 2009 after the financial crisis threw it heavily into the red. General manager of Jinan Iron and Steel Company, Li Changshun, said the industry will speed up structural readjustment to raise quality and eliminate obsolete factories. The China Iron and Steel Association said 62 percent of its 71 large and medium-sized steel producers posted losses totaling 4.26 billion U.S. dollars in 2008. More mergers and acquisitions are expected, with smaller steel companies seeking shelter with stronger market players. Baosteel, China's leading steel maker, announced early this month its plan to join with Hangzhou Iron and Steel Group Company in taking over and restructuring a third firm, Ningbo Iron and Steel Co. Zhang Xiaogang, General manager of Anshan Iron and Steel Company, said mergers and acquistions are the key to helping the steel industry get out of difficulties, and these will also provide new opportunities for the industry. (China View)
Source: Other (12.03.2009)

World stainless output declined for second successive year in 2008 World stainless steel output declined for a second successive year in 2008, figures released on Thursday by the International Stainless Steel Forum (ISSF) indicated. The ISSF, whose members represent almost 75% of world production, estimated that global output decreased by 6,9% to 25,9-million tons when compared with output levels of 2007, which themselves were 2% down on 2006 levels. It noted that 2008 had also mimicked 2007 in delivering a sound first-half, followed by an “extremely depressed” second-half. “By the third quarter, the financial and economic crisis, combined with a massive drop in raw material prices – nickel being no exception – struck massively,” the organisation said in a statement, adding that “in a matter of weeks we moved from a bright future to a gloomy environment”. Production in the fourth quarter slumped 30% to 4,8-million tons, which was the lowest quarterly production figure since the second quarter of 2004. (Engineering News)
Source: Other (13.03.2009)

National Aluminium to Import Coal Next Month to Avoid Disruption in Output National Aluminium Co., India’s biggest alumina maker, plans to import as much as 150,000 metric tons of coal next month to avoid disruptions in production. Nalco, as the company is known, will negotiate with global suppliers, Chairman C.R. Pradhan said. Production at Nalco was affected last year because of a strike by truckers in India and a reduction in supplies from Coal India Ltd., the nation’s biggest producer. Nalco produces 345,000 tons of aluminum and 1.6 million tons of alumina annually. It requires 14,000 tons of coal daily to run a 960-megawatt power plant, Pradhan said. (Bloomberg)
Source: Other (14.03.2009)

The Finance Ministers and the managers of Central Banks of G-20 agreed at their meeting in the UK to significantly increase the resources of the International Monetary Fund. The European countries want to increase the resources of the fund from USD 250 billion to nearly USD 500 billion, while the Americans want an increase to USD 750 billion. Still, there is no consensus on the issue of tax oasises at the meeting. Some rapidly developing economies expressed reserve because of the complexity of the problem. The main obstacle came from China because of its desire to protect the interests of the financial centers Hong Kong and Macao which are not too excited by the perspective for expansion of the cooperation in the financial field.
Source: Darik Radio (14.03.2009)

? The last underground mine in Pernik will be shut down The last underground mine in one of the major mining centers of our country - Pernik will be closed, said its manager Georgi Stoyanchev. Among the reasons for the crisis situation are the stopped supplies to the main user of the coals TPP Bobov Dol. The manager also accounts the strong influence of the world economic crisis. Mine Bela Voda ceased the supply of its production to the termal power plant in November 2008 when because of the reduced electricity consumption in the country, the plant restricted the amount of purchased coals. 160 people will remain without work in June 1, when the underground extraction should be terminated completely. Some of the dissmisals have been already made in two times. The first reduction of 30 persons was done in September and now another 40 employees are being notified. A project for the conservation of the mine is being prepared and about 4 million tons of coal will remain unused. The opencast extraction will continue in limited quantities, explained Stoyanchev. He said that if there are more running steam generators, operating with Bulgarian coals, the production in the other small mines is to be resumed. So far, the mine extracted 10 000 tons of coal per month. Now, there are 21 000 tons of coal in stock.
Source: econ.bg (16.03.2009)

Trade unions draft program to secure Kremikovtsi steel mill workers The trade unions in Kremikovtsi steel mill are drafting a program to secure the workers who could be laid off, Vasil Yanachkov, chairman of Metallurgists trade union, told. They are making a full assessment of the personnel and opportunities for re-training, he added. He said that the first informal replies of the state said it was impossible to provide compensation of 30 monthly salaries to the redundant workers. Some 1,500 workers face layoffs, which will start at the end of April and will finish by the end of June. "We understand that such a deal could not lead to instant payment, but the situation is different, when there is a commitment in time," he said. The expectations are the program to be ready by the end of the week. There is still some hope for the Brazilian company CSN, hopefully in the coming days we will learn more about other negotiations that lead to alternatives, he said. According to him, these alternatives may include new companies or preparing health plan by the management of "Kremikovtzi" to find support from partners. "It is not excluded the bondholders or the state in any form," he said. On a question, if any protest actions are expected this week, he said that this is not excluded if the situation escalates or the management refuses dialogue.
Source: Agency Focus (16.03.2009)

The annual inflation in the Eurozone rose to 1.2 percent in February companred to 1.1 percent in January, Eurostat said. A year ago the annual inflation in February was 3.3 percent. In February the inflation in the Eurozone was 0.4 percent, the official data show. In the whole EU the annual inflation in February was 1.7 percent, which is a decrease compared to 1.8 percent in January. An year earlier in February, the inflation in the EU-27 was 3.5 percent. The monthly inflation in February in the EU like in the Eurozone was 0.4 percent. Among the EU member states with the lowest annual inflation in February were Ireland and Portugal with 0.1 percent, and the highest in Latvia 9.4%, Lithuania 8.5% and Romania 6.9%. Bulgaria was fourth with an annual inflation rate in February of 5.4 percent. Compared to January, the inflation fell in 11 EU countries, remained stable in two and increased in 13.
Source: Darik Radio (17.03.2009)

Alcoa slashes dividend in cost-cutting move Aluminum producer Alcoa announced a slew of cost-cutting strategies Monday, including slashing its quarterly common stock dividend by 82%. The actions will reduce costs by more than USD 2.4 billion annually, reduce capital spending by an additional USD 1 billion in 2010, and improve working capital by USD 800 million in 2009, the company said. "By taking quick and decisive actions, Alcoa has been able to stay ahead of the evolving economic crisis," said Klaus Kleinfeld, Alcoa CEO, in a written statement. "Today's actions better prepare Alcoa to manage through a prolonged downturn and position the company for the future." The move to reduce the quarterly common stock dividend to 3 cents a share from 17 cents will save the Dow component more than USD 400 million per year. (CNN)
Source: Other (18.03.2009)

Unions: Extracting Industry hit the most by the crisis Extracting Industry in Bulgaria suffers the most by the crisis, said head of Independent Minors Association at CITUB Pencho Tokmakchiev. The Industry registered output worth BGN 2.5 bln last year. The production include 28 mln tons of coal, 472 thous tons of copper concentrate, 21 thous tons zinc concentrate, 19 thous tons lead concentrate, 270 thous tons fireproof materials. Metals prices fell 3-fold, Tokmakchiev said. As a result of the slump in Construction sector, orders for extraction materials have fallen 13 times. Coalmining was hit by the crisis as well. The union insists for more funds under the 44th decree of the Council of Ministers, concerning surcharges for the employees in case of cut work shifts. Vice President of CITUB, Valentin Nikiforov, said that this would help protect the employees.
Source: investor.bg (19.03.2009)

China fastener export may suffer AD duties by Russia Russian enterprises were pushing their government to impose anti dumping duties on Chinese fastener. Mr Xu Deren executive vice chairman of Haiyan Fastener Industral Institute of China said that "Following EU's stiff anti-dumping duties on Chinese fastener, Russia's MMK and JIS Severstal also ask their government for guarantee measures investigation on Chinese resource. It will further impact China's gloomy fastener export if Russia approves such proposal." Fortunately, MMK is likely to abandon its accusation at present, which is good news to Chinese fastener enterprises. Mr Zhang Feng said "Export value of fastener in Jiaxing city has witnessed a sharp drop this year. The value in Jan only totaled at USD 47.38 million down by 32.4%YoY that for February went at USD 23.78 million down by 49.5%, export value to EU tumbled by 66.1%." (Shanghai Securities News)
Source: Other (19.03.2009)

ArcelorMittal to idle operations at two Russian coal mines ArcelorMittal, the world's largest steel producer, is considering halting operations at two of its three Russian coal mines bought last year from competitor OAO Severstal until market conditions improve. This, however, would be done if the company's proposed comprehensive programme of cost saving and restructuring of the workforce at Anzherskaya and Pervomayskaya mines does not result in sustainable operations of the mines, ArcelorMittal spokesperson said in an emailed company statement. In Kuzbass territory of Russia, ArcelorMittal owns three mines - Berezovskaya, Pervomayskaya and Anzherskaya - besides the Severnaya washery. It had acquired the mines and associated assets for USD 720 million last year. At present, there are 5,830 employees working in these enterprises. Facing the heat of the global economic slowdown that has led to challenging and unpredictable market conditions, the steel major said it would go for restructuring of the workforce at its Russian mines, which produced 2.7 million tonnes of coal and 1.3 million tonnes of coal concentrate in 2008. (Economic Times)
Source: Other (20.03.2009)

Companies save up to BGN 2 thous with frauds Troubled from the crisis companies try to cheat the state. Employers from all over the country rewrite contracts of their employees to receive monthly assistance of BGN 120, money given by the Government to troubled from the global financial crisis companies so that they do not reduce the staff. Almost 19 000 employees already benefit from the measure, they work part-time and receive a bonus. The amount is paid by the state for three months, as money is transferred directly to the bank accounts of the workers. In Sofia, however, companies that have applied for the aid are the least. Unlike the capital, candidates in the province overflow labor offices. Three employees fight for an aid of BGN 120 in Pernik. Five companies have filed applications of their employees for monetary compensation. Over 400 applications are only from Radomir Metal Industries at a total quota for the region of 263 people. Four companies are in procedures of mass lay-off.
Source: Standart (23.03.2009)

Chinese stockpiling spurs copper price rally Copper stockpiling by a secretive Chinese state organisation has helped trigger an impressive rally of 28 per cent in the price of the metal this year. Copper’s fortunes are closely tied to the industrial cycle so the price jump, bigger than that of gold, has grabbed attention outside the commodities market, with some questioning whether it could signal a turning point for economic growth. However, developments in China, which accounted for almost a third of global copper consumption last year, remain central to the market’s prospects. Industry reports point to buying by the Beijing’s State Reserves Bureau, which manages the country’s strategic stockpiles. SRB’s decisions are shrouded in secrecy, making it virtually impossible to assess accurately how much the Chinese government has bought. Traders estimate that the SRB is in the process of securing 300,000 tonnes and speculate that it could buy up to 1.2m tonnes this year. Global copper production last year stood at 18m tonnes. (FT)
Source: Other (23.03.2009)

Kremikovtzi employees to held protest after April 1 Kremikovtzi steel mill employees are ready to held protest after April 1. This is what chairman of Trade Union organization Metalursi Lubomir Pavlov told. Trade Unions have no information about the course of the negotiations with Brazilian CSN, which is interested to invest in Kremikovtzi steel mill. Trade Unions had received an official letter form the syndic of the steel mill Tsvetan Bankov 1500 employees will be dismissed if steel mill remains without operator until April 25. Criteria on which the employees will be dismissed have to be made by the operative management of the factory. Dismissed employees must be compensated, Pavlov said. In reference to this Trade Unions in the sell mill asked Social Minister Emilia Maslarova to take personal engagements on workers’ social demands. Trade Unions had presented 12 points with proposals. Compensation of dismissed worker is with great importance. They insist on dismissed worker to be re-qualified. “We also deposed the proposal people who are close to pension to retire so to receive percentage of their pensions and to get the whole amount of it after they are at retirement age. All of this is a matter of talks. We have to see how our proposal will be accepted. The social program that we prose has to be implemented only for Kremikovtzi due to the hard conditions in which employees are. We cannot fit in a joint program of Ministry of Social Affairs,” Pavlov said. BGN 60-70 million will be needed for the demanded compensations of the dismissed people. 30 gross work salaries should be ensured, said Pavlov. The compensations should be paid by the future owner, which will take the control over Kremikovtzi soon.
Source: Agency Focus (23.03.2009)

Deripaska May Lose Rusal Control Oleg Deripaska, the billionaire aluminum magnate who was once Russia’s richest man, may lose control of his United Co. Rusal as it buckles under $14 billion of debt and plunging metal prices. Lenders will meet this week to consider consolidating loans and swapping them for equity, said a banker familiar with the situation who declined to be identified because the talks are private. Rusal said it isn’t considering a swap. The company has until early May to renegotiate $7.4 billion owed to more than 70 foreign banks including ABN Amro Holding NV, Citigroup Inc., BNP Paribas SA and Merrill Lynch & Co. “At this stage, Deripaska’s stake is likely to fall below 50 percent,” said Michael Kavanagh, an analyst with UralSib Financial Corp. in Moscow. “Unless there are signs of an aluminum recovery, I can’t see how Rusal can be saved without using equity.” Deripaska, 41, has lost 88 percent of his fortune in the past year, according to Forbes magazine, as Russian stock prices collapsed and the price of aluminum fell to a seven-year low. Russia’s government won’t step in to help pay the debt of its largest aluminum producer, First Deputy Prime Minister Igor Shuvalov said last week. (Bloomberg)
Source: Other (23.03.2009)

1500 Kremikovtzi workers to be laid-off until April 25 Labor unions have received official letters from the assignee in bankruptcy of Kremikovtzi, Tsvetan Bankov, that in case the steel mill does not have an operator until April 25, 1500 workers would be laid-off. The criteria for the job cuts have to be prepared by the operative management and the laid-off workers must be compensated, said Lyudmil Pavlov, head of Metalitzi union. As for the moment, the labor unions have no information on the development of the talks with Brazilian giant CSN.
Source: Monitor (24.03.2009)

Finns come for Kremikovtzi A company specialized in real estate deals is interested in Kremikovtzi. Finland-based Finprominvest sent a letter of intention to work with the plant and eventually take it over. However, as for the moment, the Finns have not revealed any specific details on their intentions for the steel mill. They were invited for talks in the Ministry of Economy and Energy several weeks ago. A meeting is expected to take place within a few weeks as Finprominvest has already appointed their representative for bulgaria – Mr. Karaliyski. The Finnish company has nothing to do with the Russian metallurgical company Prominvest, which was also interested in Kremikovtzi.
Source: Standart (24.03.2009)

Bulgaria's First Carmaker to Be Set Up in Sliven Bulgarian and Foreign businessmen are discussing the possibilities of setting up a carmaker in the town of Sliven. They are expecting the available hangars in Sliven's industrial area that may house the necessary machinery. "At this stage I cannot announce the investor's name, but Bulgarian experts are also involved in the project," Prof. Stanimir Karapetkov said yesterday. As head of the project "An automobile made in Bulgaria", Mr. Karapetkov has had several meetings with businessmen. Since the end of the project two years ago and the official presentation of the first three prototypes of the Universe make we have received many inquiries, but no investments have been made so far. Prof. Karapetkov says the design of the Universe cars should be upgraded so as to match the latest tendencies on the market. Sliven seems to be the perfect place for setting up a car making business - the three machine-building factories in the town offer perfect conditions for such a process and the engineering potential has also been preserved. Daimler-Chrysler, chief sponsor to the project "An automobile made in Bulgaria", are ready to support the production process with know-how.
Source: Standart (25.03.2009)

Iron ore pricing delayed Negotiations on the annual benchmark prices for iron ore imports are not likely to conclude before April 1, when a new annual agreement usually comes into effect, according to analysts. Ma Tao, analyst, Bohai Securities said talks between miners and Chinese steelmakers might drag on for a longer time than last year as negotiations are more complicated this year. Last year the agreement was inked in June with steel makers accepting a record increase of 96.5 percent. "Neither side is in a hurry. Suppliers are waiting for demand to recover in the second quarter, while the Chinese side is seeking lower prices," he said. As the world's largest iron ore consumer China expects to have a bigger say in its negotiations with the three major suppliers, Rio Tinto, BHP and Vale, amid the global economic downturn. Baosteel, which is leading the negotiations, is asking for an over 40 percent cut in iron ore prices this year, which will be the first drop in seven years. Some analysts have even forecast a decline of up to 50 percent. (China Daily)
Source: Other (25.03.2009)

Australia antitrust body clears Rio-Chinalco deal Australia's competition watchdog cleared Rio Tinto Ltd's $19.5 billion tie-up with China's state-owned Chinalco, clearing one obstacle to a deal that still needs the approval of the finance minister. Australia's Treasurer Wayne Swan has the final decision and will base that on the national interest after he receives a recommendation from the Foreign Investment Review Board, which has extended its review of the deal by 90 days to late June. Under the deal, designed to help the mining group cut its $39 billion debt burden, China's top aluminum firm will pay $12.3 billion for stakes in Rio's iron ore, copper and aluminum assets and $7.2 billion for convertible notes that would double its equity stake in Rio to 18 percent. The Australian Competition and Consumer Commission rejected local politicians' argument that Rio might push down global iron ore prices in a move to favor Chinese steel mills, but which would hurt Australia. "ACCC concluded that Chinalco and Rio Tinto would be unlikely to have the ability to unilaterally decrease global iron ore prices below competitive levels," the commission said.
Source: econ.bg (26.03.2009)

Deripaska's Factory in Montenegro About to Go Bankrupt Russian oligarch Oleg Deripaska is about to shut down his aluminum plant in Montenegro. KAR is the largest exporter of aluminum in the country with a forty percent market share. It also provides job positions for 10,000 people. Two thousand workers gathered to protest against the plant’s possible shutdown. They insist on government guarantees that the plant would be saved. However, KAR’s accounts in foreign banks have already been blocked and Montenegro’s national energy company threatens to confiscate its output because of accumulated debts. Montenegro’s government offered a 20-million-euro loan to Deripaska in an attempt to save the plant, but he turned it down.
Source: Standart (27.03.2009)

BHP Billiton loses 400 jobs The world's biggest miner, BHP Billiton, said Thursday it would cut 400 Australian contract jobs as rival Rio Tinto shut down an iron ore smelter, in response to weakening global commodities demand. Confirming that 400 contract jobs would be lost in Queensland state, a spokeswoman said BHP believed metallurgical coal output for 2009 would be approximately 10-15 percent below capacity. "We adjust our contract requirements to suit the level of activity of our business," Samantha Evans said. BHP announced in January it would cut about 6,000 jobs worldwide in response to the global economic downturn, saying it expected to lose contractors as conditions deteriorated. The mining union said the cuts were a concern. "We don't know whether this means some of the planned expansions are not going ahead, or if they are mining to a lesser extent," said Steve Pierce, of the Construction, Forestry, Mining and Energy Union. (AFP)
Source: Other (27.03.2009)

200 workers of Gorubso-Madan into part-time workdays About 200 workers of Gorubso-Madan JSC will shift into part-time workdays, said CEO Valentin Gadzhev. He added that they are mainly assistence personnel and administrative employees. 83 people from the minning company in Madan and 130 workers from the processing facility in Rudozem would be concerned. The company has applied for the BGN 120 per worker, provided by the Ministry of Labor and Social Works in case of 4-hour workday. Gadzhev said that this would show whether the Government would really fulfill its engagement towards the people, who would remain without a job.
Source: Darik Radio (27.03.2009)

Borisov-BSP: Next round. This time for Kremikovtzi Sofia mayor Boyko Borisov has sent a letter to the Minister of labor and social policy Emiliya Maslarova. He insists that the Ministry should appoint a representative for gathering a team for administrative assistance on the planned Kremikovtzi job cuts. The Ministry replied that it has taken urgent measures concerning the workers and employees, hit by the mass lay-offs in the country, which started in the beginning of 2008. The first notification for mass job cuts was applied on December 29, 2008, for 400 Kremikovtzi workers. Thanks to the regional departments of the National Employment Agency, 180 people have been assigned on the primary labor market so far.
Source: econ.bg (30.03.2009)

2009 will be make or break year for Lakshmi Mittal With the steel industry shrouded in doom and gloom, Arcelor Mittal chairman Lakshmi Mittal may have to make major adjustments in his steel empire this year, say industry watchers. Arcelor Mittal is the world's largest steel producing company and it has several plants in Western Europe, Eastern Europe, including Poland where it controls 70 percent of steel production, South Africa and Brazil. The ongoing recession has hit London-based Mittal, Britain's richest man and one of its most flamboyant families, in a big way and his assets have plummetted to 17 billion pounds from 65 billion pounds in less than six months. Now the balance-sheet of his company is facing many hurdles including huge debts which are on the rise each and every passing day. According to a report published in Polish Monthly, the net debt is around 19 billion pounds and he has to raise four billion pounds to meet the expenses. At the moment Mittal is putting up a brave face and is trying his best to convince his shareholders that he will manage the difficult times with his managerial skills. He is relying on a pick-up in prices to boost operating profits. (Economic Times)
Source: Other (30.03.2009)

Companies save BGN 824 thous per day from gas Starting April 1, Bulgarian companies operating on natural gas will spend about BGN 824 thous less per day for the fuel. This follows the yesterday’s decision of State Commission for Energy and Water Regulation to decrease the price of the natural gas for the second quarter by 11.18 per cent. Thus, 1000 cub.m. of the blue fuel would cost BGN 545.97 in stead of the current BGN 614.66, VAT not included. As the daily consumption in Bulgaria is 12 mln cub.m., in stead of the current BGN 7.375 mln the companies would pay a little over BGN 6.55 mln per day. However, the business is not satisfied with the reduction. According to Anton Petrov, head of Stomana Industry S.A., the reduction does not correspond to the expectations of the business, which thinks the natural gas should drop down by at least 15 per cent. Business thinks that once again there was not much transparency in the price setting. “It was not clear neither why Bulgargaz insisted on a 10.5 per cent decrease, nor why SCEWR decided on 11.18 per cent’, Mr. Petrov said. In his opinion, the price of petrol and alternative fuels in the last 9 months is taken into account in the price setting, in other word, there is a delay in the price reduction but in case of a crisis the State should take 2-3 times more serious measures in order to ease the business. The price drop in neighboring countries should also be taken into account. If the decrease there is 20-30 per cent it means that there is even an increase as the Bulgarian industry becomes even more non-competitive as compared to the one in the neighbors, Mr. Petrov explained.
Source: Standart (31.03.2009)

CSN interested in a Kremikovtzi plant Brazilian giant CSN has declared interest in signing a trade contract for exploitation of the coke-chemical plant of Kremikovtzi, said Lyubomir Pavlov, head of the Metallitzi federation at Porkrepa union. The contract is for coal processing as the company would pay the for the processing itself. Meanwhile, the talks for the acquisition of all assets of the steel mill will continue. There is no information yet whether the Brazilian group would take over Kremikovtzi, pavlov added. Workers of the plant would start daily strikes as of April 1.
Source: Monitor (31.03.2009)

OTzK reports BGN 12.14 mln sales income in February Lead and Zinc Complex JSC (OTzK) – Kurdzhali reported BGN 12.14 mln of sales income in February 2009. Earnings before Interest, Taxes, Depreciation, and Amortization for the month is BGN 1.333 mln. The company reported a drop in production and unfinished output stocks of BGN 3.589 mln, accounted as costs in the income statement. The realized account profit in February is BGN 581 thous. OTzK reports sales income of BGN 19.919 mln, EBITDA of BGN 2.631 mln and BGN 1.028 mln account loss for the period Jan-Feb 2009. The sold zinc is 5,568 tons, the lead – 4,017 tons. OTzK reports its monthly results for the second time. The company reported a net loss of BGN 36.5 mln in 2008.
Source: investor.bg (31.03.2009)

Brazil's CSN pulls out of Kremikovtzi deal Brazilian mining and steelmaking giant Cia. Siderurgica Nacional SA (CSN) has no plans to make any acquisitions in the near future, Bloomberg news agency quoted CSN chief executive Otavio Lazcano as saying, ruling out the possible acquisition of Bulgaria's debt-ridden Kremikovtzi steel mill. CSN has been forced to review its expansion plans because of the drop in ore prices, which could drop as much as 30 per cent this year. The company's ore sales fell seven per cent in the fourth quarter of 2008. The Brazilian mining company was seen as the last bidder for Kremikovtzi after Ukrainian steelmaker Smart Holding said on February 25 that it would discontinue talks to take over the Bulgarian steel mill, once the industrial pride of communist Bulgaria. Earlier this month, CSN was on the cusp of sealing a tolling deal to buy coke from Kremikovtzi, agreeing to deliver the necessary raw materials, whose costs would be discounted from the final price. Reports in Bulgarian media said that the mill and the Brazilian firm were locked in stalemate over the coke selling price, however. Kremikovtzi's future looks bleaker than ever, with state-owned natural gas distribution firm Bulgargaz set to cut off all supplies to Kremikovtzi on April 1. Since October 2008, Bulgargaz has only been delivering the bare minimum necessary to keep some of Kremikovtzi's production facilities operational, with the coke ovens being the most important ones. The stell mill has had to shut down its blast furnaces after Ukraine's Vorskla Steel, owned by billionaire Konstantin Zhevago, ended its own tolling deal
Source: econ.bg (01.04.2009)

Former Kremikovtsi Steelworks CEO and PFC CSKA President Alexander Tomov may soon say goodbye to all of his possessions; their total worth is 830,000 levs (1 euro = 1.95 levs). The Commission for Establishing of Property Acquired through Criminal Activity has arrested all bank accounts in Tomov’s name and issued an attachment order for his property, including his deluxe villa in the village of Studena, Pernik region, and his 153-sqm apartment in Sofia. The Commission has also arrested Tomov’s assets in International Metal Forwarding Ltd., owned and operated by himself; his 270 shares in Bulinvest Group and a total of nine Bulgarian bank accounts in Tomov’s name. Up to now, the Commission has established that Tomov’s spendings exceed his income by 4942 minimum wages. “I am innocent. I’ve acquired everything absolutely legally. This is a politically motivated conspiracy against me. I fear for my life,” Tomov announced.
Source: Standart (01.04.2009)

We sell only as last option Tsvetan Bankov, assigneee in bankruptcy -Mr. Bankov, will Kremikovtzi be if the gas supply is shut down? -After the gas supply is shut down, only the coking fascility cannot be restarted. First blast furnace will also be able to process metal with imported coke. -Who is going to operate after the backing down of the Brazilians? -They have not yet declared that they back down. Monday we even made talks with them until 8:30 p.m. They should make a decision any moment. We have discussed alternative options and we have even informed the owner, Pramod Mittal, not only the Ministry of Economy and the bondholders, as biggest creditors. We have to work for the preservation of the steel mill. In recent months only the State made something for it. However, it cannot take all the responsibilities by itself, the rest of the creditors have to participate in the process as well. -Is the interest of the Finnish Finprominvest confirmed? -Right after their letter of interest I wrote them back in February. I also had a telephone conversation with their representative Karaliyski. However, they have not yet showed. -Will the assets and properties of the steel plant be sold out? -No sale is on the schedule. This is to be decided by the creditors, there is still a chance to develop a recovery plan and to implement a sturdiness programme.
Source: Standart (01.04.2009)

We are ready to provide funds Georgi Prohovski, representative of the bondholders -Mr. Prohovski, what is to happen with Kremikovtzi after the backing down of the Brazilians and the termiantion of the gas supply? -We need time to think it over. We expected the decision of CSN until late last night. We feel the situation smells like a back down because they were setting more and more unacceptable condition. We need at least a little more time to develop a back-up plan. -There was enough time, after all the negotiations took months. -We need at least a month for finding a back-up option as its implementation does not depend on only one party. Theoretically we worked on alternative options, but not in practice. -Which are the alternatives? -I cannot give details until a final decision is made. -Does it include a financial engagement by the bondholders? -Yes. -Is there an option for sale of the assets of the steel plant piece by piece? -Not us, the legislation allows it, if the recovery plan is not terminated. In that case we would have to start liquidation procedures. But this is not an good option for anybody, for the State - at least.
Source: Standart (01.04.2009)

Chinese metallurgists brought to Kremikovtzi Kremikovtzi bondholders are thinking over the option for bringing Chinese investors to the plant. The matter concerns a state-owned steelmaker, which is considered possibly intersted,but the talks are in its start. Bulgarian Government and the assignee in bankruptcy have not given up the recovery plan yet as well. However noone discloses the alternative options for the time being. Deputy Minister of Economy Nina Radeva has applied a proposal to the Minister Petar Dimitrov. ‘I cannot announce it until it is accepted’, she said. According to people involved in the matter, the options is for the steel plant to operate by itself as the production operations are preserved at minimum and increase them step by step.
Source: Standart (01.04.2009)

Steel mill Kremikovtzi on the verge of shutdown The Bulgarian state is searching for an alternative to rescue its ailing steel maker Kremikovtzi after Brazilian mining and metallurgical giant CSN did not sign a trade agreement, the economic ministry said. Stressing there has not been any official announcement that the Brazilian company has scrapped investment plans, the ministry gave it an ultimatum to accept a partnership by the end of Tuesday or else gas flows to the steelmaker will dry up. The management of the insolvent plant said they have sent the Brazilian investor a new contract accepting all the terms and conditions proposed. Kremikovtzi agreed to sell coke at an unfavourable price with a view to saving the coke production capacities, one of the company’s directors said. The draft contract was sent on Friday and discussed by the two parties later that day in a conference call and then again on Monday evening, but CSN “were beating around the bush”, he added. The Bulgarian steel mill pinned its hopes on the trade agreement to pump cash until a rescue plan is adopted and reduce its mounting losses as it continues to gorge on gas without producing. Bloomberg reported yesterday that CSN has abandoned its intentions to acquire Kremikovtzi, citing the company’s chief financial officer Otavio Lazcano, who did not specify whether this is a final decision. The Bulgarian energy and economy ministry has repeatedly said gas is being pumped into the mill only to keep the production capacities going until the new owner steps in. The ministry is determined to stop gas supplies in case of a withdrawal. Minister Petar Dimitrov said yesterday gas deliveries to the Bulgarian steelmaker have been rationed down and will come to an end today at the decision of the energy watchdog SEWRC. Chairman Konstantin Shushulov said last year’s audit found that some companies do not pay the supplier and it is not clear how it will collect its dues. Sources close to the matter suggested that could be only a bluff to spur the Brazilian company to action.
Source: Dnevnik (01.04.2009)

Vietnam to increase import tax to protect steel industry Vietnamese ministry of finance has issued an official letter to increase the rates by 3% to reach 8% by April 1st 2009. Pig iron and construction steel tariffs will rise by 15%. Rolled steel products will rise by 1% to hit 8%. The tariff increases follow a big decline in Vietnam's steel sales to about 698,000 tonnes in the first quarter of this year, 30% lower than in the same period last year. Mr Nguyen Tien Nghi VC of Vietnam Steel Association said that the decline was due to lower demand due to the global economic crisis and less consumption of steel on the domestic market, partly caused by cheap imports. Most of Vietnam's imported steel product comes from China, the Republic of Korea, Russia and ASEAN countries. The imports from ASEAN and China have been selling at cheaper prices than the domestic products because of zero preferential import tax rate. Even though it costs more, customers are choosing Korea and Russian imports due to their high quality. (vietnamnews.com)
Source: Other (01.04.2009)

Viohalco has 2008 loss on lower metals prices Viohalco, Greece's biggest metals processing group, booked its first annual loss since at least 1995 as the global economic crisis slashed metal prices. The company, which is active in the steel, aluminium and copper business, had a net loss of 11.3 million euros in 2008 from a profit of 83.9 million euros the previous year. Viohalco reduced the valuation of its metal stocks by 157.2 million euros, the statement said. Sales rose 2 percent to 3.76 billion euros. Viohalco, listed in Athens since 1947, has production facilities in Greece, Bulgaria, Romania, Macedonia and Britain.
Source: Reuters (01.04.2009)

OTzK expects BGN 98 mln sales income in 2009 In case the planned production and sale of metals and concomitant products are realized, we expect sales income of BGN 98 mln in 2009, says the operations report of Lead and Zinc Complex JSC (OTzK). A year earlier the company reported net sales income of BGN 157 mln and in 2006 – BGN 245 mln. In the end of 2008, OTzK has 803 workers as 670 of them are production personnel, 105 are in the management and 28 – assistant personnel. About 9 percent of all employed at the company have bachelor’s degree.
Source: profit.bg (02.04.2009)

Bulgargaz Delays Bulgarian Kremikovtzi Gas Cut Bulgarian state-owned gas monopoly Bulgargaz will not cut troubled steel mill Kremikovtzi's gas supply for another week, it emerged. The announcement was made by Bulgargaz CEO, Dimitar Gogov, after being asked by Economic Minister, Petar Dimitrov, to postpone the gas shut down. Dimitrov explained that one of the probable investors had asked for more time to take its final decision for buying the steel mill. Gogov said he could not provide the company's name. Bulgargaz intended to cut the gas supply to Kremikovtzi after it came clear that the only left negotiating investor, the Brazilian CSN officially withdrew its interest in buying the steel factory.
Source: Darik Radio (02.04.2009)

Kremikovtzi Wastes Natural Gas for BGN 236,000 a Day The debts of Kremikovtzi to the state-owned companies Bulgargaz, BDZ and NEC have reached BGN 300 million and they are growing every day. Keeping the plant alive is like flogging a long dead horse, economists say. If we finally let it die, the money of the Bulgarian taxpayers will stop sinking in the black hole called Kremikovtzi. Kremikovtzi’s debts amount to at least BGN 2.2 billion, the creditors say. The plant’s debts to the bondholders amount to EUR 325 million, plus the money that Kremikovtzi owes its suppliers, workers and the National Social Security Institute. Recent calculations show that natural gas for 235,857 burns every day in the furnaces of the dying plant. Kremikovtzi’s debts to Bulgargaz have grossed BGN 100 million. Economy and Energy Minister Petar Dimitrov said that the supply of natural gas to Kremikovtzi would be cut off with a decision of the State Energy and Water regulatory commission. In addition, Kremikovtzi owes the National Electric Company BGN 140 million and its debt to the state railway carrier BDZ amount to over BGN 21 million.
Source: Standart (02.04.2009)

Bulgaria’s metal industry shrinks 30% for a quarter The production of ferrous and non-ferrous metals in Bulgaria has slumped by around 20-30% since the start of the year from the same period of 2007, said Politimi Paunova, executive director of the industry association. The slowdown was triggered by ebbing orders in the midst of the global economic downturn and thinner gas supplies at the beginning of the year. Promet Steel and Helios Metalurg in the southern city of Plovdiv halted operations altogether during the gas war between Russia and Ukraine, while supplies to Pernik-based Stomana Industry were reduced to only a trickle. Preliminary figures of the Bulgarian Association of the Metallurgical Industry revealed that cast iron output fell almost threefold to 440,300 tonnes. “With Kremikovtzi Bulgaria’s sole cast iron producer, this should not be a surprise, and things are expected to grow worse this year,” said Paunova. Pipes manufacturer Interpipe, part of Intertrust Holding, has suspended operations at the moment. Precis Inter Holding, the Rousse-based producer of electric-welded steel and aluminum pipes and tubes, has also slashed output. “The companies’ future in the first half of the year remains unclear,” commented Anton Petrov, board chairman of the association. He said the global market is experiencing a 40% glut and the tight race for orders is a normal thing. Low metal prices compound the woes of the industry. “A real positive development could be expected in the fourth quarter at the earliest,” Petrov predicted. In a few signs that the clouds could be lifting, metal prices have started to inch up and stockpiles are falling. But both processes are slow, and a recovery could be expected in two years, according to Petrov. One firm to power ahead in the face of the downturn is the Pirdop-based copper smelter Cumerio Med, which on Wednesday renamed Aurubis Bulgaria.
Source: Dnevnik (02.04.2009)

Kremikovtzi sweep away BDZ and ports Kremikovtzi bankruptcy drags to the bottom companies of extreme importance to the Bulgarian economy like BDZ and the ports Lom and Bourgas. The steelmaker generated 4.7 – 5 mln tons of cargo annually, which represented about 25 percent of the total transported by BDZ cargo. Company trains crossed the country each day, loaded with raw materials and output. Kremikovtzi had to secure about 20 percent of BDZ’s income. Had to, but as it did not pay regularly its debts varied between BGN 12 mln and BGN 27 mln. As of the moment the debts are considered to be about BGN 20 mln. Kremikovtzi bit off about one third of the cargo at Port Bourgas and almost the half at Port Lom.
Source: Standart (02.04.2009)

Canadian steel makers call for support The Canadian Steel Producers Association, in meetings this week in Ottawa, will outline its key policy priorities to keep Canada's steel industry strong and positioned for future investment. CSPA said that “The immediate priority for steel producers is rapid action to rebuild demand for steel across the economic spectrum. Canada's steel industry is tied to the market conditions facing other major sectors, including manufacturing, energy, construction, and natural resources. As a result, steel industry capacity utilization has fallen sharply in the past 6 months, to below 50%, resulting in difficult cutbacks by steel producers.” It added that “The Canadian steel industry has gone through a remarkable transformation in recent years, with leading global steel companies investing over CAD 11 billion in Canada. Bringing not just capital, but also technologies, skills, and business opportunities, these investments strengthen the basis for future success of the steel industry in Canada.” (Steel Guru)
Source: Other (02.04.2009)

We sell 50 mln tons of noxious emissions annually The surplus of noxious emissions of Bulgaria would be 40-50 mln tons each year, said the deputy chair of Bulgarian Industrial Association - Dimitar Brankov. In order to trade the surplus with profit we have to sign international agreements with the countries having problems with the quotas this year. Currently the carbon dioxide is traded at EUR 11-12 per ton but its price would surge to EUR 39 per ton until 2020, experts estimated. Business is on the opinion that the revenue from the trade with quotas have to go for modernization of the production installations. The Energy Development Strategy until 2020, created by experts of the branch chamber, is currently inspected at the Ministry of Environment and Water and will be accepted by the Government within a month or two.
Source: Standart (03.04.2009)

Boyko will engage 150 Kremikovtzi workers At least 150 workers of Kremikovtzi that would be laid-off will be appointed in the future waste treatment plantm said Sofia mayor Boyko Borisov during the turning of the first sod in Gorni Lozen. He has already discussed the offer with the assignee in bankruptcy of Kremikovtzi. The facility would be ready in 2011 and would be worth EUR 183 mln.
Source: 24 chasa (06.04.2009)

Brazilian CSN Confirms Pull-out from Bulgaria Ailing Steel Mill Deal Brazilian CSN, the only potential bidder for Bulgaria's insolvent Kremikovtzi steel mill, has confirmed it is no longer interested. "We have no intention to buy assets abroad, namely the Bulgarian steel mill Kremikovtzi. It is very likely that this year we are not going to make any acquisitions," the financial director of the company Otavio Lassano said. At the beginning of last week Bulgaria's Economy Minister Petar Dimitrov set a seven-day deadline for reaching a deal with the Brazilian giant. That was the only reason why state gas monopoly Bulgargaz decided not to cut gas supplies to Kremikovtzi over unpaid bills. The minister was positive that the Brazilian metallurgy giant, CSN, has agreed to sign a contract for the mill's coking plant. The company itself has repeatedly announced it is not planning to make such investments.
Source: Darik Radio (07.04.2009)

Bulgarian Steel Workers to Turn to Brussels for Help Workers from Bulgaria's Kremikovtzi steel mill protested yet again on Monday over unpaid salaries and the imminent closure of the indebted plant. The protestors accused the government of showing no interest in their fate and pledged to approach the European Commission for help. They announced plans for more aggressive actions and a nationwide rally of the people working in the sector in a bid to protect the mill. "They have not paid us for five months", the workers said. "This is nothing short of a genocide". The protestors demanded that the government help in finding an investor or come up with an alternative scenario in case no investor shows interest. "This situation can't go on like this forever. The mill should see the natural development of any other insolvent plant," Economy Minister Petar Dimitrov fired back.
Source: Banker (07.04.2009)

Bulgarian Kremikovtzi Gas Cut Delayed by Week State gas monopoly Bulgargaz said on Monday it would not cut gas supplies to Kremikovtzi for one more week, the steel mill executive director announced. The distribution firm had warned it would cut off deliveries over unpaid bills, closing the smelter's major production units. Kremikovtzi future looks increasingly gloomy amidst workers' rallies over pay and the pulling out of investors. Executive Director Plamen Stoyanov denied reports that Brazilian CSN, the only potential bidder for Bulgaria's insolvent steel mill, has confirmed it is no longer interested. In his words, gas deliveries will be conditional on the final outcome of the negotiations with the Brazilian giant for a tolling deal to buy coke from Kremikovtzi. "Talks are expected to be wrapped up in a week a week," Stoyanov said.
Source: Pari (07.04.2009)

Kremikovtzi turned to blockades and chains The unlimited strike of the Kremikovtzi metallurgists took a new turn yesterday – they blocked Hemus highway for a while and messed the traffic in downtown Sofia. Kremikovtzi workers protested with chains and stickers on their mouths. The chains were a symbol of their slavery to the government and the stickers – that their opinion does not matter. Today, they would go on a branch strike. Today is also the deadline for the gas supply cut, given last week.
Source: Trud (08.04.2009)

German steel production halved in March German steel production dropped by half in the year to March, the sharpest decline since the country's reunification nearly two decades ago, according to government figures released Tuesday. The country's steelmakers produced 1.28 million tons of pig iron and 2.1 million tons of raw steel last month, the Federal Statistical Office said. Those figures were 50.3 percent and 49.8 percent below March 2008 levels. The statistics agency said it was the sharpest year-on-year decline since German reunification. The formerly communist east's industry shriveled following the 1990 union with West Germany. In February, steel production was down by about a third from a year earlier. Germany, Europe's biggest economy, went into recession in last year's third quarter as the global crisis eroded global demand for its products. The country is the world's leading exporter. (Boston Globe)
Source: Other (08.04.2009)

Alcoa swings to a loss, misses forecast Alcoa Inc. said it swung to a wider-than-expected first-quarter loss, as the aluminum producer blamed the continuing economic downturn and a "historic decline" in metal prices. The Pittsburgh-based company posted a loss of $497 million, or 61 cents per share - its second quarterly loss in a row. Last year Alcoa made a profit of $303 million, or 37 cents per share a year ago. Excluding a loss from discontinued operations, Alcoa lost 59 cents per share, which was more than the 54 cents per share expected by analysts. Revenue fell 41% to $4.15 billion. The company said the sharp drop in revenue was caused by the recessionary effects on its end markets: the automotive, transportation, construction and aerospace industries. Meanwhile, it said metal prices are now about 60% lower than last summer. (CNN)
Source: Other (09.04.2009)

Bulgaria Steel Workers Threaten Civil Unrest The plight of the metal-workers from Bulgaria's troubled steel mill Kremikovtzi remained unchanged Thursday for the seventh day in a row. The workers demand clarity regarding the mill's future, payment of their overdue salaries, which they say they have not received since November, and compensations for over 2 000 of their colleagues, who are to be dismissed by the end of June. The trade unions accused the Cabinet of negligence and threatened Thursday more aggressive actions including a national steel mill industry strike and a tent camp in downtown Sofia. For months already the workers from "Kremikovtzi" demonstrate that they are polite and well-behaved people and citizens of this State, but when the State turns into an evil step-mother, we will change our ways too," Lyudmil Pavlov, leader of the "Podkrepa" trade union at the mill is quoted as saying.
Source: Darik Radio (10.04.2009)

The Government Refused Extraordinary Kremikovtzi Compensations A lay-off wave will hit Kremikovtzi starting April 25 and would take place on stages until the end of July. This was announced by Minister of Labour and Social Policy – Emiliya Maslarova, who explained that the matter has been discussed with the Minister of Economy – Petar Dimitrov. Ms Maslarova made it clear that the metallurgists’ demand for 30-salary compensations are not going to happen. ‘If you are laid-off, would you receive 30 salaries?’, Minister Maslarova asked the journalists. She explained the real options for the compensations. ‘Those, who enter the labor market, would receive above the minimal salary in Bulgaria – BGN 300, for 6 months in case of work experience over 12 years. If 3000 or 5000 people are important for the economy, not less important are those who wish to keep working’, the Minister said.
Source: Sega (10.04.2009)

The State Takes Over Kremikovtzi The State may take over Kremikovtzi as a reserve option. This is discussed by the Government. The Budget may transform a part of the Kremikovtzi debt into ownership and would found a new enterprise to manage the assets of the troubled steel plant. The suggestion has been made by the Deputy Minister of Economy – Nina Radeva, and has been coordinated with the assignee in bankruptcy – Tsvetan Bankov. The proposal was sent a few weeks ago to Minister Petar Dimitrov, who has to further it to the Council of Ministers. A second option is liquidation and sale of the plant’s assets in order to pay the debts to creditors. However, it is the less possible option, according to people close to the matter. Both options are taken seriously as negotiations with Brazilian mining company CSN are on hold for weeks.
Source: Standart (10.04.2009)

People Close to Tomov and Murgina Drew Out Millions of Kremikovtzi A close circle around the ex head of National Revenues Agency – Maria Murgina, and the ex-president of PFC CSKA Sofia and ex-CEO of Kremiovtzi – Alexander Tomov, is under investigation for drawing out millions from the steel plant. According to people familiar with the matter, the steelmaker has not paid taxes for years. The scheme was very complicated as involved a number of offshore companies. The fraud swang out of the blue during an investigation of the National Revenues Agency against Maria Murgina and high officials of the Agency. There has been an investigation for several months due to allegations that Murgina has afforded to tolerate particular companies, which were to receive VAT with higher priority. Murgina is expected to be called at the Prosecutions Office until the end of next week in order to be indicted for a criminal breach of trust.
Source: profit.bg (10.04.2009)

Industry backs steel mills China's steel industry associations will take up cudgels on behalf of producers if the US government launches a probe into whether Chinese mills are dumping steel pipes in the US market. An official, surnamed Chen, with the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters made the comment after seven US steel manufacturers on Wednesday accused Chinese rivals of illegally dumping certain steel products, chiefly pipes, which are used in the extraction oil and gas. Chen said the petition by American steel mills, including behemoth US Steel Corp, will not only affect steel manufacturers but also trading enterprises if the US government were to impose punitive duties on certain Chinese steel products. Officials from the China Iron and Steel Association declined to comment on the issue. (China Daily)
Source: Other (10.04.2009)

Bulgarians want Kremikovtzi Intertrust Holding BG wants to hire assets of Kremikovtzi for one year. This is written in an offer, addressed to the trade union of the metallurgic enterprise and syndicate leaders in Kremikovtzi. The document is spread among the workers on today’s protest in front of the Council of ministers. The candidate wants to receive an exclusive right for the implementation of a health program, viability plan and purchase of assets. If there is no answer the offer which was sent on 7 April within 7 days, it will be considered null. Intertrust holding BG is connected with the name of the former director of Kremikovtzi Valentin Zahariev.
Source: news.bg (10.04.2009)

Global steel industry awaits auto turnaround Steel is on edge and the global industry is cutting back hard, hanging on for either a budget blast from China, new credit for vast Middle Eastern building schemes or resurrection of the US auto industry. Demand has dwindled and steelmakers, notably the giant of them all, ArcelorMittal, are damping down surplus furnace capacity while waiting for credit to flow, construction cranes to turn and factories to roll. A decision by ArcelorMittal last week to pursue temporary production cutbacks, slashing European output by more than half from the end of April according to a union source, dramatises the extraordinary ride and role of steel in the last few years. In just months the global industry has gone from a boom driven largely by China, emerging markets and a property extravaganza in the Middle East to a narrow line between excess capacity and the costs of waiting for recovery. In another report, Morgan Stanley predicted "the current demand shock to lead to excess steel capacity." Consequently, the bank said, steel plants should operate at rates below 75 percent of capacity until 2012. (MSN News)
Source: Other (13.04.2009)

Sumitomo, Bhushan in talks to build steel plant in West Bengal Japan’s Sumitomo Metal Industries Ltd is in talks with India’s Bhushan Steel on building an integrated steel plant together in the West Bengal. Japan’s big steelmakers have been expanding overseas to tap growing demand, although the global economic turmoil has forced world no.2 player Nippon Steel Corp and third-ranked JFE Holdings Inc to delay or review some of these plans. Sumitomo Metal Industries, Japan’s third-biggest steelmaker, will likely invest up to $3 billion in the project, with the aim of starting operations around 2015. Sumitomo Metal played down the possibility of striking such a deal anytime soon. “We are considering various overseas projects including that in India, but it is not true that we are discussing such details and that we have not made any decision,” the company said in a statement. Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management Co, said Japanese steelmakers’ moves into India and China would be positive in the longer term. (Nikkei)
Source: Other (15.04.2009)

ArcelorMittal to Delay $20 Billion India Factory Plan ArcelorMittal, the world’s largest steelmaker, said it will delay a $20 billion plan to build two factories in India because of the global recession and difficulties in securing mines and licenses. Òhe plants, planned with an initial capacity of 6 million metric tons each, will be deferred by at least two years to 2014 and their sizes may be cut, Vijay Kumar Bhatnagar, chief executive officer of the India unit, said today in New Delhi. While the government has allotted plots in the states of Orissa and Jharkhand, land acquisition has yet to be completed, he said. Steelmakers are shelving new projects and reducing production as the global recession slashes sales of cars and homes, weakening international steel demand.
Source: Monitor (16.04.2009)

Nippon Steel, Toyota agree steel price cut Japanese steelmakers led by the world No.2, Nippon Steel Corp, agreed with Toyota Motor Corp to cut steel prices around 10 percent, a source said, a smaller cut than expected that signals steel mills' earnings may not suffer too much. Toyota, facing a global auto sector slump, may however seek a further price cut later this year after steel mills and miners such as BHP Billiton set the price of iron ore, a key raw material, analysts said. "The size of the price reduction is far smaller than expected," Mizuho Securities analyst Hiroshi Matsuda said. "It is hard to understand why Toyota would agree to this price." Amid slumping demand for cars, electronics and industrial machines, Asian steel prices have more than halved to less than $500 a tonne from record highs early last year. Worries that Japanese mills faced sharp cuts in prices for autosheet steel have weighed on their shares.
Source: Reuters (17.04.2009)

POSCO suspends stainless steel export to Asia POSCO has suspended export quotation for May to June 2009 period to China, Taiwan and SE Asia due to the ex work price increase by stainless steelmakers from China and Taiwan as well as their demand hike. In addition, the inventory of stainless steel in South Korea has witnessed an evident jump. However, POSCO is to unveil its export quotation within this month and the offer is said to be lifted by USD 300 to USD 400 per tonne. BNG Steel and Hyundai Steel also follow the suit to temporarily stop export quotation to Asia. (Mysteel.net)
Source: Other (21.04.2009)

Kremikovtzi workers to address the Human rights court in Hague The workers from Kremikovtzi are preparing a collective claim to the Human rights court in the Hague. The claim is for unpaid salaries and the impartiality, which the state and the management team of Kremikovtzi demonstrate to the faith of the company, claimed the leader of KNSB in the enterprise Vassil Yanachkov. Today there is another protest meeting of the Kremikovtzi workers. At their protest last Thursday the workers gave the prime minister Sergei Stanishev a 9-day period for deciding the enterprise’s fate. This is the period to the date when the firing of new 1500 workers will start.
Source: news.bg (22.04.2009)

Pramod Mittal keen to come back to Kremikovtzi Indian tycoon Pramod Mittal is willing to return to Bulgaria’s beleaguered steel maker Kremikovtzi. Sources told Dnevnik that the businessman presented his plans in a letter to prime minister Sergei Stanishev and economy minister Petar Dimitrov. According to the document, the official owner of 71% of the capital in the insolvent mill will put forward a rescue plan which will work to resuscitate the plant’s electric arc furnaces converting scrap into steel as well as the cold and hot rolling mills and the capacities for products with smaller added value. The financial parameters of the proposal have not been defined yet as there is no plan for settling Kremikovtzi’s debts to its creditors. The new offer caused alarm at the plant as it does not involve preserving the production and pollution belching capacities including the chemical coke units and the blast furnaces. All previously considered plans pledged keeping the capacities by investments in treatment facilities. But chances that production capacities should draw any investment interest are pretty slim at a time when steel prices are falling and the credit is scanty. Pramod Mittal will hit further trouble trying to raise debt capital after his reputation was marred by a failure to pay off bonds. Bondholders, which are the mill’s largest private creditor, dismissed the offer as ridiculous.
Source: Dnevnik (22.04.2009)

Uplift in China’s steel demand discounted China’s steel market is likely to remain weak and prices depressed until next year, the country’s biggest steel producer said, in what appeared to be a warning shot to mining companies in the midst of the annual iron ore price negotiations. Wu Dongying, director of Baosteel’s Economics and Management Research Institute, said the Chinese steel industry “will remain in a valley and prices will fluctuate at a low level” in spite of Beijing’s $586bn economic stimulus package, which is expected to boost steel demand in the second half. Mr Wu comment’s, echoed by other industry executives and traders in China, came as global miners Rio Tinto, BHP Billiton and Vale of Brazil negotiate with Baosteel and the China Iron & Steel Association over the annual price of iron ore for the year which started on April 1. Iron ore is the main input into steel. Steel mills are asking for a 40-50 per cent cut in iron ore prices, arguing that steel demand is poor. The miners are resisting the call and delaying the negotiations, gambling that Beijing’s stimulus package will boost steel demand this year. (FT)
Source: Other (22.04.2009)

Appeal Against the State Aid for Kremikovtzi The list of creditors of Kremikovi JSC is about to be announced. Friday the Sofia City Court will consider objections received in respect of the lodged and accepted claims. Their total number is 37. Among them there are objections from creditors against the state aid for the company to the amount of EUR 700 million with interest. "I hope they are regularly called upon so that the case is not postponed", said Tsvetan Bankov, assignee in bankruptcy at Kremikovtzi. He explained this is extremely important, as from now on the insolvency proceedings will go faster. Within one month or in May, the court will have to come up with a determination to approve the submitted claims, which is not subject to appeal. So there would be legitimate creditors and a one month period would start to submit a restructuring plan for the plant. Otherwise bankruptcy would be declared. Bankov pointed out that after the list of claims is approved, a meeting of creditors may be called. According to him the most difficult part of the procedure so far was due to the number of submitted claims. They are about 300 and are for about BGN 2 billion.
Source: Trud (23.04.2009)

World crude steel output in 2009 seen at 10% YoY lower World crude steel production in 2009 is forecast to be approximately 1200 million tonnes, a reduction of almost 10% YoY. All economic forecasts indicate an upturn in 2010. À 5% improvement in steel output in that year is expected. Further growth in steelmaking is forecast for the following three years as the global economy improves. A new record steel production figure is anticipated in 2012, five years after the previous high point. The projection for blast furnace iron production in 2009 is 852 million tonnes, 8.2% below the tonnage recorded in the previous twelve month period. This decline is less than that for steel but pig iron output fell faster than steel in the final few months of 2008. Moreover, the blast furnace mills were quicker to react to the downturn in activity due to the rapid fall in demand for flat products used in the auto and home appliance sectors of the market. (MEPS, Global Iron & Steel Production to 2013)
Source: Other (23.04.2009)

Erdemir lower employee wages by 35 percent Eregli Demir Celik (Erdemir), Turkey's largest steel producer, has recently announced that it plans on reducing its employees' wages by 35 percent. Workers in the plants may take collective action against the move, including a massive strike. According to the proposal, the 35 percent wage cut will last until Aug. 31, 2010. The steel sector has been amongst the hardest hit industries in the ongoing economic crisis as construction levels plummet and steel prices tank. Workers are also protesting newly imposed regulations under which employees who are close to retirement are dismissed, with reduced pensions, and their sons are offered their jobs, but with lower wages. (Today's Zaman)
Source: Other (23.04.2009)

No Gas for Kremikovtsi after St George's Day Kremikovtsi steel mill is likely to cease functioning after St George's Day, that is May 6. After the holidays, May 1-6, Bulgargaz will stop the gas supply to Bulgaria?s largest metalworking company, reported Dimitar Gogov, head of Bulgargaz. "Unless the future of the company is clear by then, we will stop the fuel supply," Gogov told on the Bulgarian National Radio. No more gas supplies means no more processing of coke in the mill. Thus the furnaces in Kremikovtsi will be able to work on imported coke only.Meanwhile the workers in Kremikovtsi announced they would carry on their protests in front of the plant because Sofia downtown is closed for the energy forum.
Source: Standart (24.04.2009)

Gas Supplies for Bulgarian Kremikovtzi Cut in May State gas monopoly Bulgargaz said it will cut gas supplies to Kremikovtzi steel mill after the holidays at the beginning of May. The distribution firm had warned it would cut off deliveries over unpaid bills, closing the smelter's major production units. "We can't continue to maintain the lethargy of the mill. At the beginning of April we were told that the future investor will be known in a week. Nothing happened. This can go on for months, but we are not able to supply gas if nobody pays," Dimitar Gogov, Bulgartgaz Executive Director, told Darik radio. Kremikovtzi future looks increasingly gloomy amidst workers' rallies over pay and the pulling out of investors. At the beginning of April Bulgaria's Economy Minister Petar Dimitrov set a seven-day deadline for reaching a tolling deal to buy coke from Kremikovtzi with the Brazilian giant CSN. That was the only reason why state gas monopoly Bulgargaz decided not to cut gas supplies to Kremikovtzi over unpaid bills. Should gas supplies be cut off, the total shutdown of the company except for the final units in the production chain is very likely.
Source: Darik Radio (24.04.2009)

Vale provisionally gives 20% discount for selling iron ore to China On April 21, one of the three major mining companies Vale issued a statement that the iron ore contract should take the provisional discount to implement in 2009, that is, 80% payment paid in cash and another 20% will be paid at the end of the price negotiation of 2009. It is learned that the mining company has given a discount to sale the long-term contract iron ore to China on spot market, which is the first time that three major mines sold iron ore to China by means of discount. Vale said it will take the benchmark price of 2008 as the provisional price, when the contract implements. Then it will adjust the price according to the results when the benchmark price negotiation of 2009 finished. As is customary, Vale and Asian steel enterprises complete the benchmark price negotiation on April 1 every year, but the negotiation has not had a result at moment. (Chinametalbiz)
Source: Other (27.04.2009)

Brainstorming about Kremikovtzi again A debt-for-equity swap through capital increase under a rehabilitation plan is an alternative option to rescue indebted steel mill Kremikovtzi. This was announced by Economy and Energy Minister Peter Dimitrov in a letter that was read to the workers from Bulgaria's Kremikovtzi steel mill. The letter points out that the State has always been looking for options for the restructuring of Kremikovtzi. This is why it has been actively participating in the negotiations with the potential investors. All state bodies are engaged with the problems of the steel mill, the letter claims, and each one participates according to its field. Options, however, are limited due to the opened insolvency procedure, the letter reads.
Source: Trud (28.04.2009)

Kremikovtzi owes BGN 23 mln to BDZ The debt of Kremikovtzi to BDZ is BGN 23 mln, said CEO of the railway company Hristo Monov. ‘You know the situation, we cannot take the money on the moment’, he said. Minister of Transport Petar Mutafchiev said that a part of the Kremikovtzi wagons for about BGN 10 mln are under distraint. ‘I don’t know the way the debt is going to be paid. I hope that at least a part of it will be paid in wagons’, Mutafchiev added.
Source: econ.bg (28.04.2009)

Bulgaria Kremikovtsi Steel Mill Talks Reach Crisis Point Bulgarian deputy Economy and Energy minister, Nina Radeva, has stated that talks with Brazilian steel giant CSN over the future of Kemikovtsi are in crisis. Radeva said that the latest round of talks with CSN will probably finish unsuccessfully and that it is completely normal for Bulgargaz to stop gas supplies to the troubled plant over unpaid gas bills. She concluded that the future of Kremikovtsi is now wholly in the hands of its creditors and that the state will encourage them to enable work to keep going at the plant for as long as possible. Earlier, state gas monopoly Bulgargaz said it will cut gas supplies to Kremikovtzi steel mill after the holidays at the beginning of May. The distribution firm had warned it would cut off deliveries over unpaid bills, closing the smelter's major production units.
Source: Darik Radio (28.04.2009)

LME fails to grab steel future market in 2008 The world's biggest steelmakers have yet to adopt the London Metal Exchange's year old futures contracts for the alloy, preferring to set prices through negotiations with distributors and consumers. Data from the LME show that steel trades totaled about 1.5 million tonnes, worth more than USD 700 million, since phone and electronic transactions started in February 2008. The amount is equal to 0.1% of the 1.33 billion tonnes of steel made in 2008. The LME handled a record USD 10.24 trillion of contracts in 2008. The London bourse added steel as it expands beyond the main products of copper, aluminum and nickel. The LME added plastics in May 2005 and may start trading molybdenum and cobalt in the first quarter of 2010. Some products were unsuccessful. The exchange reintroduced silver futures in 1999 after a decade-long gap and suspended them again three years later because of a lack of interest. (Bloomberg)
Source: Other (29.04.2009)

OTzK reported profit of BGN 1.232 mln for three months In the first quarter of the year Lead and Zinc Complex JSC – Kurdzhali (OTzK) reported a profit of BGN 1.232 mln. Production reached 5,412 tons of lead and 5,905 tons of zinc, sales income total to BGN 26.711 mln. Production operation costs are BGN 23.889 mln, which leads to an operative profit of BGN 2.822 mln. The figures have been sent to the Financial Supervision Commission. The letter is signed by the CEO of the Kurdzhali-based plant – Slaveya Stoyanova.
Source: Darik Radio (29.04.2009)

Nucor reports first ever loss due to recession Nucor Corporation has reported its first loss ever as a severe recession sapped demand for the metal. It forecast an even bigger loss for the second quarter. Like other steel companies, Nucor has been hit particularly hard by a shrinking economy, which has undermined demand for the metal in major markets such as construction and autos. Nucor's first quarter loss, which was expected, totaled USD 189.6 million. That reversed a profit of USD 409.8 million a year earlier. Nucor said in a statement that "As we have progressed from September 2008 to March 2009, we have seen business and market conditions worsen each succeeding month." Mirroring the broader economy, Nucor expects an even bigger loss in the second quarter. (Associated Press)
Source: Other (30.04.2009)

Zinc production in the first half of 2009 will drop 30 percent Production of zinc in Bulgaria will drop by at least 30 percent in the first half of 2009, according to data of the Bulgarian Association of the Metallurgical Industry (BAMI). Production will drop by 15.3 thous tons of zinc and would total about 38.6 thous tons. Slump of lead production would be significantly weaker – output would be about 45.1 thous tons following the 45.5 thous a year earlier. ‘There are markets for the lead and zinc output, however, we are not satisfied with the prices’, explained Roberto Mladenov, CEO of Intertrust Holding JSC, owner of Lead and Zinc Complex JSC – Kurdzhali. The company trades with big customers and 85 percent of the output is exported. Meanwhile the Plovdiv-based rivals KCM SA (Non-ferrous Metals Smelter) seek new partners to the West. ‘We managed to make a big break-through in Central Europe thanks to the withdrawal of the big local players from the market’, said CEO Nikola Dobrev. KCm has signed contracts for supply of alloys for Germany, France and Belgium.
Source: Dnevnik (07.05.2009)

Canada warns US Steel about temporary shutdown The Canadian government warned United States Steel Corp. that it must live up to its production commitments at the former Stelco Inc. plants in Ontario which it has temporarily shut down. Industry Minister Tony Clement said he sent a letter indicating that the shutdown at plants in Hamilton and Nanticoke, Ontario, may violate commitments the U.S. steel giant made when it bought the Canadian steel producer in 2007. "(U.S. Steel) committed to a series of undertakings regarding, among others, capital expenditures, research and development and production. U.S. Steel has recently cut production and laid off employees at its Canadian operations. While I recognize that these are challenging economic times, we expect the company to live up to its commitments," the minister said in a statement. (The State)
Source: Other (07.05.2009)

Bulgargaz cuts gas feeding to Kremikovtzi on May 12 So far there isn’t another letter from Bulgaria's gas monopoly Bulgargaz and the only information is that gas feeding to Kremikovtzi steel mill would be suspended on May 12 until 2.00pm, assignee in bankruptcy of Kremikovtzi Tsvetan Bankov said. He said that readiness for suspension of natural gas supply to the factory is permanent. “Gas consumption has been reduced since last year. We work with the same gas quantity that we were receiving during the gas crisis”, the assignee said. In his words shifting to the gas suspension plan could be realized with 24 hours.
Source: Darik Radio (08.05.2009)

Kremikovtsi with stabilization plan until end of May After Kremikovtski steel mill’s natural gas supply was suspended on May 12, the only possible outcome is the irreversible loss of the koksochemical factory. The enterprise will resume all other production, its bankruptcy trustee Tsvetan Bankov announced. In the next 2-3 months Kremikovtsi will remain operational, until the eventual approval of a stabilization plan.
Source: Monitor (11.05.2009)

Rio Tinto will terminate the contract if the ore price can not reach an agreement Rio Tinto, one of three giant iron ore manufacturers, said that it will terminate the contract if the iron ore price can not reach an agreement as soon as possible. Shan Shanghua, secretary of CISA pointed out the opposite party is in psychological war and this trick can not be effective, as well as the current iron ore spot price has been lower than the requirements of China. China Iron and Steel Association (CISA) participates and guides the iron ore price negotiation all the time this year, and Australia Rio Tinto is the one of the three negotiators. Last year, Australia also threatened to terminate the contract. At the moment, steel enterprises and mines are on the deadlock about the iron ore price reduction, and a 40% price cut over 2008's is Chinese parties’ attitude, but Rio Tinto does not agree. (MetalBiz)
Source: Other (11.05.2009)

Kremikovtzi is long ago in clinical death Chief architect of Sofia, Peter Dikov, said that what is to happen with Kremikovtzi is to stop an organism that is long ago in clinical death. “If the things we offered two years ago were undertaken, everyone could have won. Now everyone is losing." Sofia municipality, led by architect Peter Dikov, offered Kremikovtzi to be closed, the land to be restored and new infrastructure to be created for environmental friendly productions.
Source: econ.bg (11.05.2009)

‘Prometea’Awards CITUB awarded managers for their contribution to the improvement of the working conditions. On April 29 – the day for rememberance of the perished due to work accidents, five managers of big companies were received the traditional awards of the Confederation of Independent Trade Unions in Bulgaria – “Prometea”. One of the five managers is Dr. Eng. Lachezar Tsotsorkov – CEO of Asarel Medet JSC – Panagyurishte. For more than 12 years the company has not registered disabling labor accidents. The company has one of the lowest levels of trauma accicents in mining, although the average list of personnel exceeds 1300 workers and employees. About BGN 100.465 mln have been invested only in last few years for better working conditions. After a special program for permanent improvement of health and salety, BGN 1.6663 mln have been invested in 2008. Despite the economic downturn, the investments in securing healthy and safe working conditions keep on the high priority in 2009 for Asarel Medet JSC. For this purpose further BGN 735 thous have been provided.
Source: Capital (11.05.2009)

‘Prometea’Awards CITUB awarded managers for their contribution to the improvement of the working conditions. On April 29 – the day for rememberance of the perished due to work accidents, five managers of big companies were received the traditional awards of the Confederation of Independent Trade Unions in Bulgaria – “Prometea”. One of the five managers is Eng. Emil Zhivkov, chief director of Stomana Industry JSC – Pernik. The company program for labor safety improvement and health during work is negotiated with the labor unions and is cover by investments of over BGN 40 mln. Since 2002 the traumas at the company have been decreased 7 times and have practically been reduced to zero. For five years there have not been a single labor accident, which leads to heavy injuries or loss of human life.
Source: Capital (11.05.2009)

Why does Stomana Industry SA operate at 10 percent profit marge and Kremikovtzi is drowning? Stomana Industry SA reported 20 percent growth of revenue in 2008 as sales in 2007 are for BGN 873 mln and profit is at BGN 92 mln. This means a net profit marge 10.6 percent. On the other side Kremikovtzi is shuting down after years of losses. Where is the difference between the two enterprises and why does one of the socialist giants survived and developed, while the other collapsed? This is the moment to point out that the third player in ferrous metallurgy – Promet Bourgas, develops successfully as well, in spite of the fact that it did not operate in the end of socialist regime. Kremikovtzi was the only one to collapse. Is there interest in Kremikovtzi assets? ‘It is difficult to give a single answer as Kremikovtzi structures are merged and therefor the troubles are merged. It is not clear if you acquire the electric furnace for instance, is the electrical distribution line sold to someone else. Or for example the current case as the rail station is sold, it is unacceptable to have someone else to determine when and at what conditions you would transport. It is unclear who is going to undertake the ecological expenses. The case of Stomana Industry was easier, there were only two electrical furnaces and subsequent operations. Despite this the restructuring took almost a year’, said Anton Petrov, CEO of Stomana Industry SA. This comment contains all the answers. First of all, Stomana being smaller, including less debts, was easier to restructure. Stomana’s personnel was less in number and far from Sofia and it is harder for groups of metallurgists to gain access for strikes in front of the Council of Ministers and the National Assembly. NEK and Bulgargaz did not cut Kremikovtzi off and the steelmaker kept on operating in the grey economy for 3 reasons – first not to murder the debtor, second due to the political protection over Kremikovtzi and third – due to the impossibility to collect the money through a court executive, because in Bulgaria the creditor is on its knees in front of the debtor as a result of legislation problems. As Kremikovtzi accounts in Bulgaria were distrained by the creditors, Kremikovtzi was forced to operate through companie at the entrance and the exit and to use foreign bank for management of the means of circulation. This lead to deepening of the problems and to opportunities for drawing out of the company resources. As NEK, Bulgargaz, BDZ and NSSI were waiting for their funds, they became hostages of Kremikovtzi. The whole responsibility for Kremikovtzi lies over the Government and it is in two directions. First because it was sold in a ‘zombie’ state and it could not solve the problems of NEK, Bulgargaz, BDZ and NSSI. And second because the State has not created a mechanism for fulfilment of the obligations to the creditors or for debtors protection. A fresh example is Crysler in the US. Creditors of the auto giant lost the main part of their money and shareholders lost their shares. Translated through the Bulgarian case, NEK, Bulgargaz, BDZ and NSSI would remain empty-handed and would receive couple of dimes but the plant would keep on operting and would profit, like Stomana Industry and Promet, and would be in the light sector of the economy. Kremikovtzi troubles are mainly organizational. Noone denies that there is interest in the electrical furnace of Kremikovtzi, even the ecologists are not against its operation. However, like Mr. Anton Petrov said, it is unclear whether by buying the electrical furnace would you own the distribution line or the rail station to it and would you be able to operate without extortions. The resolution for Kremikovtzi would be partial sale, which would guarantee a certain amount to at least partially cover the debts. Thus the ‘zombie’ Kremikovtzi would be put to an end. We can be sure that at least the electrical furnace and the thermal power plant would remain operational, would pay salaries, insurances and taxes, as well as the rest of the productions if someone purchases them and they are given a chance to start all over. Kremikovtzi cannot survive as a whole as noone can start with billions of debts to hundreds of creditors and to hope to be left to do business at peace. The National Assembly have to adopt proper legislation for debtor protection and creditor protection. The Government has to stop its political protection over Kremikovtzi (until recently the Government paid the salaries to the non-working employees and kept NEK and Bulgargas from shutting down the supplies. The Court has to perform a perfect execution of all the remaining assets of Kremikovtzi so that there is an operational production after the whole procedure. From a macroeconomic point of view, the presence of Stomana, Kremikovtzi and Promet is valuable for Bulgaria as in stead of importing rebar - it is produced here, in stead of exporting scrap – it is processed here. Through using the local resources like labor, water and electricity, metal products are exported, provided for the metal-processing and machine-building industries in Bulgaria, which also export.
Source: investor.bg (11.05.2009)

Kremikovtzi Life Extended by 2 Days The gas supply to Bulgaria's dying "Kremikovtzi" steel mill will be extended with another 48 hours. The information was announced by the Bulgarian Economy Ministry late Monday, despite the fact that the May 12 supply cut was announced before the May holidays. The Ministry informs that the mill's assignee in bankruptcy, Tsvetan Bankov, has requested the extension. The goal of the latest delay is the possibility to keep the plant's coke production running in order to conclude possible negotiations for the coke facility purchase. In case the negotiations fail, the gas supply will be cut by "Bulgargaz" on May 14.
Source: Standart (12.05.2009)

Copper smelter Aurubis to ramp up production capacity German copper producer Aurubis will plough BGN 30 million in an expansion of its copper slag enrichment facility near the central Bulgarian town of Pirdop. The upgrade is part of a strategy to streamline operations by stepping up copper extraction, the company said. Two years ago investments to the tune of EUR 122 million in the Pirdop plant earned the copper producer a first-class investor certificate, a document that fast-tracks the project through administrative bottleneck. Around EUR 67 million of the total was spent on the construction of a new cathode copper refinery, which was inaugurated last year. Aurubis Bulgaria has a capacity to churn out some 180,000 tonnes of cathode copper each year. It has earmarked a total of EUR 34 million for expansion of operations. Until 2008, the company made mostly anode copper, which serves as a raw material for cathode copper production. The Pirdop facility also makes sulphuric acid as a by-product of metals production. The concern said it would stick to its investment strategy despite the ongoing economic downturn. Its Bulgarian unit comprises a metals production capacity, a cathode copper refinery, a sulphuric acid production unit and an enrichment facility. About 90% of the output is shipped abroad.
Source: Dnevnik (13.05.2009)

Creditors save Kremikovtzi The biggest creditors – the State and the bondholders, will take over Kremikovtzi. This was proposed by the bondholders in an address to the Government and the Minister of Economy Petar Dimitrov. An expert group of the bondholders arrives at the plant today and would prepare a statement for the salvation of the steelmaking giant. They would finish their analysis until the end of the month, said Georgi Prohaski, representative of the holders of the emission. Among the representatives are two Americans and two Russians, specialists in metallurgy and finance. They would propose the basics of a revitalization plan, which has to be applied for approval at Court until Jne 20 according to law. The idea is that the State and they capitalize the debts of Kremikovtzi to them and to stabilize it and after that to look for a strategic investor. The letter offers that the gas supply is not cut off before the approval of the revitalization plan. According to calculations of experts, in case of further gas supply until the end of the month, Kremikovtzi would accumulate additional BGN 4-5 mln debt, but it would be paid after the coke chemical mill starts operations. If the fuel is stopped, however, the installation would be lost, with no option for restart.
Source: Standart (13.05.2009)

Minister: We stop the financial aid The Government finds it impossible to keep on the financial injections for Kremikovtzi, said Minister of Economy and Energy Petar Dimitrov. We poured energy, that was not paid for, through NEK and Bulgargas for BGN 10 mln each month in the last year and a half. This has to stop now, said Minister Dimitrov. A lay-off of 1400 workers has started at the plant. If the negotiations for Kremikovtzi do not produce any results, the gas supply would be cut off, he said, before receiving the new proposal by the bondholders.
Source: Standart (13.05.2009)

10,000 jobs may face Corus closure heat Nearly 10,000 jobs are under threat as Tata Steel’s European arm Corus is mulling closing of one of its mills in England after a group of buyers terminated a contract to buy the unit’s 80 per cent produce for 10 years. “Not only did the consortium’s decision spell the end for an estimated 3,000 steel workers in the area, but a further 7,000 jobs in the supply train are also threatened,” the Daily Mail newspaper reported. Corus spokesperson did not respond to an email query sent by PTI. However, a senior company official said that direct and indirect job losses are imminent with closure of industrial operations, though he did not confirm to such a figure. “We have 1,920 employees on the company’s roll and 1,000 contractual workers. There jobs are under threat. There will be indirect job losses too but we cannot confirm the figure,” he said. (Hindustan Times)
Source: Other (13.05.2009)

Ukrainians want a part of kremikovtzi The Ukraine-based company Konkort has declared interest in purchasing the coking chemical mill and the thermal power plant of Kremikovtzi, said the head of CITUB at the plant – Vassil Yanachkov. He added that another option is for the state to purchase the TPP and resell it afterward. These are among the options for assets sale in order to pay the salaries of the workers. According to Yanachkov, the sale of the assets could be done during the insolvency procedure, in which the company is currently, and no approval by the creditors is required. Only an approval by Court is necessary and it should be demanded by the assignee in bankruptcy, Yanachkov pointed out.
Source: investor.bg (14.05.2009)

Sales of LZC fall by 30% in Q1 Lead and Zinc Complex AD (LZC), based in Kardjali, posted 30.3% less sales for the first quarter of 2009 to BGN 26.7 million, the non-consolidated report of the company showed. Turnover of the company that is part of the Sofix index slumped by 32.2% to BGN 27.9 million for the period January-March 2009. Expenses for the same period also fell to BGN 26.7 million, down by 33.5%. Profit rose by 19.6% to BGN 1.23 million.
Source: Pari (14.05.2009)

Iron ore imports hit record high China imported record amounts of iron ore in April and was also a net steel importer for the second month running, as the industry grappled with falling domestic ore output and slumping steel exports. The country imported a record 57 million tons of iron ore in April, an all-time high, up 9 percent from a month ago and 33 percent greater than last April. Customs data also showed China was a net importer of nearly 900,000 tons of crude steel, marking the second month running that inflows have exceeded outflows for the country, which had been a net steel exporter since 2005. "All of them are surprising figures. The figures show that oversupply is very likely to worsen in May and June," said a senior trading executive in a State-owned steel mill, who asked not to be identified, as he was not authorized to speak to the media. (Economic Daily)
Source: Other (14.05.2009)

Bulgaria Steel Mill Kremikovtzi, Brazilian CSN Negotiations Fail The negotiations between the Brazilian metallurgy giant CSN and the management of the troubled Kremikovtzi steel mill failed to yield a positive result. The mill's assignee in bankruptcy, Tsvetan Bankov, sent Thursday evening an official letter to Bulgaria's Economy and Energy Ministry to inform them about the negotiations' outcome. Bankov is adamant that the new version of the contract, proposed by CSN, did not have any practical realization. The Bulgarian information agency, BGNES, reports that the plan to terminate gas supply to the mill becomes now effective. The supply halt is being conducted in coordination between Bulgartransgaz and Kremikovtzi's management.
Source: Darik Radio (15.05.2009)

New punitive measures against Bulgaria The European Commission launched three criminal procedures against Bulgaria concerning ecology. The first is about omission in the Bulgarian plan for greenhouse gas allowances. The document should have been sent to the Commission on January 15 as part of commitments under the Kyoto Protocol. However, the data reported by the Ministry of Environment is incomplete. Bulgarian authorities have two months for adjustments prior to the next administrative sanction from Brussels. The second procedure is for non-implementation of the European requirements for risk management of major accidents involving hazardous substances. The state is obliged to collect information from industries that produce, store and use them - for example, mines using cyanide, fertilizers plants, chemical industry and military bases. Ministry of Emergency Situations must also have complete information about their plans for action in case of emergencies. However, this information is not collected by the office of Emel Etem and Brussels reported this as a violation. The third is for incomplete implementation of the environment impact assessment (EIA) for potentially hazardous projects - oil refineries, power plants, chemical plants, highways, airports, mines, dams, large swine farms and poultry farms. The Ecological Ministry must monitor the preparation of evaluations, but does not comply with Brussels. The ministry could not comment on the criticism, as they were not familiar with them. EC õàñ ñòàðòåä six ìîðå punitive procedures against Bulgaria in the field of ecology, including for European Ecological Network NATURA 2000 and the storage of Sofia garbage.
Source: Dnevnik (15.05.2009)

Kremikovtsi Gas Supply Cutoff Put on Hold The gas supplies for Kremikovtsi steel mill haven't been cut off despite the fact that by 01:00 pm yesterday Bulgargaz threatened to leave the mill without gas due to the plant's huge debts. Later, the Ministry of Economy and Energy ordered that the gas supplies cutoff be postponed by this morning. At a sitting yesterday evening, the authorities from the Energy Ministry discussed the future of the plant, while in the meantime the receiver was negotiating a recovery plan with the creditors.
Source: Standart (15.05.2009)

Rio Tinto receives go-ahead from US regulator for Chinalco deal Rio Tinto has received approval from US regulators with regard to the bonds issue and asset stake sale to Chinalco. Rio said US Committee on Foreign Investment has cleared the $7.2 billion convertible bond issue and Chinalco's indirect minority investment in Kennecott Utah Copper Corporation, fulfilling a key condition for the transaction to succeed. The Australian Competition and Consumer Commission also gave its go-ahead in March for the $19.5 billion deal, which includes the sale of key Rio mining assets worth $12.3 billion. The approval comes even as speculation is mounting that the sale may not succeed amid shareholder opposition and talk that Rio was considering raising money via a $7.57 billion rights issue instead of turning to Chinalco for funding. (Platts)
Source: Other (15.05.2009)

Kremikovtzi to turn into the new Boyana within 3 years Chief Architect of Sofia, Petar Dikov, said that there are plans for turning Kremikovtzi District into an area of low-store luxurious buildings. This means that within 2-3 years there may be a new quarter near Kremikovtzi, such as Boyana or Dragalevtzi. The plant, which was born exactly 50 years ago froze to death yesterday and said fairwell to its most polluting installation – the coke chemical mill. Even if it is reborn someday, the Northeast part of Sofia would never see such black clouds ever again.
Source: 24 chasa (16.05.2009)

12:43 p.m.: Kremikovtsi Dies on Its Birthday As of yesterday Bulgaria’s steel manufacturing giant Kremikovtsi is in clinical death. At 8:00 am worker teams began turning off the taps of the pipes that fuel the furnaces with natural gas. At 12:43 the gas supply for the coke-chemical plant stopped, which practically put halt all other activities, and, ironically, this happened on the very birthday of the plant. “Its two batteries were for the first time switched on precisely on May 15, 1963 and never went off in the 46 years that followed,” chief technologist Daniela Ermenkova said. The decision to cut off the gas supply became a must after the yesterday’s negotiations with the Brazilian investor CNS failed. The order for the closure was given by the Bulgarian Ministry of Economy and Energy.
Source: Standart (16.05.2009)

We still hope for an investor Tsvetan Bankov, assignee in bankruptcy at Kremikovtzi -Mr. Bankov, does the closure of the coke chemical mill mean lay-offs? -Most probably it would lead to discharging at least 250 workers. -How many are the employees at the mill at present? -They are 4798 as to May 2009. -Will the rest of the installations, that do not require gas supply, continue the operations? -All other operations can be started. In fact, the closure of the coke chemical mill leads to a series of problems concerning the cost of the output, the energy balance of the company. However, the closure of the mill does not mean the destruction of the whole plant. In proper economic circumstances, all the rest of the installations may be restarted – through securing funds, through commercial relations. If Kremikovtzi starts paying for the gas, the supply would be restored. Most probably in the begging only the electrical furnace would be started. -What do you think of the proposal for capitalization of the debts? -I find it a very realistic option. It is totally advisable as in this economic situation when there is no investment climate, which led to the lack of strategic investor. So it would be wise that the creditors to capitalize the debts of Kremikovtzi in order to preserve the plant in its present state so that it stabilizes. Afterward the creditors would be able to sell their stakes to a strategic investor. -Is CSN forever lost as a candidate for a strategic partner? -Not at all. I cannot speak of CSN’s name but I think they are a very serious group and a serious option for the future investor. It is all about the economic situation. I do not think that the interest of CSN has disappeared. I hope that other company, which have shown interest in the past few years, would turn their sight on the plant again.
Source: Standart (16.05.2009)

Workers on aid for a year Kremikovtzi workers will receive compensations for almost a year. Most of them would receive BGN 312 in the first 3 months, said the head of Labor Market Department at the Ministry of Labour and Social Policy – Elka Dimitrova. Metallurgists with bigger experience over 25 years would receive compensations for 12 months, but most of the workers – for 10 months. ‘We planned their requalification and search for work with specific caution. Most of the people would find jobs on the Sofia labor market as engineers, technicians, etc and would have to take requalification courses’.
Source: Standart (16.05.2009)

The Brazilians made 5 offers, each was worse than the previous one Since January the Brazilian giant CSN has made 5 offers altogether, said Lyudmil Pavlov, head of Podkrepa syndicate at Kremikovtzi. Each of them was worse than the previous offer. The bondholders sent 5 metallurgical expert 3 days ago and they made their suggestions. They proposed a recovery program to start within 2 weeks, which was supposed to go through capitalization of all debts. This would have cost only BGN 3 mln more. I do not understand why they did not make every attempt to save the plant, said Pavlov.
Source: Standart (16.05.2009)

It is early to say Farewell, Kremikovtzi It is early to say Goodbye, Kremikovtzi. The steelmaker lost forever only its coke chemical mill. It is just the technology is such – once stopped, the installation cannot be restored. The blast furnace may restart in time if a future investor decides to produce steel from iron ore through importing coke. If it is profitable. Let us not forget that the two electrical furnaces, producing steel from scrap, remain.And Kremikovtzi has plenty of scrap. About 10 mln tons at present, according to the management. And that does not even include the tons of metal, which would remain unused after the shut down of the coke chemical and blast furnace production. One can make the calculations: at capacity of the electrical furnaces of 300 thous tons a year (at 100% capacity usage) how many years can Kremikovtzi produce steel from the dozen tons of scrap. So do not worry, it is early to grieve over the dead body of the metallurgical plant. It can live for ages using itself. And if it does not continue to operate at loss. It is true that at least half of the workers would have to be laid-off. BDZ and the ports lost inevitably their big client, which produced 1-1.2 mln tons of steel in its prime and formed half of their profit. The other two Bulgarian steel companies Stomana Industry SA and Promet showed that steelmaking from electrical furnaces can be profitable, even at low metal prices. All that is left is to see how Kremikovtzi is going to be from now on. Is it going to find a good manager, is someone going to help the assignee in bankruptcy. Because if Kremikovtzi continues to accumulate losses, it simply does not deserve to exist.
Source: Pari (18.05.2009)

Providers to Cut off Electricity for Kremikovtzi? The management of Bulgaria's National Electric Company NEK and of the Bulgarian Energy Holding (BEH) are moving to cut off the electricity supply of Bulgaria's troubled steel plant Kremikovtzi. "If no funds can be found to pay off Kremikovtzi's electricity debt, it is clear that the supply would have to be cut off. The decision for that depends solely on the creditors of the factory", Bulgaria's Energy and Economy Minister Petar Dimitrov said during a visit to the AES Maritza East thermal power plant. Dimitrov pointed out that he had appealed to the steel-maker's creditors to prop up the plant financial but that only the Bulgarian state had provided any financial support for the mill so far. In his words, if the working group currently analyzing the condition of Kremikovtzi does not come up with a constructive plan to save the steel-maker, it will have to be liquidated, and its remaining assets will be sold out in an effort to compensate its creditors.
Source: Darik Radio (18.05.2009)

Tata Steel takes major retail initiatives Tata Steel said it has taken major retail initiatives to promote sale of its steel products in India, including doubling of its outlets to 1,000 in the next 2-3 years for its branded products. The second step would be to increase the number of steel junction outlets in the eastern region through franchises to sell all kinds of steel items like furniture, jewelry, cutlery and home building items and branded products of the company, a Tata Steel official said. The Jamshedpur-based steel major started its retail initiative in 1999 to reach out to the retail buyers. It has around 10,000 distributor-owned exclusive shops, including 3,000 in rural India, to sell its branded products. In order to take the retail initiative forward, the company had in 2003 started the "retail identity programme" wherein certain shops were identified to be converted as exclusive outlets for branded products. (Press Trust of India)
Source: Other (18.05.2009)

Plants cut the electricity consumption by 17 pct Decrease in household electricity consumption for the first 4 months of the year is 2-2.5 percent, as to the same period of 2008, while Industry cut its consumption by 17 percent. The figures were announced by Mardik Papazyan, head of NEK. The household consumption can be explained by the warmer winter, but the significant slowdown of industrial consumption is due to the global crisis.
Source: Standart (20.05.2009)

China not giving ground in iron ore talks China's steelmakers have not given any ground in benchmark iron ore price talks, an industry executive said, denying reports that they could soften their insistence on a 40 percent price cut. China's steel industry, the world's biggest, traditionally sets a global benchmark each year after lengthy talks with three miners that dominate the iron ore trade: Vale, Rio Tinto and BHP Billiton. "The position of the Chinese side has never changed," Shan Shanghua, secretary general of the China Iron and Steel Association (CISA), said. "Any news about our changes was speculation." Shan denied media reports that CISA could accept a price cut by between 30 percent and 35 percent. China's steel industry has been reiterating its view that term iron ore prices should fall by at least 40 percent to 2007/08 levels, pressuring miners to accept deep price cuts, as steel firms struggle with faltering demand. (Reuters)
Source: Reuters (20.05.2009)

Possible thefts at Kremikovtzi, workers warn After the gas supply cut at Kremikovtzi and before the recovery plan, the problem with the lay-offs is very delicate. Deputy chairman of the CITUB union at the steelmaker, Plamen Petkov, has been discharged due to alterations of the office position. Another problem is how to protect the plant from thefts. Only the coke chemical mill has cranes that weight about 300 thous tons. They contain about 13 tons of copper each. There are numerous transformers for 1000 KV each, which would cost up to BGN 7,000 on the black market. Although the Gendermery records every truck plate, the security at the plant is not good enough, said ex-workers of Kremikovtzi. Some of their collegues, well aware of the structures and the energy supply, have been reappointed as security, which raises some waries.
Source: Monitor (21.05.2009)

Tata says no decision on UK plant stake sale Tata Steel said it had not yet received an indication from Italy's Marcegaglia and South Korea's Dongkuk Steel whether they would go ahead with their planned purchase of a majority stake in one of its UK plants. Marcegaglia and Dongkuk in January agreed to buy an 80 percent stake in the Teesside plant in England, valuing it at an estimated $600 million. The memorandum of understanding for the sale expires in June. A Tata Steel spokesman said that its Corus unit was waiting for the prospective buyers to reveal their longer-term intentions for the plant. J.J. Irani, a director at parent holding company Tata Sons, told reporters that the sale would not go ahead. Tata Steel said later in a statement that its had not pulled of the deal. (Reuters)
Source: Reuters (21.05.2009)

Chavez Takes Over Venezuelan Iron, Steel Producers Venezuelan President Hugo Chavez announced the government will take over the hot-briquetted iron industry and other metal companies, increasing control of the mineral-rich Bolivar state’s output. Chavez said the government will seize companies including Matesi, Tavsa, Orinoco Iron, Comsigua and Ceramica Carabobo CA. The Venezuelan government nationalized the country’s largest steelmaker last year from Luxembourg-based Ternium SA and has taken majority control in the oil and telecommunications industries. Chavez has focused on gaining control of the metals industry as aluminum and bauxite companies buckled under low international prices. “These companies will be nationalized to create a single industrial complex,” Chavez said. “There’s nothing to discuss. We should have done this a long time ago.” The companies would be brought under the same management and included in plans to build an industrial complex to refine and process raw materials into finished products in a bid to reduce expensive imports. (Bloomberg)
Source: Other (22.05.2009)

Lead and Zinc Complex JSC (LZC) reported an accounting profits amounting to BGN 275 thousand in April 2009. Sales revenues are BGN 37,005 million against production costs of BGN 32,401 million, which forms an operating profit of BGN 4.604 million. After deduction of financing costs for interest on loans and the negative difference of change in exchange rates, LZC reported a net profit of BGN 1,507 million for the first four months of 2009. 7 316 tons of lead and 7 390 tons of zinc were produced for the January-April period.
Source: investor.bg (25.05.2009)

Kremikovtzi will smoke again, but less Metallurgical plant Kremikovtzi, which saw its coke chemical mill stopped last week, is preparing to start one of its electrical furnaces, said the assignee in bankruptcy Tsvetan Bankov. ‘We will produce as much as we can sell’, he added. The market is very tight, even dead, so the production scale would be small. Unfortunately, we would have to keep on the lay-offs. It is not right for one worker to feed three. Currently there is a technical preparation for starting the furnace. The idea is that the plant would work partially but to pay regularly for its electricity and gas supply. Trade partners and orders are needed so that a scheme for operations and payments can be proposed to the suppliers. As for the time being, the blast furnaces and the converters remain still.
Source: Trud (25.05.2009)

US to investigate threat of OCTG steel imports from China The US International Trade Commission voted Friday to investigate a complaint that OCTG steel products from China were sold at less than fair value in the US over the past two years. Five of the commissioners said there was an indication that domestic producers of certain oil country tubular goods are materially injured or threatened by the imports from China. The vote clears the way for the Commerce Department to determine whether to impose antidumping and countervailing duties on the imports. That could result in duties on around $2.7 billion worth of OCTG imports used in oil and gas exploration and drilling. The complaint was filed in April by US Steel, Evraz Rocky Mountain Steel Mills, Maverick Tube Corp., TMK Ipsco and the United Steelworkers union. The group filed the case after OCTG imports from China doubled to 2.2 million st in 2008 from 2007. (Platts)
Source: Other (25.05.2009)

Creditors of Kremikovtzi will encashed the assets On June 12 a meeting of the creditors of metallurgical plant Kremikovtzi will take place. It will determine the procedures for liquidation of assets of the debtor. This was decided by the Court on May 22, the assignee in bankruptcy Tsvetan Bankov announced. He added, however, that the forthcoming meeting of creditors does not mean that the fate of the plant has already been decided and they will go directly to sale of the assets, although in about three weeks it is to be decide on the method of assets valuation and selection of assessor . This is part of the bankruptcy procedure, a parallel move to the preparation of the recovery plan for Kremikovtzi. One of the biggest creditors, the holders of the EUR 325 million bonds issue, have hired foreign specialists who are currently inspecting the status of the enterprise and are preparing options for its revival. These will need to be made within one month after the publication of the court order for scheduling the meeting of creditors on the liquidation of assets in the Commercial Register. This is expected to happen by the end of the week. This means that by the end of June options for saving the plant should be prepared.
Source: Monitor (27.05.2009)

Court recognized BGN 2.3 bln of Kremikovtzi debts The debts of Kremikovtzi steelmill of BGN 2.3 billion were recognized by the magistrates. The decision of Sofia City Court, defining the final list of creditors, was announced Friday. The BGN 698 bln state aid is included in the list under condition – before decision of Sofia Administrative Court. The assignee in bankruptcy appeals against the return of the sum at the SAC. In case the jury acknowledges his appeal, the state aid would be removed from the list of Kremikovtzi debts. As a result, the State, which is the biggest creditor currently, will rank second in the list after the bondholders who are owed EUR 325 mln. Almost all 230 debts to creditors were recognized by the Court.
Source: Standart (27.05.2009)

China to reject Japan deal for 33 pct iron ore cut Chinese steelmakers, led by national champion Baosteel, will reject a 33 percent cut in iron ore prices agreed by mining company Rio Tinto and Nippon Steel. The China Iron and Steel Association (CISA), the industry group that represents the country's major steel mills, will soon issue a statement on the rejection. The rejection is widely expected as Chinese mills have stood firm on demands for a 40 percent or more price cut, reversing last year's doubling in rates that came just before a collapse in demand. China is rushing to circle the wagons after Rio Tinto said it had agreed to cut key iron ore prices to Japanese steelmakers by one-third in this year's first contract. South Korea's POSCO will accept the same deal, sources said, following its Japanese peers as is the usual practice but undercutting Chinese steelmakers who are looking for allies to hold out for cheaper rates. (Reuters)
Source: Reuters (27.05.2009)

ArcelorMittal SA hikes steel prices JSE-listed ArcelorMittal SA, the South African unit of the world's No. 1 steel maker, plans to increase prices for its steel products in line with global trends, the first such rise since September last year. ArcelorMittal said in a statement the planned increase reflects the generally more positive pricing sentiment on international markets over the past few weeks and the slight upward trend in both long and flat steel prices. The company said its June prices will remain unchanged from May, but in July it planned to increase flat steel prices by between 4-5 percent and long steel prices by 5-6 percent. "This is the first increase in most steel product prices since September last year - between September 2008 and May 2009 South Africa steel prices have declined by over 60 percent on average," said ArcelorMittal SA's spokesman Sven Lunsche. (Reuters)
Source: Reuters (28.05.2009)

Russia cuts steel output down almost one third January-April 2009 Russia cut crude steel production 32.2% year-on-year in January-April to 17.2 million tonnes. Converter steel production fell 26.1% to 10.67 million tonnes, and electric steel production fell 29.4% to 5 million tonnes. Pig iron production plummeted 30.8% to 12.5 million tonnes. Finished roll production dropped 29.1% year-on-year to 14.98 million tonnes. The report said only one steel plant, Metalloinvest's Oskol Electrometallurgical Combine (OEMK), ran at full capacity. The others cut output 12%-75%. Output of long products shrank 29.5% to 8.59 million tonnes, stainless steel - 60% to 17,200 tonnes and flat products - 18.2% to 6.3 million tonnes. (Kyiv Post)
Source: Other (29.05.2009)

ThyssenKrupp looking for partners for several operations ThyssenKrupp AG is looking for partners for several parts of its business to limit the impact of the economic downturn. Mr Ekkehard Schulz CEO of ThyssenKrupp said that it is considering offering iron ore miner Companhia Vale do Rio Doce a larger stake in a steel plant the German steelmaker is currently building in Brazil. Vale currently owns a 10% stake. ThyssenKrupp holds the remaining 90% in the EUR 4.5 billion steel plant, where operations could be further delayed due to lackluster demand for steel amid the recession. The size of the stake Vale may be offered is still unclear. Mr Schulz also said that “ThyssenKrupp is on the lookout for partners in its ailing shipyard business, which is similarly suffering from poor demand and order cancellations as customers experience financing difficulties. We have to see if we can manage the business alone or if we had better look for partners. At the moment our leaning is more toward a partner." Mr Schulz further said that he is in favor of a consolidation of the stainless steel market, in which all players currently have serious problems. (Dow Jones)
Source: Other (01.06.2009)

OTzK Polluted Kurdzhali Again with Sulphur Dioxide Lead and Zinc Complex (OTzK) polluted Kurdzhalitwice, said RIEW-Haskovo. The average hourly level of 350 micrograms per cub.m air for sulphur dioxide was recorded by the automatic measuring station Studen Kladenetz in Kurdzhali. At 09:00 a.m. on Monday the registered concentration was 896.46 micrograms per cub.m or 2.5 times over the average hourly permitted level. In the next hour the level was 584.91 micrograms per cub.m, which is 1.6 times above the permitted level for this gas. Right after the first registered pollution of the air, directions have been given to OTzK for decrease of the emission of sulphur dioxide in the atmosphere. The regional environmental inspection keeps on the monitoring of the quality of air in Kurdzhali.
Source: Darik Radio (01.06.2009)

China Iron Ore Surplus May Increase China, the world’s biggest steelmaker, risks exacerbating an iron ore surplus this year after imports exceeded demand, an official from the China Iron & Steel Association said. “The risk of over-importing is building,” Luo Bingsheng, vice chairman of the association, said at a conference. Iron ore imports in the first four months exceeded actual demand by 27 million metric tons, he said. The global iron ore surplus may be between 200 million tons and 300 million tons this year, he said. Purchases of iron ore and metals have increased as China’s government begun to spend 4 trillion yuan on housing, transportation infrastructure and other projects. China boosted iron ore imports to a record in April for a third month. An oversupply of the raw material should prompt Chinese steelmakers to demand a bigger cut in iron ore prices than agreed by Japanese rivals, Shen Wenrong, the chairman of Jiangsu Shagang Group Co., said. (Bloomberg)
Source: Other (03.06.2009)

Bankruptcies expected in coalmining Coalminers face a real threat of being shut down and 20,000 people being laid-off, said the head of the independent miners unions at CITUB – Pencho Tokmakchiev. He explained that the sector is in an urgent need of government aid to cope with the crisis. CITUB demanded that the natural gas price is decreased, as well as the industrial electricity not get any price hikes. The union added that the gas price, Bulgargaz sell on, is twice the price of gas in the rest of Europe.
Source: Novinar (04.06.2009)

Gorubso-Kardzhali JSC threatened by bankruptcy 550 workers from mining company Gorubso-Kardzhali JSC issued a note of protest against the inaction of the Ministry of Environment and Water. The Ministry has been pulling back the investment intentions of the company to reconstruct and expand the installation for refining of gold-containing ores for two years. No response. After an exploration, in 2006 Gorubso-Kardzhali started operations at the gold-bearing field of Chala, in which the company has invested BGN 15 mln. Since September 2008, when the legally defined 3-month period for issuing a permit started, there has been no answer by the Ministry. Whats more, Dzhevdet Chakarov has not given any explanation for the delay. Amid the global economic crisis and slump in metal prices and markets, the new installation for gold extraction is the only option for survival of the 60-year company for lead-zinc ores, the company said. The construction of the installation would not only keep the 550 jobs at Gorubso-Kardzhali JSC, but would also open new jobs and would ensure additional income for the budget of Kardzhali Municipality.
Source: Pari (04.06.2009)

US Auto Bankruptcies May Cost Steel Cos Nearly $69 Million Documents The bankruptcies of both General Motors Corp. and Chrysler LLC will cost five steel companies a combined $68.78 million if the auto makers fail to pay their bills, according to court filings from the two auto makers. GM and Chrysler, the largest and third-largest carmakers in the U.S., may owe even more money to steelmakers depending on whether other steel producers filed claims that weren't disclosed among the list of top 50 creditors in each of their bankruptcy filings. Similarly, the figure may be lower in Chrysler's case as it started to emerge from bankruptcy this week. The U.S. automotive industry is the second-largest steel consumer in the U.S. followed after construction. The U.S. automotive industry accounts for about 16% of total U.S. steel shipments. Steelmakers and component part suppliers have been among the hardest hit by the bankruptcies and took action months ago to conserve cash by slashing production, cutting jobs and shelving expansion projects. But now both face the prospect of unpaid bills. (CNN)
Source: Other (04.06.2009)

ArcelorMittal cuts work week at Ukraine’s biggest mill ArcelorMittal Kryvy Rih, Ukraine’s largest steel mill, announced plans to cut its work week for daytime workers from five to three days. Officials at the mill said the measure was necessary as a temporary adjustment amid low demand for steel during the global recession. It remained uncertain whether the shortened work week had the blessing of the plant's influential trade union. But officials at the factory defended the move, pointing to other Ukrainian mills which also cut their work weeks and labor forces amid falling steel orders. The Kryvy Rih-based mill was purchased in 2005 for $4.8 billion by Mittal Steel, then the world’s largest steel group. The London-headquartered group outbid rival Arcelor, only to get bigger by merging in 2006-2007 with the France-based group. The ArcelorMittal group has been hailed for boosting tax payments and modernizing their Ukrainian mill. But the current economic crisis is proving a tough test for the entire steel sector of Ukraine, which ranks among the top 10 producing countries worldwide. (Kyiv Post)
Source: Other (05.06.2009)

EU help for Kremikovzti – after more than 1000 laid-off When the laid-off workers from Kremikovtzi reach 1000, Bulgaria may rely on support for active measures for the labor market by the EU Globalization Fund, said deputy Minister of Labor – Dimitar Dimitrov. He pointed out that requalifying activities and other special trainings for unemployed workers from the metallurgical combine may be allocated about EUR 7 million by the European fund. Social Ministry, together with social partners, prepares a project for the utilization of the Fund which was established to support the major economic structures that step into mass lay-offs. One of the requirements for obtaining funds is that the discharged employees are at least 1000, said Dimitrov. He added that since April union at Kremikovtzi has declared intention to lay-off 1500 employees, but by the end of May about 230 were released.
Source: news.bg (05.06.2009)

Japanese steelmakers start Q3 wire rod export talks Japanese integrated steelmakers are conducting their wire rod export negotiations in earnest on shipments to Asian destinations such as China and Thailand in the July to September 2009 quarter. They have already offered what they negotiate for shipments to China. It is understood that the terms on offer call for a certain price increase toward the settlement of a flat price level on the whole. In China, automotive demand for wire rods is on the upswing, with construction demand arising as well. As a result, major integrated steelmakers have reacted with a domestic price increase of wire rods for June shipments. Among those steelmakers are Baosteel Co Limited and Wuhan Iron & Steel Corp Group. There are fears about small and midsize steel mills resuming operations, leading to overproduction in wire rods, once local demand for wire rods perks up and transaction prices of wire rods advance accordingly. (Steel Guru)
Source: Other (08.06.2009)

Kremikovtzi supplied with gas Kremikovtzi is being supplied with gas since June 4 and processes scrap, said the assignee in bankruptcy Tsvetan Bankov. The processing of materials would continue until June 15. Only the electrical furnace operates and the aim is to reduce the debts of the steel plant and to pay the advance payments of the workers for May. The current gas supply is paid daily after a new contract with Bulgargaz, said Bankov. The steelmaker supplies hot-rolled steel to 5 of its regular clients. The steel production needs gas worth BGN 100-130 thous a day. Thanks to the restarted operations, the planned for June lay-off of 1500 workers would be delayed for the end of August.
Source: Standart (09.06.2009)

OTzK Polluted Kurdzhali Again, Shut Down Lead Installation Lead and Zinc Complex (OTzK) shut down operations of the agglomeration installation of its lead manufacture after instruction made by the RIEW Haskovo. At 10:00 a.m. the automatic measuring station Studen Kladenetz reported sulphur dioxide levels of 847.22 micrograms per cub.m or 2.4 times above the average hourly permitted level. An hour later the measured levels of sulphur dioxide were once again above the permitted standards. It was 547.06 micrograms per cub.m at allowed level of 350 micrograms.
Source: Darik Radio (10.06.2009)

Foreign steelmakers join to oppose Rio-BHP deal Japanese, Chinese and European steelmakers joined forces to fight a plan by Rio Tinto and BHP Billiton to link up iron ore operations, while China called for "a fully open international market". Steelmakers believe a tie-up between the second- and third-largest producers of the raw material to make steel would further concentrate the industry, which saw prices quadruple from 2004 to 2008. "A merger of iron ore assets of this type in a world market already dominated by just three suppliers would not be in the interests of the steel industry, European consumers or the European economy," industry body Eurofer said. Debt-ridden Rio ripped up its $US19.5 billion deal with China state-owned metals conglomerate Chinalco, opting instead to combine its western Australian iron ore operations with those of BHP in a 50:50 joint venture. The two mining heavyweights, which with Brazil's Vale account for nearly 70 per cent of the world's traded iron ore, face tough anti-trust scrutiny, but analysts say the planned venture's shrewd structure could mean they sidestep some concerns.
Source: Reuters (10.06.2009)

Bulgarian state knocked down as top Kremikovtzi creditor The state became the second largest creditor of Bulgaria’s debt-saddled steel maker Kremikovtzi after Sofia administrative court ruled that the BGN 698.9 million government aid is no longer due for payment. The decision moved bondholders on the top of the creditors’ list with an amount of BGN 695 million. The economy ministry said it will lodge an appeal within the 14-day statutory period. Following the court ruling, Kremikovtzi’s debt shrank to around BGN 1.65 billion, which facilitates the implementation of a recovery plan at the mill, said sources close to the bondholders. The state aid is the result of write-offs of BGN 431 million of government receivables from the plant at its privatisation in 1999 plus interest. Creditors will get together for their second meeting tomorrow but state representatives will again vote as the largest creditor as the court ruling has not come into effect yet. The rescue plan will not be on the negotiations table as it has not been drawn up yet. Creditors will discuss the appointment of appraisers in case of liquidation, although this is not on the agenda at the moment, said Georgi Proharski, who represents the bondholders committee. While in the spring when bondholders and the government were locked in a fierce battle over the fate of the beleaguered steel maker, now the two sides are seeking out a common solution. The most viable option at the moment is conversion of the company’s debt into equity capital so that the plant can be powered up after insignificant investment in flue gas desulphurisation installations and working capital.
Source: Dnevnik (11.06.2009)

Vale agrees 28% price cut with Nippon and Posco Vale of Brazil, the world's largest iron ore producer, agreed to a 28 per cent cut in annual prices for its ore sales to Japan and South Korean steelmakers, a smaller reduction than the 33 per cent offered by its main rival Rio Tinto. The agreement with Nippon Steel of Japan and Posco of South Korea further damages the traditional benchmark system, which has been the cornerstone of the iron ore and steel industry for the past four decades. The first price agreement between a miner and a steelmaker has normally created a benchmark the rest of the industry follows. The smaller cut for Brazil fine iron ore reverses last year's bigger price increase for Australian ore. Rio Tinto and BHP Billiton, which mine almost all their ore in Australia, have argued in the past that they deserved a higher price for their ore because of lower transportation costs from Australia to China than from Brazil to China. (Financial Times)
Source: Other (11.06.2009)

Creditors share Kremikovtzi The biggest group of Kremikovtzi’s creditors – the bondholders, will present a recovery plan within the legal period – June 29, said their representative Georgi Prohaski. He said that the basic idea is capitalization of the debts, which means that the private investors would receive properties for the debt of the steelmaker to them. Installation able to operate at the current market would not be terminated. The production capacity would determine the number of the employees at the plant. However, mass lay-offs would be necessary, said Prohaski. He hopes that the recovery plan would be voted in cooperation with the various state representatives, which are also part the creditors. Among them are the State Receivables Collection Agency, NEC, Bulgargaz. Prohaski also hopes that the decision of the Administrative Court from June 10 would not be litigated.
Source: Trud (15.06.2009)

Steel ministry proposes 15% export levy on iron ore Steel ministry (of India) has proposed to the finance ministry to reimpose 15% export duty on iron ore (lumps and fines) in order to increase the availability of ore for domestic steel makers. In addition, the steel ministry has recommended levy of 15% duty on imports of hot rolled coils (HRCs), which is used mainly by construction and automobile sectors. The finance ministry scrapped 15% duty on lumps by simultaneously lowering export duty on fines to 5% last year end with a view to tackle global economic slowdown. Iron prices have then crashed almost 50-60% as compared to July 2009 level. As per the stand taken by the steel ministry, exports of iron ore should be discouraged and the ore should be conserved for the domestic steel industry, said a senior official in the steel ministry. For the fiscal year 2008-09, India’s iron ore exports registered a marginal 0.4% growth to 104.7 million over the previous year, backed by moderate revival in demand from Chinese steel producers. (Economic Times)
Source: Other (15.06.2009)

Lead reports 100 percent growth from the bottom, 55 percent below the record levels Prices of raw resources slowly recovered in the last six months as lead reported 100 percent growth as from its bottom level of USD 900 per ton to the current price of USD 1,800 per ton. The resource price is of great significance to Lead and Zinc Complex (OTzK) – Kurdzhali as exactly the price fluctuations lead to a massive loss and in 2008 the financial result was a negative BGN 37.6 mln. Lead price is, however, still 55 percent below its record USD 4,000 per ton. Lead is also a basic resource for the production of car batteries by the BSE-listed Monbat JSC and Elhim Iskra JSC. A growth of 70 percent from the bottom to USD 1,670 per ton was reported for zinc on Friday. Zinc represents about 50 percent of OTzK’s output. The base metal si still 63 percent below its record from end 2006. Copper reported about 70 percent hike reaching USD 5,240 thous per ton. As to the record June 2008 prices of USD 9,000 the current level is 42 percent lower. Copper is of great importance for KCM SA – Plovdiv and Pirdop-based Aurubis (ex-Cumerio Med). Aluminium price has increased by only 25 percent reaching USD 1,640 per ton. It is 50 percent below the June 2008 record.
Source: investor.bg (15.06.2009)

Kremikovtsi tops bad corporate management table Steel mill Kremikovtsi has the worst corporate management of all Bulgarian listed companies, according to a poll of 16 fund managers, brokers and financial analysts. The ailing steelmaker was joined by some of the leading firms by market capitalization on the Bulgarian Stock Exchange (BSE) including industrial conglomerate Chimimport and fuel distributor Petrol. In the list are also businessmen such as Nikolay Banev, Valentin Zahariev, Vassil Bozhkov, Mitko Subev and the partners at the varna-based economic group TIM.
Source: Dnevnik (15.06.2009)

JSW Steel eyes exports to keep US arm afloat India’s largest private steel maker JSW Steel is eyeing export markets such as South America, Mexico and Chile to keep its US subsidiary — JSW Steel USA —afloat. The US subsidiary, which is operating at 10-15% production capacity currently, will start exporting steel plates and pipes to the other American markets from next year after meeting domestic demand, JSW Steel managing director Sajjan Jindal said. “There was a dearth of orders last year after the financial crisis led to the recession in the US. But we are seeing a revival in demand from construction and automobile sectors in the country and have received some orders too,” Mr Jindal said, adding that the US subsidiary will increase its capacity utilisation once it starts exporting to overseas markets. JSW Steel’s steel plate and pipe mills in Texas has the capacity to produce 10 lakh tonne steel plates and 5 lakh tonne pipes every year. So far, the company has received orders for two lakh tonne plates and one lakh tonne pipes. (Economic Times)
Source: Other (17.06.2009)

A lot of money is made during crisis and scoundres multiply 10-fold Metodi Ignatov, CEO of Klockner Metalsnab Mr. Ignatov, what chaged after you joined the concern Klockner? - Klockner&Co. is one of the biggest global distributors of metals. The Duisburg-based company has a 108-year experience in the sector and decided to invet in the country acquiring a company, which used to be the monopolist on the market. It kept ‘Metalsnab’ in its corporate name as we are famous for it in many regions. We use their enormous experience in meta distribution by adopting it to Bulgaria and the Balkans. What are the advantages of the new technology for trade in metals? - We would be aware of which of our products hold the biggest share of sales in storehouse management. This is extremely important in analysing our operations up to now and for what to plan in the future. As for now we expect activization of the big construction companies, which have funds. What’s even better is that they want to work with a respected copany with established name, guaranteeing correctness and transparency. We also have the latest version of a quality certificate under ISO 9001:2008, which also makes us very competitive. Klockner are famous for their logistics base in Germany and Western Europe and their ‘metal-to-door; deliveries. Currently we are developing similar service in Bulgaria. Our customers started to recognise the advantages of the door-to-door deliveries. In 2008 the volume of products delivered through our transport was about 10%. Now it is 30-34%, which is almost every third product. What are your plans for 2009 and 2010? - The investment and manufacture program of Metalsnab is long-term and has been coordinated with the management of Klockner. We have planned EUR 30 thous for purchasing new lengthwise cutting machinery. Such equipment is already operating in Bourgas, varna, Sofia and Rousse. Another investment, offered in many places in Europe, is surface cleaning of metals. They are covered with special ground coat for fire safety and against corrosion. This investment is very serious and is for EUR 150 thous. The third serious project is the semi-robotic system, preparing the rebar for direct use in construction. The investment is for about EUR 180-200 thous. We work together with the unit of Klockner in Duisburg. What is the situation in Germany? - There is loyal competition in Germany, in Bulgaria it is not so. If we all work keeping the normal trade agreements, a lot of companies would feel uncomfortable on our market. Lots of companies have deposits of metal, we do as well. We created a scheme thanks to the fact that Klockner has network throughout Europe and we help each other. Bulgaria is a small country and does not have big potential for metals trade. What do you think of the competitiopn? - There are enough countries around us with powerful industries, the Black Sea is an open corridor: Ukraine, Russia, Romania produce a lot of metals, Turkey as well. This is the way – to place the companies under control and the on the market – duties, taxes, social securities, only this way the filter for the better traders would be proper.
Source: Pari (18.06.2009)

Steel Demand to Gain 8% in 2010 as China Grows Global steel demand will jump 8 percent next year, boosting prices, as economic growth recovers in China, the world’s biggest metals user, according to Harbor Intelligence, a commodity research firm. Rising consumption, a weaker dollar and higher energy costs will push prices for cold-rolled steel up 36 percent next year, Rodrigo Vazquez, a vice president at Harbor, said at an industry conference in Chicago. This year, global steel usage will contract 13 percent as the global recession crimps manufacturing. Prices for cold-rolled steel will plunge 34 percent this year before recovering in 2010. “An improvement in growth, especially in China, will create higher demand,” Vazquez said. “The trend of urbanization in China will continue and substantially” increase the use of the metal. (Bloomberg)
Source: Other (18.06.2009)

ArcelorMittal had biggest surplus of CO2 permits in EU ArcelorMittal had the biggest surplus of carbon dioxide permits in the European Union emissions trading system in 2008. Carbon Market Data said that ArcelorMittal’s 2008 surplus of 20.8 million tonnes, valued at around EUR 260 million at today’s benchmark spot price on the BlueNext exchange in Paris, may help the company offset the surge in power prices. With the current crisis hitting the steel sector and forcing it to cut production, ArcelorMittal should see in 2009 a record surplus in carbon allowances. ArcelorMittal has cut production by as much as 50% and eliminated jobs as the global economic downturn curbs orders from automakers and builders. Raw steel production in the 27 member European Union shrank by 49% in April as compared with a year earlier. RWE AG had the biggest shortage of carbon dioxide allowances in 2008. It emitted 146 million tonnes of CO2 last year as compared with an allocation of 80 million tonnes. (Bloomberg)
Source: Other (19.06.2009)

SAIL, Tata, JSW, Essar may face anti-dumping duty in Thailand Thai authorities are about to slap up to 32 per cent anti-dumping duty on import of a vital steel product from India even when the Indian government has remained indecisive on a similar curb against inflows from China, Ukraine, Egypt and other countries. The Indian firms which will face anti-dumping duty in Thailand include SAIL, Tata Steel, JSW Steel and Essar Steel on their export of flat hot-rolled coils, used by the manufacturing sector, as per a notification of the Thai Foreign Trade office. However, the Thai Committee on Dumping and Subsidy, which has cited over 350 per cent surge in imports from India during January-May this year, has given a chance to the Indian companies to put forth their objections to it within a month. The Thai committee has recommended a maximum 31.92 per cent anti-dumping duty on import of the steel product manufactured by Tata Steel and other companies. In the case of SAIL, JSW Steel and Essar Steel, the duty stands at 26.81 per cent. (Economic Times)
Source: Other (22.06.2009)

What would OtzK acquire? The general annual shareholders meeting of Lead and Zinc Complex (OTzK) – Kurdzhali would vote on June 30 for the acquisition of Gorubso-Madan JSC – Madan. The vendor would be the majority owner of OTzK – Intertrust Holding JSC. The subject of the deal are 39,000 shares of Gorubso-Madan’s capital. A check at the Central Depository shows that Gorubso-Madan has 410,967 shares, which means that the deal concerns less than 10 percent of the company capital. According to the Trade Register, Gorubso-Madan has issued 779,967 sharers and the deal concerns about 5 percent of the mining company’s capital. The deal would be valued by a certified valuer according to the current legislation. The main part of the extracted lead-zinc sulphide ore is supplied to Lead and Zinc Complex JSC as it is a basic resource for production of metals.
Source: investor.bg (22.06.2009)

NEK shuts down the electricity for Kremikovtzi Electricity for the metallurgical plant Kremikovtzi may be shut down at the beginning of next month, said the Executive Director of the electricity system operator at NEK Ivan Ayolov, who pointed the conditions under which the supply would be terminated. Kremikovtzi owes NEK about BGN 130 million. Gas supply has already been suspended in the plant and currently there are no operations at the steel mill. Because of a debt of BGN 4.5 million the electricity for the Chugunoleene plant in Ihtiman was supposed to be turned off, but the company refused to cooperate for the power cut. The power would be stopped there, when an option for power supply to household consumers and other businesses, not passing through the power line for the plant, is found.
Source: news.bg (22.06.2009)

Bulgargaz sells the debt of kremikovtzi, accepts offers until July 30 Bulgargaz offered kremikovtzi’s debt of BGN 106 mln and the offers for the deal will be accepted until July 30, said Bulgargaz’s Ceo Dimitar Gogov. Gogov added that most probably the Bulgarian Energy Holding will not buy the debt of the steelmaker, buit would be happy if there is an offer made by the bondholders. According to him, there are already several applications for the debt.
Source: investor.bg (23.06.2009)

Kremikovtzi debt to Bulgargaz draws several suitors Several companies have expressed interest in the purchase of the BGN 106 million liabilities of Bulgaria’s ailing steelmaker Kremikovtzi to state-controlled gas company Bulgargaz, said the gas firm’s executive director Dimitar Gogov. The candidates should state their intentions by June 30, Gogov noted, saying he hoped bondholders would also show up as prospective buyers.
Source: Dnevnik (24.06.2009)

European Commission sets 24% AD duty on Chinese wire rod EU member states have agreed to support a proposal of the European Commission to impose an anti-dumping duty of 24% on imports of wire rod from China. The measure is applicable for five years as from the beginning of August 2009. The European Confederation of Iron and Steel Industries strongly welcomed the decision. Mr Gordon Moffat director general of EUROFER said “We are satisfied with this outcome which sends out the clear message that unfair trade practices are not tolerated by Europe.” Mr Moffat added that “Since the onset of the financial and economic crisis we have seen a proliferation of protectionist measures worldwide which is affecting about 70% of world steel production”.” Europe is notable by the complete absence of protectionist measures on its market. However, the consequence of this is that protectionism elsewhere drives dumped imports onto the open European market. This has been a contributory factor in EUROFER’s legitimate use of trade defence against dumped imports of wire rod from China. (Steel Guru)
Source: Other (24.06.2009)

Chugunoleene will stop temporary Chugunoleene JSC will suspend production from July 1 to August 31 this year, announced by the company. The decision was made because of the extended vacation of the main clients of the plant. The two-month period will be used for the maintenance of all major machinery and equipment. Production and administrative staff with a few exceptions will be out on unpaid leave. Meanwhile, the company announced that by September 1, 2009 a new induction furnace will be installed and put into operation.
Source: Monitor (25.06.2009)

NEK phases out power supplies to troubled Kremikovtzi Bulgaria’s national power grid operator NEK has started to cut power supplies as it seeks to collect upwards of BGN 150 million in outstanding debt. Metal companies that slashed production under the weight of the economic recession bore the brunt of the campaign. Kremikovtzi, which tops the list of debtors with a ballooning BGN 130 million, will be gradually shut off, NEK executive director Mardik Papazyan told Dnevnik. The debt-saddled steel mill has already been ordered to reduce power consumption to 20 MWh and come up with a debt settlement plan if it wants to keep volumes flowing in. The plant has had another debt of more than BGN 70 million rescheduled under the Cabinet of the National Movement for Stability and Progress (NMSS). Bulgaria’s Electricity System Operator (ESO) has already said it will turn the tap on the steel maker from July 1 in a move that has won over the management of the Bulgarian Energy Holding (BEH), the catch-all structure for the country’s top energy assets, including NEK. BEH executive director Galina Tosheva said ESO will use all means to keep Kremikovtzi’s debt pile at bay. The plant’s receiver Tsvetan Bankov said power use must be trimmed down by 2400 hours local time on Thursday. But sources say power will continue to trickle to the mill at least until the general elections on July 5. Ihtiman-based cast iron foundry Tchugunoleene also faces cut-off unless it pays down its BGN 4.5 million debt to the grid operator by July 7. ESO executive director Ivan Ayolov said the company will seek sanctions for the plant, which shut out its teams on Monday. Statutory rules require electricity consumers to comply with the operator’s instructions and turn off capacities if ordered. Ilchev said ESO has rejected a proposal by the plant to reschedule its debts, some of them dating back to 2003.
Source: Dnevnik (25.06.2009)

Anglo rejection of merger proposal "regrettable": Xstrata Anglo American's rejection of Switzerland-based mining group Xstrata's "merger of equals" proposal is "regrettable," Xstrata said, arguing that the proposed deal has a "compelling" strategic rationale. "It is well recognised that the combination of Xstrata and Anglo American is a natural fit and the most compelling major transaction available in our industry," said Mick Davis, Xstrata's chief executive, in a statement. "We remain convinced of the undeniable logic for a merger of equals between Anglo American and Xstrata," he said. The board of Anglo American said June 22 it had unanimously concluded that a proposed merger with Xstrata "would not be in the interest of Anglo American shareholders," arguing that a combination with Xstrata "would profoundly impact the nature of the group's portfolio by significantly diluting Anglo American's unique exposure to the structurally attractive platinum, iron ore and diamond markets while increasing exposure to nickel and zinc." (Platts)
Source: Other (25.06.2009)

Zlatinov: Ferrous and non-ferrous metals undoubtedly bounced from the bottom Dr. in Economic Science Ivan Zlatinov, chairman of the Board of Directors of Makmetal Holding JSC and deputy chair of the Bulgarian Association of Recycling. -Mr. Zlatinov, what decreased more rapidly amid the crisis, the supply or the demand of scrap? The boom of the global financial crisis affected seriously the metals sector, including trade in scrap. Taking into consideration that its obvious effect in the sector started in the end of last summer, when is the seasonal drop down in scrap prices, you can say that the initial symptoms were decrease in supply. Most players in the sector stored scrap hoping the prices would go up in September. Of course this did not happen and on the contrary, prices dropped vastly, which was the obvious effect of the global slump of metals demand. -Are there any signs of improvement on the market, did the prices and traded quantities bounce from the bottom levels? This question is of extreme importance and the correct answer is expected by all players on the metals market, including in Bulgaria. For our great satisfaction, we managed to develop an anti-crisis program and took fast and fundamental measures back in October 2008. Now we value the move as it gave us significant advantages amid the unprecedented crisis. Taking into account the strategic significance of the metals sector for the economy and for the general existence of the economic systems, on the one hand the new government and international measures, and on the other hand our estimate was for reaching the bottom in the period between February and April 2009. Fortunately, we did not divert a lot. There is already a revival on the market. The indications for this are numerous – prices moved up, traded volumes increased, others than Stomana Industry SA woke up. By the way, we should point out that despite all obstacles our main client for scrap in Bulgaria – Stomana Industry SA, remained a loyal partner for the scrap deliveries, not allowing the destruction of the sector. Latest analyses of the world specialists in the metals sector, developed under the guidance of METAL BULLETIN and LME, present solid arguments and indicators that the recession in the global metallurgy is ending. -What those arguments? Some of the most important are: -Money is flowing back in the metals trade. Consumers, investors and banks direct funds in this sector; -Due to the depletion of the stocks in metals and metal products, there is an increase in orders for their production starting March 2009 as to September 2008; -There is growth of almost all base metals and readiness for a new increase in July; The effects of the massive anti-crisis governments’ programs, mostly by the USA, China and EU, are becoming more and more obvious. Implementation of the infrastructure components of the programs appeared a powerful engine for the salvation of the metals sector; -The taken adequate measures, concerning the auto sector also affect positively the demand for metals, including the direct stimulus for returning old automobiles at purchasing new ones. Thus as a conclusion I should say that the worse is behind us, there is light in the end of the tunnel and we should go back to our normal business at ease. -What is the impact of China and the external markets at general on the scrap trade in the last 2-3 months? Answering this question, I would like to face a bigger period of time – not only the last 2-3 months, as China has a special and important influence over the global metal production. It is felt especially strongly in the last 2-3 months. First, China allocated a vast amount of money for infrastructure projects – more than 4 trillion yuan, which did not allow the collapse of the metal market in the country. Second, China decided that it was the perfect moment for fill in its strategic reserve of non-ferrous metals – copper, aluminium, stainless steel, etc. The government bought over 300 thous tons of copper and 600 thous tons of aluminum in the first half of 2009. The quantities are expected to exceed 1 mln tons for each until the end of the year. -Do you plan the construction of a recycling plant (smelter) for non-ferrous or ferrous metals? Makmetal Holding JSC has focused on the gathering, transportation, temporary storage and processing the scrap. As for the moment we do not plan investments in a smelter installation. However, we have a serious investment program focused on the recycling of OUV (out-of-use vehicles), OUEEE (out-of-use electric and electronic equipment) and the accompanying residue products. -According Anton Petrov, member of the Board of Directors of Stomana Industry SA, scrap price has dropped less than the price of end steel products in Bulgaria and that the scrap prices in Bulgaria were temporary higher than the price of the imported scrap. What holds the scrap prices in Bulgaria? -Scrap prices in Bulgaria are market prices. Bulgaria has an open economy and the impact of the international markets is serious. Especially taking into account that we share a border with Turkey, which is a larger consumer of scrap each year because it has installations with capacity over 18 mln tons of steel from scrap. Naturally, scrap market in Bulgaria has its characteristics, the most important of which is that Stomana Industry SA is a market maker on it. Your 2007 sales report a slowdown as from 2006. What are the reasons for this, lower scrap prices, lower traded volumes or the stronger competition in the sector? Competition in the sector is very strong, which affects all players. On the one hand, it disables the monopoly on the market, on the other hand, it stimulates the implementation of more and more modern technologies and equipment in order to remain on the market. The decrease reported in 2007 is due mainly to the restructuring started in 2006, in particular – the transformation of Makmetal Holding JSC into a recycling company.
Source: investor.bg (25.06.2009)

Heavy industry emissions targetted by EU European Union environment ministers have cobbled together an agreement on plans to reduce industrial pollution, combining together a patchwork of previous anti-emissions legislation in a new piece of legislation that is expected to prevent thousands of deaths in the bloc every year. Environmentalists however say they were disappointed that the final compromise amongst EU member states was considerably weaker than what had originally been proposed. Targeting heavy industry, oil refineries and power plants, the deal agreed by ministers from the different member states tightens sulphur and nitrogen emissions as well as the release of dust particles, asbestos and heavy metals into the environment. Installations must meet the fresh emissions standards set by the member states by 2016, although countries may choose to apply the restrictions as late as the end of 2020. The pollution curbs are expected to prevent 13,000 premature deaths annually that are related to industrial emissions, saving healthcare systems an estimated EUR 7-28 billion.
Source: EUObserver.com (26.06.2009)

Metals market perked up, copper and aluminium go up Investments in copper appeared profitable even amid a global financial crisis. Despite the breakdown in the end of last year, prices of the ‘red gold’ go straight up. Prices of copper on the London Metals Exchange have increased 68 percent for just half a year and are currently at about USD 5000 per ton. For a comparison, prices hit the bottom in end 2008 to USD 2800 per ton, throwing producers and traders into horror. The first revival signs came from China, which started filling up its State reserve with metals. Trade was expected to ahlt again after the operation. Speculations at the exchange kept going, however, and prices keep climbing. Bulgaria is not isolated from those processes. Copper plant in Pirdop, part of the European giant Aurubis, purchase copper scrap at full speed. Sofia Med is also acting actively on the market. The two companies became the light in the end of the tunnel for a lot of the scrap traders. They managed to offset the big slump in demand for metal scrap and thus, the expected crash down of the sector did not happen. It appears that only 10-15 percent of the scrap collecting yards have gone bankrupt due to the crisis, said the head of Bulgarian Association of Recycling – Borislav Malinov. Big companies, which process and excport metal scrap keep on their operations. Aluminium is the other backbone of the companies. Revival of the auto industry lead to higher demand for this strategic metal, which affected the operations of the Bulgarian smelters as well, Malinov said. Aluminium price at the moment is about USD 1600 per ton and rising. In this light, demand for ferrous metals is still weak. However, there is hope as well. In the last few weeks Stomana Industry SA, the biggest consumer of ferrous scrap, has increased the purchase prices by BGN 20 per ton to about BGN 280 per ton. Market would perk up further in case Kremikovtzi restarts and purchases resources like before, experts said. Currently, there is balance between demand and supply on the ferrous metals market, although the traded volumes are much smaller. Prices, however, are not likely to reach the BGN 800 per ton levels in recent years, according to estiamtes of experts.
Source: Trud (29.06.2009)

Mital and Zahariev look at Kremikovtzi again Two exowners of kremikovtzi – Valentin Zahariev and Pramod Mittal, are trying to join the game for the plant once again. According to rumours at the plant, their teams are preparing a joint recovery program, which is to be presented today. At 05:00 p.m. Monday is the deadline for application of recovery plans, presented by creditors, at the Sofia City Court. Bondhodlers also prepare such a program as their experts spent the last month at the steelmaker. They have trsuted four specialists in finance and metallurgy to evaluate the possibility for recovery of Kremikovtzi and even the restart of the coke chemical mill. In order to approve the document, however, it has to receive at least 50 percent of the votes in its favor at the next general creditors meeting. The chances for the State to stand behind bondholders’ plan are pretty good, said syndicate officials. Head of Podkrepa labor union at Kremikovtzi, Lyudmil Pavlov, said that they have demanded the plans to be also shown to the workers of the plant. The program is expected to be applied in court today by the assignee in bankruptcy – Tsvetan Bankov.
Source: Standart (29.06.2009)

China's iron ore discovery may hit India's exports More than half of India's exports to China are iron ore. Beijing is also heavily dependent on supplies from Australia, Japan and South Korea to feed its high speed industrial growth. But the situation may change dramatically in future with Chinese geologists discovering Asia's largest iron ore deposit in northwest China. The Bureau of Geology and Mineral Resources Exploration in Liaoning Province has announced it has found an iron ore deposit with an estimated reserve of more than 3 billion tonnes. It will take some time before any of the ores is actually mined but it is good news for the planners in the National Development and Reform Commission in Beijing, which maps the long-term trajectory of development. The iron content in the ores, which is an important aspect for the steel industry, ranges between 25% and 62%. Going by its current level of usage, the deposit is enough to satisfy China's requirement of iron ore for 25 years, sources said. The province has yielded good quantities of iron ore in the past. (Times of India)
Source: Other (29.06.2009)

Alcomet capitalizes 2008 profit Alcomet JSC – Shoumen will not distribute dividends from last year’s profit of BGN 1.116 mln, the general shareholders meeting of the company decided. The Shoumen-based aluminium producer will capitalize the whole reported profit. In the first three months of 2009 Alcomet reported net sales income of BGN 38.3 mln, which 33 percent drop on annual basis. The company also reported a loss of BGN 1.53 mln as compared to a profit of BGN 1.17 mln in the first quarter 2008.
Source: Pari (30.06.2009)

The assignee in bankruptcy applied a recovery plan for Kremikovtzi Capital of Kremikovtzi JSC will be increased, and private creditors in the plant will receive property for their debts. This is included in the recovery plan, applied by the assignee in bankruptcy Tsvetan Bankov at the Sofia City Court. The program, which is to revive the plant, has been coordinated with the operative management and with the bondholders. This means that there should be talks for extending about BGN 100 mln. NEK is waiting for a proposal. Bulgargaz said that it plans to sell its debt. Kremikovtzi owes the two state-owned companies about BGN 250 mln. The matter with the so called ‘state aid’ of BGN 700 mln is still pending. Currently its recuperation is appealed in court. Creditors hope that this debt would drop off. However, this would mean that we do not follow the European legislation, said deputy minister Nina Radeva. According to the Trade Register, the recovery plan should be discussed at a general creditors meeting and its implementation should start if accepted. The plan includes an overhaul of the steelmaker. The necessary funds would come from the saleof the carbon dioxide emission allowances, which are due to the plant but are not used.
Source: Trud (30.06.2009)

2500 keep their jobs at Kremikovtzi About 2500 people will keep their jobs at Kremikovtzi, according to the recovery plan for the plant. It was applied in court by the assignee in bankruptcy Tsvetan bankov and was prepared by a team of experts, hired by the bondholders, and the operative management. The plan includes increasing the monthly production from 25,000 tons to 250,000 tons in 18 months, Bankov said. He did not disclose any financial details of the plan. The creditors are planned to become shareholders of Kremikovtzi.
Source: Standart (01.07.2009)

Iron ore talks go into extra time Though the annual iron ore pricing negotiations appears to be delayed as both sides are in no mood to back off from their respective stances, China's steel industry does not seem to be too perturbed by the fact. China's talks with the three major miners are still going on and it is still insisting on a 40 percent price cut from last year's price, Chen Xianwen, director of the China Iron and Steel Association's market department. But he declined to disclose any progress or China's schedule for the talks. Rio Tinto, the largest supplier, also seem to be in no mood to concede further ground than the one-third price cut it agreed with Japan and South Korea. The end of June is usually the deadline for annual iron ore negotiations and buyers and sellers will have to trade on spot market from July if no agreement is reached. Although China has become the only major importer left without signing agreements with any international miners, insiders said a last-minute deal is unlikely to materialize. (China Daily)
Source: Other (01.07.2009)

OTzK General Meeting did not Vote Assets Purchase The general shareholders meeting of Lead and Zinc Complex - Kurdzhali (OTzK) did not vote the item of the agenda for the opinion of the shareholders on purchase of assets. The chair of the meeting presented to the shareholders a letter by Financial Supervision Commission, according to which there is a decision for issuing an individual administrative act to the members of the Board of Directors for implementation of coercive administrative measure. The watchdog forced the company to offer the meeting not to vote on the item. Plans were for shareholders to vote on the acquisition of a share in Gorubso-Madan JSC by OTzK. Vendor on the deal was planned to be Intertrust Holding JSC, owner of 25 percent of OTzK.
Source: profit.bg (02.07.2009)

Kremikovtzi creditors to meet in September The Court is expected to send back the recovery plan for Kremikovtzi in order to fill in the whole list of creditors and to prepare an exact evaluation of the debt, said Tsvetan Bankov, assignee in bankruptcy. The plan was applied in Sofia City Court on June 29. This is the first time that an option for capitalization of the debt is offered in Bulgaria, Bankov added. According to people familiar with the trade procedures, in the end of August or in September a meeting of all creditors would be held. After the meeting, the procedure for capitalization of the debt of the ailing steelmaker would be started. For the moment the number of creditors is 450. There are foreign juridical entities among them. The process of informing them about the meeting, evaluation of their receivables by three experts, decision on the price of shares would take at least a month. Meanwhile the lay-offs at the plant continue. As to June 29, the employees on pay-roll at Kremikovtzi were 3928. The reason for the lay-offs is the crisis in the sector, Kremikovtzi said. The impossibility to provide work and to sell the output at good price is the reason for the discharge of about 1000 workers.
Source: profit.bg (02.07.2009)

Bulgargaz denied a share in Kremikovtzi Bulgargaz will categorically deny the offer for swapping the unpaid gas bills for acquisition of part of the plant’s assets. ‘We do not need shares in a losing company, we need fresh funds. Without it, the whole natural gas supply system for the country is at risk’, said the executive of Bulgargaz - Dimitar Gogov. The first attempt of Bulgargaz to sell its Kremikovtzi debt, about BGN 106 mln, was unsuccessful. No candidate appeared before the deadline on June 30. ‘I want a meeting with the bondholders of Kremikovtzi. We have to decide whether to announce a new date for sale of the debts until mid next week’, Gogov added. He counts on becoming familiar with the recovery plan, applied by the assignee in bankruptcy – Tsvetan Bankov. However, one of the ideas of the plan is capitalization of the debts of Bulgargaz and NEK.
Source: Trud (02.07.2009)

Ukrainian steel production plummets 34%-39% in H1 Ukraine's steel industry reduced finished roll output 34% year-on-year in January-June to 12.354 million tonnes. Crude steel production plummeted 39% to 13.615 million tonnes and pig iron fell 35% to 11.976 million tonnes. The country produced 728,000 tonnes of steel pipes, down 43% year-on-year. Iron ore concentrate production fell 27% to 23.577 million tonnes; prepared iron ore fell 31% to 25.543 million tonnes, including pellets - 22% to 8.985 million tonnes and sinter ore - 35% to 16.558 million tonnes; and crude iron ore - 30% to 28.29 million tonnes. Ukrainian coke production fell 26% to 8.28 million tonnes. Metalware production fell 50% to 99,000 tonnes. Scrap deliveries to Ukrainian steel mills were down 45% from January-June last year to 1.926 million tonnes. (Kyiv Post)
Source: Other (02.07.2009)

European steel demand seen rising next year European demand for steel, after shrinking by a third this year, should rise about 14 percent in 2010 as an inventory draw-down by steel users comes to an end, the European Confederation of Iron and Steel Industries (Eurofer) said. "In 2010 the stock cycle reversing to slightly positive will result in apparent steel consumption growing by almost 14 percent," the agency said in a statement. Apparent steel consumption is determined by subtracting steel exports from domestic production and imports. The current economic downturn and de-stocking by such steel-using sectors as construction and auto manufacturing has eroded steel consumption and will continue to do so in the third quarter, according to Eurofer. The confederation for this year is forecasting a drop in apparent steel consumption of nearly 33 percent compared with 2008. Consumption was down 43 percent in the first six months. But the federation said that beginning in the fourth quarter, the market should begin to show a slight rebound "as the negative effect of the stock cycle begins to ease." "We finally see a little light at the end of the tunnel," said Eurofer director general Gordon Moffat. (AFP)
Source: Other (03.07.2009)

Arcelor-Mittal to re-open furnace in Belgium plant Steelmaker Arcelor-Mittal would re-open the second blast furnace at its plant in Ghent, Belgium, in August. The furnace was closed down in April as a result of falling demand of steel worldwide due to the current economic crisis. With stocks at Arcelor's Ghent plant having largely been used up, the company decided that it was time to step up production at the site. The re-opening of the blast furnace will mean that many of the workers that were laid off will be able to return to work. However, the CEO at Arcelor-Mittel Ghent, Marc Vereecke, said that "this doesn't mean that we will see a return to last year's high demand. Demand will remain quite low for the rest of the year." (Economic Times)
Source: Other (06.07.2009)

Rio Tinto offloads Alcan unit for $1.2 bln Mining giant Rio Tinto has announced the 1.2 billion US dollar sale of Alcan's American food packaging arm to US firm Bemis as it offloads assets to pay off its big debts. The Anglo-American miner said it would receive cash and up to 200 million dollars in Bemis shares under the deal for Alcan Food Americas, which is still subject to regulatory approval. Rio borrowed heavily to fund its 38.1 billion US dollar takeover of Canadian aluminium group Alcan in 2007 and is selling non-core assets to reduce its debt burden. Last week, Rio also confirmed a huge take-up of its 15.2 billion US dollar rights issue, the fifth largest in history, allowing it to further slash its debt. (AFP)
Source: Other (06.07.2009)

Four Rio Tinto staff detained in China Four employees of Rio Tinto, the Anglo-Australian mining group, have been detained in China without explanation, raising tensions as the company is locked in tough negotiations over iron ore prices. It is highly unusual for staff of a large foreign company to be detained in China. The four workers, reported to be members of Rio’s iron ore sales team, were held for questioning. The company said in a statement that it was “concerned about the employees’ wellbeing and is doing everything possible to help them and support their families”. The miner has been heavily criticised in China following its withdrawal from a planned $19.5bn investment by Chinalco, the state-owned aluminium company. Along with other international mining groups, Rio is also in the middle of talks over Chinese iron ore contracts for 2009-10. Rio gave no details of the Chinese employees’ nationality, or of their positions at the company. The four worked in Rio’s Shanghai office, one of the company’s main centres in China and its chief base in the country for iron ore sales and marketing. Canberra is demanding urgent consular access. Shan Shanghua, secretary general of CISA and the organisation’s lead negotiator in the iron ore talks, could not be reached for comment. (FT)
Source: Other (08.07.2009)

Alcoa's quarterly loss smaller than expected Alcoa Inc posted a third consecutive quarterly loss, but cost cuts helped the largest U.S. aluminum maker beat Wall Street estimates by a large margin, sending its stock higher. Chief Executive Officer Klaus Kleinfeld later told analysts there were signs that weak demand for aluminum - which has prompted production cuts and plummeting metals prices in the last nine months - might be easing. "We still have challenging global markets, but there are some pockets of growth," he said. China will be a near-term importer of aluminum, but Beijing's stimulus programs for its own industry will eventually change the picture. "We don't expect imports (to China) to go on forever," he added. Alcoa, like other metals makers, has pared back operations and cut jobs in the face of weak prices as the poor global economy cut demand from the construction, electronics and auto sectors. (Reuters)
Source: Reuters (09.07.2009)

Shandong aluminum hub migrates to coast as logistic costs rise Rising logistics costs are spurring Shandong's aluminum industry to increasingly shift operations towards the coast, industry sources said. “Building new aluminum processing plants along Shandong's coast can help producers save greatly in logistical costs as they can buy materials from suppliers in the area," a analyst with state-run metals information provider Beijing Antaike said. A Galaxy Securities aluminum analyst agreed. "The cost of shipping bauxite from Australia to China has hit $14/mt, from $3-4/mt in late 2008, so it is inevitable aluminum plants will set up bases nearer the coast to trim costs," the source said. Projects planned near Shandong's port city of Qingdao include a 150,000 mt/year high-precision aluminum foil plant by Loften Aluminium Foil Co. and a $878 million alumina plant by the Aluminum Corp. of China, or Chalco, the capacity of which has not been disclosed. (Platts)
Source: Other (10.07.2009)

Australia to gain access to Rio Tinto 'spy' in China Australia was to gain its first access to a top mining executive accused of spying in China, as Prime Minister Kevin Rudd rejected calls to intervene in the highly sensitive case. The Mandarin-speaking Rudd stressed the need for caution in the arrest of senior Rio Tinto employee Stern Hu, which is testing one of Australia's most important diplomatic and trade relationships. Australian officials were set to meet Hu in Shanghai, five days after his arrest by China's anti-spy agency along with three Chinese colleagues. China said it has evidence the four stole state secrets and caused "huge losses" to its economy and security. Foreign Minister Stephen Smith earlier said he had seen no suggestion that Hu's detention was linked to Rio's recent dealings with China. (AFP)
Source: Other (10.07.2009)

Saudi, UAE steel imports to drop in ’09 Steel imports to Saudi Arabia and UAE are expected to drop dramatically this year as the two Arab countries’ local industries come closer to meeting demand. A decline in demand for steel as a construction boom in the Gulf came to a halt was also expected to hit imports of the metal as the global financial crisis continued to weigh on the property sector. “In a few years Saudi will not have to import any steel,” said Khaled Suleiman, an undersecretary at Saudi Arabia’s Ministry of Trade and Industry. Last year the kingdom imported just under 1mn tonnes of steel while demand for steel is expected to drop to 5.1mn tonnes from 7.2mn in 2008. There are no official bodies in the Gulf region that publish monthly statistics on steel supply and demand levels, and the majority of data is collected from traders in the sector. (Reuters)
Source: Reuters (13.07.2009)

China Metallurgical Group to invest in Pakistan Steel Mills China Metallurgical Group Corporation is planning a USD 2.2 billion investment for the expansion and revamping of Pakistan Steel Mills. A delegation of MCC met with the Federal Minister for Industries and Production on this July 16th for the meeting of this investment. At the Phase I of the expansion project, MCC will build a new plant, a cost of USD 1.2 billion and USD 2 million tonnes of steel production capacity annually within 2 years. At the Phase II, MCC will revamp and modernize the existing PSM plant. The Phase II will take another 2 years to complete and would cost around USD 1 billion and add another 1 million steel output a year. The minister said that they are very interested in MCC’s proposals and will study the proposal in deep and will take a final decision on this project very soon. (Steel Guru)
Source: Other (15.07.2009)

Rio Tinto moves iron, steel staff out of China Rio Tinto Ltd/Plc has evacuated staff in China involved in research of the iron ore and steel industry in response to the detention of some of its iron ore traders by state authorities. The unsourced report from Shanghai also said other foreign groups were moving employees out of China until conditions there become more certain. A Rio Tinto spokesman in Melbourne, Ian Head, said he could not immediately comment on the report, which said the unidentified number of staff were moved out on Wednesday. Stern Hu, Rio Tinto's head of iron ore marketing in China, and three other members of the Shanghai-based iron ore team were detained in early July on suspicion of stealing state secrets. Hu, a Chinese-born Australian citizen, was accused of obtaining and passing on the Chinese industry's negotiating position. (Reuters)
Source: Reuters (16.07.2009)

200 workers of Port-Bourgas laid-off Between 100 and 200 workers at Port Bourgas would be laid-off. The information was announced by the chairman– Argir Boyadzhiev. As to this moment the workers at the port are 1350. The move would allow higher salaries for the rest of the personnel, Boyadzhiev said. Port Bourgas is still under pressure after the closure of Kremikovtzi. However, the ore supplies for the plant of ArcelorMittal in Galat would pass through the port.
Source: Standart (17.07.2009)

Nabucco gas pipeline to propel steel pipes supply competition The Nabucco Gas Pipeline, which will run from Azerbaijan in the initial stage but the intention is to extend spokes to Turkmenistan, Kazakhstan, Iraq and perhaps Iran to double the capacity, would spur competition among steel pipe producers . The project is being built by a consortium from Austria, Hungary, Bulgaria, Romania and Turkey. It aims to be in service by 2014 with an initial target of 31 billion cubic meters per year, equal to a quarter of current supply from Russia’s Gazprom. The 2,000 mile pipeline will not only provide lucrative construction projects but will represent a sizable steel demand in its own right. If Nabucco is designed with no more than the Blue Stream project this would require nearly 3.4 million tonnes of steel pipe, plus pumping stations, large amounts of sacrificial anodes and associated metals. Nabucco’s larger diameter and greater pressure also requires more sophisticated steel alloys probably requiring higher molybdenum content than the Blue Stream’s 500 miles. With major steel producers in the area there will be intense competition to supply. (Metal Miner)
Source: Other (17.07.2009)

Posco to Buy Vietnam Stainless Posco, South Korea’s largest steelmaker, will buy a 90 percent stake in Vietnam’s Asia Stainless Corp. and build a plant in India after this week forecasting a demand recovery in the second half. The board of directors approved buying Asia Stainless, known as ASC, the Pohang-based company said without providing financial details on the purchase or the cost of the Indian plant. Posco raised its 2009 output target on July 13, signaling the worst of the global slump in demand may be over. Demand for cold-rolled stainless steel in Vietnam was 110,000 metric tons last year while supply was 28,000 tons, Posco said. (Bloomberg)
Source: Other (17.07.2009)

Kremikotszi's debts can be transformed The evaluation of Kremikovtzi steel plant assets will be ready this week, the syndic of the mill Tsvetan Bankov announced. He invited the creditors to capitalise the debts and the term for this is one month. The offer for the transfer of the debts into a share-holding participation is not valid only for the public credits to the National Revenue Agency, National Insurance Institute and the health insurance company.
Source: Pari (20.07.2009)

Kremikovtzi creditors invited to help themselves with stocks The court-appointed receiver for Bulgaria’s struggling steel mill Kremikovtzi has invited creditors to say whether they would convert their claims into equity capital as proposed by the plan’s recovery plan submitted in court. Kremikovtzi was declared insolvent in June 2008. The invitation, which is posted on the mill’s website, targets all creditors with approved claims except for institutions seeking to collect public receivables such as the National Social Security Institute (NSSI). Under local statutory rules, they are eligible for a special payments mechanism to ensure optimum protection in compliance with the Taxation and Social Security Procedure Code. Their claims will be entered into the liabilities of the revitalised company and will be paid out over the next years. The creditors who accept the proposal to become shareholders in the debt-ridden plant should notify in writing of their decision within one month. On June 12 Kremikovtzi’s creditors got together for their second meeting to vote on a procedure to assess the company’s assets and their claims. Highest on the priority list will be secured claims such as bonds, which will be paid from the proceeds of a possible sale of the pledged assets. Other claims such as those to suppliers will be attached a lower value. Thus secured creditors could receive nominal participation in the company’s capital that matches their claim, whereas non-secured creditors could acquire shares with a smaller face value than their claims. Experts close to the procedure said that non-secured creditors that refuse to convert their claims into shares are very likely to be left empty-handed. The proposal will be put to the vote at the third creditors’ meeting scheduled to take place in October. Investment banker Pravin Banker, a consultant for Kremikovtzi’s bondholders and the largest private creditor in the company, said that once the claims have been converted into capital the company should seek flotation on the international capital markets. One viable option is double listing on the Vienna and London stock exchanges, according to Banker, whose company Global Finance Network specialises in financial restructuring. Going public could help Kremikovtzi raise capital to implement investments in eco capacities and technological makeover after the crisis has died down. The creditors, on their part, will be able to dispose of the shares they will acquire from the conversion any time. Kremikovtzi is listed on the Bulgarian Stock Exchange (BSE), but has not submitted financial reports for a year and a half.
Source: Dnevnik (20.07.2009)

Copper Posts Biggest Weekly Gain in Four Months Copper futures rose, capping the biggest weekly gain in four months. The reason is U.S. construction of single-family homes jumped by the most since 2004. U.S. housing starts rose 3.6 percent in June from May to an annual rate of 582,000, the highest level since November. Copper futures for September jumped 1.4 percent, to $2.423 a pound (1 pound = 453,6 grames) on the Comex division of the New York Mercantile Exchange. This week, the metal gained 9.6 percent, the most since early March. Construction companies are among the biggest consumers of copper and the price of the metal is highly sensitive towards the news from the construction business.
Source: investor.bg (20.07.2009)

Orissa mega steel plants behind schedule 11 mega steel projects that were to be built in India over the last 5 years are going behind schedule and many like the project proposed by South Korean giant POSCO and ArcelorMittal are yet to take off. The state government had signed MoUs with 49 companies for setting up steel plants, with 11 of them to be built at an investment of INR 1,73,771 crore with a combined capacity of 57.10 million tonne per annum. Some of these projects also included power plants with an installed capacity of 3,115 MW. Official sources said “But so far the total investment made by a few of these companies amounted to INR 6612.99 crore contributing only INR 29.50 crore to the state exchequer and INR 43.78 crore to the Centre towards taxes.” (Press Trust of India)
Source: Other (20.07.2009)

Tata Steel Said to Plan $500 Million Sale of Shares Tata Steel Ltd., India’s biggest steelmaker, plans to raise about $500 million selling shares to international investors. The sale will be arranged by Citigroup Inc. Tata spokesman Sanjay Choudhry declined to comment. Tata will seek to tap overseas investors after Sterlite Industries (India) Ltd., the nation’s biggest copper producer, last week raised $1.5 billion from a sale of shares in the U.S. Tata became the world’s sixth-biggest steelmaker after buying Corus in 2007. (Bloomberg)
Source: Other (20.07.2009)

Radomir Metal Industries to offload a further 100 staff Radomir Metal Industries, the largest factory in the Radomir Municipality, is poised to make a further100 people redundant, according to a company statement by executive director Lyudmil Alexandrov. "The measure is in light of the deteriorating economic crisis. The redundancies will encompass all branches and sectors of the factory," he said. This is the second time Radomir Metal Industries cuts staff, following the 600 workers let go in March 2009. More than 60 per cent of the staff of the company are currently employed part time. Towards the end of August, an additional 10 per cent of employees will be on reduced working hours. "Our traditional clients have been silent, we are getting no orders," said Alexandrov. "The factory is surviving because of small-scale orders from South East Asia – we have no European clients whatsoever," he said. Production output has been slashed by 3.5 times as opposed to the first two quarters in 2009. Before the crisis, Radomir Metal Industries employed more than 1100 people, and more than 95 per cent of production was meant for export.
Source: investor.bg (22.07.2009)

World steel output down 21 pct in first 6 months World steel output plunged 21.3 percent in the first six months of 2009 from a year ago. Chinese and Indian steel makers were the only major producers to increase output in the first half, the World Steel Association said. China, up 1.2 percent, makes more steel than any other nation. India expanded its steel production by 1.3 percent. North American output almost halved while European output was down 43.2 percent. Asian steel makers-which make nearly two thirds of world steel-were down far less, by 7.8 percent. The pace of this contraction slowed down in June, when world output fell 16 percent from the same month last year. Global steel output fell last year after climbing for six years on higher demand for the metal that supports buildings and is turned into cars and machinery.
Source: profit.bg (22.07.2009)

Radomir Metal Industries reduces staff Another 100 people will be released from Radomir Metal Industries. In March 600 workers from the company lost their job and 60% of those that remained work part time. Before the crisis the plant offered job to 1,100 people. Production volume dropped 3.5-fold for a year.
Source: Pari (22.07.2009)

BHP seeking up to AUD 1 billion for Ravensthorpe nickel mine BHP Billiton Limited is asking for as much as AUD 1 billion for its idled Ravensthorpe nickel mine in western Australia. BHP had made initial approaches to potential buyers and was seeking between AUD 800 million and AUD 1 billion, but added that was well above the valuation put on the mine by most analysts. BHP spent more than AUD 2.2 billion developing Ravensthorpe but the mine operated for little more than a year before being closed down in January amid weak global nickel prices. Earlier this month, BHP announced the sale of its Yabulu nickel refinery in northeast Queensland State, which had processed nickel ore from Ravensthorpe, taking a write down of AUD 675 million.
Source: Reuters (22.07.2009)

Radomir Metal invests EUR 3.5 million Radomir Metal Industries cut off 100 workers and reported a three-fold drop of production. Despite this, the company invested EUR 3.5 million in a unique machine from Germany, CEO Lyudmil Alexandrov said. The equipment is paid by 70% with funds from the reinvested profit. The new machine tool is a multi-functional lathe, produced by the Germany-based company Herkules. It can process details of up to 6 meters length, 1600 mm diameter and up to 50 tons of weight. The lathe has many functions, including control over cracks on the product. It will help the plant increase its capacity. Radomir Metal Industries has a scrap base, steel molding mill, press-forge mill. The addition to the equipment would allow completion of the production circle and reduction of the dependence on external companies. Radomir Metal Industries is the successor of two thirds of the ex communist-period giant based near the Radomir region village of Chervena Mogila. Currently the plant is hit by the outgoing economic crisis.
Source: Pari (23.07.2009)

Moody sees negative outlook for European steel industry Moody's Investors Service said that the outlook for the European steel industry is negative, reflecting weak demand that is not likely to improve until well into 2010, as well as depressed steel prices that are not likely to recover to levels required for appropriate long term returns in the near term. Moody's expects that the European steel industry will remain under pressure for the foreseeable future, but recognizes that the downturn may have finally bottomed out. Nevertheless, recovery is expected to be slow, since real demand for steel has declined by around 20% to 25%, lead times remain short and prices are expected to only marginally increase in the medium term. Although Moody's believes a further downturn, both in terms of steel prices and volumes, is unlikely, as prices and production have remained relatively unchanged for the past several months, steel prices are likely to remain depressed for several quarters due to overcapacity and the lack of an expected strong global economic recovery in the near term. (Platts)
Source: Other (23.07.2009)

Kremikovtzi expects the Borisov cabinet to support the plant’s debts capitalization Workers of Kremikovtzi expect the new government to support the capitalization of the plant’s debts, said deputy chairman of the Metalitzi federation at CITUB – Reneta Petrova. She said that all previous demands of the employees in the biggest metallurgical plant in Bulgaria would be updated and presented to the new government. The unions added that they would contact immediately the new minister of economy, energy and tourism – Traycho Traykov. We are at stand b, Petrova said. One of the demands made by the CITUB was for the adoption of a special decree by the Council of Ministers for early retirement of Kremikovtzi workers, who have 3-4 years until reaching the retirement age. The Tripple coalition denied the demand.
Source: Darik Radio (24.07.2009)

Kremikovtzi to seek its assets sold by Tomov The assignee in bankruptcy of Kremikovtzi Tsvetan Bankov will initiate a law offensive against the deals made by the ex-CEO Alexander Tomov. Revocation demands have been applied in court and the aim is to get back some of the assets, e.g. the tailing pond, sold at arguable prices in end 2007. Because of the sale of the tailing pond and of the hostel in Druzhba district, Alexander Tomov and some other ex-leaders of Kremikovtzi and CSKA football club were prosecuted for misappropriation (it was temporarily frozen due to the political immunity of Tomov during the elections). The rest of the assets would be more hard to ground the non-equal base of the deals and the lack of benefit for Kremikovtzi. Like many other cases these assets have been sold to companies that have resold them afterward, but an eventual success in court would freeze the next deals of the chain and the plant would get back their assets. The most easily attainable from a legal point of view seems the case with the tailing pond as its price have not even paid and under the indictment Alexander Tomov has committed document fraud, by declaring the price paid. In February last year, the trade unions alarmed that this deal actually helped Pramod Mittal to pay the acquisition of the football club CSKA by his previous owner Vasil Bozhkov. However, the pond went under the control of the Ukrainian businessman Konstantin Zhevago. It was pawned in his favor after Zhevago (then still billionaire) granted a loan to Pramod Mittal, but the companies of the Indian proved unable to handle the duties and the property was transferred. The former deputy Economic Minister Nina Radeva pointed out certain transactions as refutable in court and commented that it would be followed. When all accused the government that it "pressed" the Sofia City Court to declare the plant insolvent from the end of 2005, informal comments were that it could attack a large number of unprofitable transactions. Other assets, sold during the head was Alexander Tomov, are the Prokatna station, which links Kremikovtzi with the national railway infrastructure, holiday homes and non-key assets near the plant itself. At the same time Alexander Tomov explained that in this way the plant would be exempted from extrinsic operations and assets that just creating costs. With EUR 19 million of this money was paid the last interest coupon of the bonds, guaranteed by Kremikovtzi in November 2007. The following interest payment was to be made in June, but there was no funds and the issue was declared non-served.
Source: Dnevnik (27.07.2009)

China tightening control over steel industry China's stolen secrets case against an Australian working for Rio Tinto Ltd. may have more to do with Beijing's push to tighten control over its huge steel industry than trying to dampen industrial espionage. Chinese officials have complained for years that steel companies paid too much for foreign iron ore, failing to translate China's position as the world's biggest steel producer into clout at the bargaining table. A state-sanctioned industry group was brought in to fix that by taking over price talks. But the China Iron & Steel Association was tripped up, because its bottom line was leaked to Rio. "The arrest of the Rio Tinto employees earlier this month appears to be the latest salvo in an ongoing battle between CISA and the major Chinese steel mills". The battle reflects the clash between the communist government's insistence on controlling strategic industries and the commercial priorities of China's state-owned companies. (Associated Press)
Source: Other (27.07.2009)

ArcelorMittal chose Burgas for processing its deliveries The largest world steelmaker ArcelorMittal has chosen the port of Burgas with the supply of iron ore and coal for its plants in Romania. The information was confirmed by the Director of the Bulgarian port Argir Boyadzhiev. He said that there is a signed two-year contract with the international company, under which materials will be transferred to the port by large transport vessels to smaller ones. They will in turn transport the raw materials through the Ukrainian canal and hence on the Danube to the four factories of ArcelorMittal in Romania. The decision on the choice of Bourgas port was defined as unfair by the National Administration Seaports, Navigable Channel Administration and Komvex - the largest terminal for processing raw materials in the Black Sea, all based in Constanta, Romania. Managers of the three companies addressed the Competition Council in Romania and the Ministry of Economy and Transport. In a general press release they say that the reality contradicts to all that had been stated by Thierry Le Gal (CEO of the southeastern unit of ArcelorMittal). ArcelorMittal produced about 11 percent of the steel in the world before the crisis and the recession shrank the demand. In Romania ArcelorMittal has four plant - in Galati, Roman, Iasi and Hunedoara.
Source: Dnevnik (29.07.2009)

Asarel Medet received European funds for a stage of tech modernization A funding of BGN 5 mln was won by a project of Asarel Medet JSC, which is to be implemented under Operative Program Development of the Competitiveness of the Bulgarian Economy. The total stage of the project for technological modernization of the company operations is BGN 12 mln as the rest is invested by Asarel Medet. Within 18 months the ore preparation process in Fine Crushing mill of the enrichment plant Asarel will be optimized, a new float-gravity process and a highest class integrated ERP control system will also be introduced, the company said. This would allow the realization of the strategic goal of Asarel Medet – providing maximum usage of the mineral resources and effectiveness of the operations through low cost and high quality of the produced copper. This is the second project of the company that wins funding under the operative programs. Recently the project ‘Managers are not born, they are made’ was finished. It received funding under the OP Development of the Human Resources and secured a series of trainings for 105 managers and specialists.
Source: Dnevnik (29.07.2009)

EU sets permanent tax on Chinese steel pipes The European Union will apply a five-year duty on imports of Chinese steel pipes in a move to try to protect EU steel manufacturers. European steel producers including the world's biggest, ArcelorMittal have accused Chinese steel companies of having an unfair advantage because the Chinese government restricts exports of raw materials, which drives down manufacturing costs, and subsidises them. The decision could mark increased protectionism in the EU as recession hits and its trade deficit with China widens. The European producers appealed to Brussels earlier this year to impose extra duties. In April, duties ranging between 15 to 25 per cent were placed on imports of“certain seamless pipes and tubes of iron or steel”, mainly used in construction. Permanent or definitive EU trade duties such as those voted in yesterday usually last for five years. Officials said these duties were expected to range up to around 40 per cent, depending on the product. They will come into force once their decision is published in the EU’s Official Journal. (Times Online)
Source: Other (29.07.2009)

Metallurgy Workers in Bulgaria's Kardzhali Start Strike over Salary Cuts About 300 workers in the Lead and Zinc Plant in Bulgaria's Kardzhali started a spontaneous strike on Wednesday. The workers stopped work, and told the management they would not resume their activities until they got their delayed salaries, BGNES reported. The metallurgical workers have been disgruntled since last week when the management announced a plan to reduce their salaries by 20-30%. The factory CEO, Slaveya Stoyanova, claims the system included the introduction of production quotas, and promised additional payments to those workers who exceeded their quotas. The factory also introduces minimum production requirements of 1 900 tons for the Zinc plant and 2 000 tons for the Lead plant per month. She also said the July production fell down to 1 400 tons in total, which lead to the new anti-crisis program. The protesting workers said they had not been receiving their salaries regularly since October 2008, and disproved the managers' statement that the average salary was BGN 665; a machine engineer said his net salary was BGN 320. The workers are worried that the owner of the Lead and Zinc Factory wanted to "destroy it as he did with the steel mill Kremikovtzi". The owner of the Lead and Zinc Factory is Intertrust Holding chaired by Valentin Zahariev. BGNES reminds that in 1999 the Kostov government sold the steel mill Kremikovtzi to Zahariev for a token BGN 1 together with its debt. In 2005, Zahariev sold the plant to Indian billionaire Pramod Mittal for between EUR 100 M and EUR 200 M; three years later the largest Bulgarian steel maker was declared insolvent. In 2008, the Polish Magazine Wprost ranked Zahariev as the third richest Bulgarian with a fortune of USD 680 M. The Lead and Zinc Factory is the largest employer in the Kardzhali District with over 700 workers.
Source: Darik Radio (30.07.2009)

Sales of Chugunoleene fell 3-fold The sharp cut of operations has helped Chugunoleene - Ihtiman to reduce the loss as to the end of June. In the end of the half-year the company reported a loss of BGN 2.91 million compared to BGN 3.92 million a year earlier. According to business report, the reasons are the economic crisis and the reduced orders. The average production of iron castings halved as compared to last year, to about 1000 tons per month. Sales fell by nearly a third – down to BGN 10 million.. Operating costs also dropped - from BGN 31.5 million in the first six months of last year to BGN 12.9 million in 2009. The most noticeable is the decrease in the expenses for materials, external services and fees. In recent months the company made serious cuts in staff and in July and August almost all workers were put on unpaid leave.
Source: Dnevnik (30.07.2009)

EU help for Assarel Medet Project of Assarel Medet AD won a BGN 5 million non-repayable aid under the competitiveness operative programme. The funding will be used for technological modernisation of the mining complex and will help reach the strategic goal which is maximum utilisation of raw materials, the executive director Lachezar Tsotsorkov said. The whole project amounts to BGN 12.126 million and should be ready for 18 months.
Source: Pari (30.07.2009)

Imported Scrap Steel to Rescue Indian Steel Manufacturers from Recession RNCOS in its new research report, "Indian Steel Industry Outlook to 2012", states that as survival chances are brighter with low input cost, the Indian steel manufactures will focus on importing more scrap steel. Traditionally, India has been one of the major importers of carbon steel finished products. In 2007-08, carbon steel finished products contributed around two third of the overall imported steel products followed by scrap steel. The total volume of imported scrap steel increased significantly by 18% during 2007-08 compared to a year ago. However, the steel consumption in the Indian market is severely hampered by the ongoing global recession that washed out many investment plans in various industries. In fact, many steel manufacturers are facing the risk of bankruptcy due to declining consumption and rising stocks at warehouses. (24-7 Press Release)
Source: Other (31.07.2009)

Zinc, lead seeing big stock buildups on output restarts Zinc and lead are both seeing mounting buildups in London Metal Exchange warehouses lately, said analysts from UK-based Barclays Capital, adding there are likely more inventory add-ons to come, which could derail the base metal's recent price rally. Zinc stocks swelled by another 15,000 mt, on the heels of an 8,000 mt increase earlier in the week. LME lead stocks grew by 3,900 mt this week. "We are concerned that this may reflect additional metal coming from restarts to a market where demand is still weak," the analysts said in a report, "and we suspect that more metal will be delivered on exchange." Barclays had predicted last month that zinc's price coup could have a downside, with China alone reportedly refiring 500,000 to 600,000 mt of idled capacity. "What we've seen for all of the base metals, not just zinc, is this very strong increase in prices, and there is the danger that it will encourage production restarts," Barclays analyst Gayle Berry said. (Platts)
Source: Other (31.07.2009)

OTzK net profit fell by 12 percent Lead-Zinc Complex JSC Kurdzhali (OTzK) reported a net profit for the first half of 2009 of BGN 1.679 million, representing a decrease of 12.5 percent compared to the net profit of BGN 1.9 million a year earlier. In the first quarter the company reported a profit increase of 20% to BGN 1.2 million, but in the second it fell by about 50 percent to BGN 447 thousand, as a result of which the half-year net financial result reported a decrease compared to the comparable period last year. Net sales income for the first half of 2009 amounted to BGN 53 million from BGN 80.3 million a year earlier. In the first six months last year, however, there are reported "other" revenues from sales amounting to BGN 11 million and the same item in the current period is BGN 1.7 million, leading to a greater decline in total sales of 34 percent. Usually in the article "other" of the "net sales income" of the income statement are recorded revenues, which have a one-time character. Revenue from sales only of production reduced by lower rate of 26 percent to BGN 51.3 million. The annual basis of decline in total sales in the second quarter is 37 percent to BGN 26.3 million at rate of decrease of 35 percent in the first quarter. In Q2 as to Q1 the sale do not change substantially. OTzK financial results are driven by changes in the prices of lead and zinc, which impact the level of sales the most.
Source: investor.bg (31.07.2009)

Alcomet reported smaller loss in the second quarter Alcomet JSC posted a loss for the period April-June of BGN 345 thous as compared to a loss of BGN 1.5 mln in the first quarter, according to the company report. In the second quarter last year the company reported a profit of over BGN 1 mln. ‘The main negative factor affecting the business since the first quarter of 2009 is the lower credit rating of Bulgaria, which led to higher caution during trade with our company by the foreign customers’, Alcomet said. ‘Fortunately the established name and good reputation of a reliable partner played an important role and allowed us to preserve the good trade conditions, reached before’, the company added. Sales income of the company in the second quarter dropped 30 percent on annual basis to BGN 40.3 mln. The annual rate of decrease slowed down as compared to the first quarter, when the decrease was 33 percent as to the January-March period of 2008. Alcomet reported a loss of BGN 1.9 mln in the first half of 2009 as compared to a profit of BGN 2.3 mln a year earlier. The net sales income of the company dropped 32 percent to BGN 78.5 mln.
Source: investor.bg (31.07.2009)

Japanese steel output to grow 30% this quarter Production of crude steel at Japan's five major blast-furnace steelmakers is expected to rise 30% during the July-September quarter. The total for the current quarter is expected to hit "some 18.3 million tons" in the quarter, marking the first uptick in four quarters, Japanese business daily Nikkei reported. Nippon Steel Corp. and other major steelmakers are ramping up output as demand from automakers and electronics firms recovers and exports to China and other Asian countries increase, the report said, with Nippon Steel alone to hike output by 40% during the three-month period. JFE Steel Corp., a unit of JFE Holdings Inc., plans to raise output 30%, while Sumitomo Metal Industries Ltd. expects a 20% increase, and Kobe Steel Ltd. and Nisshin Steel Co. will likely boost production more than 20% each. (MarketWatch)
Source: Other (03.08.2009)

Bulgaria metal industry deepens slide to 40% Jul’09 Metallurgical products sales in Bulgaria have crumbled by an average of 40% by the end of July from the same month of last year, said Anton Petrov, board chairman of the Bulgarian Association of the Metallurgical Industry (BAMI). “The situation in the different sectors across the metallurgical industry is different and its changing very dynamically,” he added. Some have seen their sales contract by between 4% and 6%, while elsewhere it tops out at a precipitous 40%. Imports and manufacture of base metals for the shipbuilding industry have been struck the hardest blow. Imports of metals and semi-manufactured products have seen a sharp decline in a sign that domestic producers are filling in the niche freed up by Turkey, Ukraine and Macedonia. “In a time of crisis, it is logical that domestic production should gain a competitive edge over foreign production,” Petrov explained. On a brighter note, manufacturers managed to preserve in the second quarter the positions they held in the first quarter. From April to June, the output of rolled products totalled 21.7 million tonnes, dropping by 40.8 million in the first three months of the year. Sales of steel and ferrous metals shrank by 19.2 million tonnes to 263.3 million, according to estimates by BAMI. Pernik-based steel mill Stomana Industry is currently operating at two-thirds of its full capacity, having shed around 400 jobs so far but planning no more cuts. Other companies, including Helios Metalurg and Promet Steel, have lowered production by around 30%. “Unfortunately, Bulgaria makes no more cast iron any more after the blast furnaces at steelmaker Kremikovtzi went idle and are not expected to be powered up,” BAMI explained. At the same time, Bulgaria’s newly-appointed minister of economy, energy and tourism, Traycho Traykov, said the country should distance itself from the Kremikovtzi issue as much as possible, saying it is a privately-owned company and the government should not meddle in its management. The distribution of gas emissions, power rates for industrial consumers and transport infrastructure are among the key issues that need to be addressed in order to boost the competitiveness of the sector, the minister said, adding that a modest recovery could be expected next spring.
Source: Dnevnik (04.08.2009)

Corus to bank on Tata Steel for raw material Tatas are on a rescue mission for Corus, its European subsidiary, which was acquired by Tatas for $12 billion in 2007. In an effort to help out Corus, Tata Steel, the world’s sixth largest steelmaker, will produce half the iron ore and coking coal, raw materials used to make steel, for Corus by the year 2012. This is an attempt to give a helping hand to the downturn-hit Corus to cut input costs and operate on higher profit margins like its Indian parent. Raw materials would come from Tatas’ mines in Mozambique, Canada, South Africa and Cote d’Ivoire. The mine in South Africa will start production by end of 2010, while the mines in Mozambique and Canada will be operational by 2011. From Cote d’Ivoire (also called Ivory Coast), Tatas require five to eight years for production to begin. Corus could save up to 60 per cent of input costs, translating into a cost reduction of about $120 a tonne of steel, if it could achieve full self-sufficiency in raw materials. (Commodity Online)
Source: Other (05.08.2009)

Mechel to take over management of Zlatoust steel mill Mechel will take over management of Zlatoust steel mill in a deal many say was driven more by political than economic considerations. A three way strategic partnership was agreed on by Estar Group, former owner of the plant, Mechel and the Chelyabinsk region which has been managing the mill since workers staged a hunger strike over unpaid wages. The nature of the partnership was not disclosed. The Chelyabinsk based Zlatoust plant suspended its production from late April until mid June because of a lack of orders. The plant filed for bankruptcy on May 27th but the case was rejected by the court. The plant ownership was uncertain until the local prosecutor’s office found in late June that it was owned by Mr Vadim Varshavsky State Duma Deputy who had previously denied ownership. (Moscow Times)
Source: Other (05.08.2009)

New ideas for Kremikovtzi The candidates for Kremikovtzi started declaring interest. Dozens of letters from creditors, wanting to turn their debt into shares, are sent to the assignee in bankruptcy Tsvetan Bankov. The deadline is August 17, when the 1-month period from applying the invitation to creditors in the Trade Register expires. As for the moment, however, the letters are only from the small creditors. The biggest – bondholders, state-owned Bulgargaz and NEK, are expected to apply close to the deadline. Kremikovtzi is an almost private company and the best choice for the State is to back off from it, said Minister of Economy, Energy and Tourism – Traycho Traykov. Next week PM Boyko Borisov and Traykov would meet with representatives of the bondholders in order to discuss further actions. After August 17, three experts assigned by the Registry Agency would determine the number of shares that each creditor would receive. After the final list is prepared, Court has to appoint a date for its approval by the creditors meetingMost probably the evaluation will take two weeks, Bankov said. The creditors meeting would take place in early September. The creditors would also have to vote for the recovery plan implementation. It includes the transormation of the debts into shares and funding through further loans or bond issues. After that the plant would have to find a strategic investor. The steelmaker keeps on producing steel from scrap. Kremikovtzi is supplied with natural gas and it pays regularly to Bulgargaz its bills. However, currently the workers receive only advance payments – for the months from March to June. They have not received salaries since december 2008.
Source: Standart (06.08.2009)

ArcelorMittal to continue mining coal in Siberia Transnational steel giant ArcelorMittal will continue mining coal in Siberia and will not lay off any miners. An agreement to this effect has been reached between the company and the regional government of Russia's coal mining region of Kemerovo in Western Siberia. According to the agreement, ArcelorMittal will invest in the modernisation of the Pervomaiskaya mines to keep it running in accordance with the local environmental and labour laws. And the local government for its part would ensure the sale of coal produced by ArcelorMittal. ArcelorMittal had planned to close the Pervomaiskaya coal complex and retire the miners. In response, the Kemerovo governor, Amana Tuleyev, had sent an angry telegram to promoter Laxmi Mittal to hand over the control of the mine to the government and warned that the license for the exploration and mining of a new prospective coal deposit would be cancelled. ArcelorMittal owns the Pervomaiskya mine in the town of Beryozovsky and Anzherskoye in Anzhero-Suzhensk in the Kemerovo region's coal basin. (Business Standard India)
Source: Other (06.08.2009)

Sofia hatches new plan about Kremikovtzi land plot If demolished, Bulgaria’s debt-saddled steelmaker Kremikovtzi could give way to a technology park at its site near Sofia, according to acting mayor Minko Gerdjikov. The plan calls for a facility using low-carbon technologies and giving job to scholars and experts. The idea to convert the pollution-belching factory for another purpose has been pushed for year by Sofia’s chief architect, Petar Dikov. He says the land plot could accommodate offices or skyscrapers and serve as the starting point for the capital’s business city. The proposed technology park will be modelled on Germany’s largest facility of this kind, located in Dortmund, which has replaced a metallurgical plant. An orange-painted blast furnace is all that is left from the factory to show it ever existed, Dikov explained. He called on the government to give the municipality a hand with putting the plan into practice by working out a legal means to acquire ownership on the site of the troubled mill. “Kremikovtzi is insolvent and faces piecemeal sale to settle its debts,” Dikov said, warning that if this scenario should unfold, the plant will turn into a rust-eaten corpse sprawled outside Sofia. The majority stake in the plant is currently in the hands of bondholders. Economy minister Traycho Traykov said earlier this week that the state could distance itself from the Kremikovtzi issue as it is a private company. But while he served as Sofia mayor, prime minister Boyko Borissov was adamant the plant should be torn down to make room for a business centre. He will get together with bondholders next week to discuss the mill’s fate. The municipal authorities will seek around EUR 50 million in European funding to develop the infrastructure around the future technology park, Gerdjikov said.
Source: Dnevnik (07.08.2009)

Kremikovtzi bondholders call for liquidation Some of the bondholders of Bulgaria's troubled steel mill Kremikovtzi want the company's business to be wound up, a bondholder speaking on condition of anonymity told Dnevnik. He said this view is held by investors holding almost a third of the issue's face value (EUR 325 million) the insolvent steelmaker must repay together with interest. In July, the company's court-appointed receiver, Tsvetan Bankov, put forward a rescue plan, which calls for converting the claims into shareholders' equity. The aim is to keep the firm and its assets in a working mode with a view to selling out when the crisis dies down and its value goes up. The plan follows a failure to attract a strategic investor or partner after the government last summer rejected a proposal aide Indian steel powerhouse Arcelor Mittal in acquiring the plant. The rescue plan got the backing of the committee of bondholders holding almost half of the issue's nominal value. Now investors are seeking to meet with the new government to secure the state's go-ahead too. Economy minister Traycho Traykov said prime minister Boyko Borissov will get together with bondholders' representatives to discuss the matter. But experts have branded the rescue plan as risky and hard to implement. They argue liquidation and sale of assets could fetch a larger amount that would cover a larger portion of the claims.
Source: Dnevnik (10.08.2009)

Govt to pen Kremikovtzi plan A working group will be formed to work out ways to lift ailing steelmaker Kremikovtzi out of the doldrums while protecting to the utmost the interests of the state, workers and bondholders, the government’s press office reported. The announcement comes after prime minister Boyko Borissov met up with representatives of the bondholders yesterday. In July receiver Tsvetan Bankov came up with a rescue plan that would see the claims converted into shareholders’ equity. The plan was designed to keep the firm and its assets in working mode and sell out when the economic headwinds have abated and their value has gone up. Last week bondholders opposed the rescue plan and urged for liquidation.
Source: Dnevnik (11.08.2009)

Rio Tinto 'spying' cost China $100 bln China's state secrets watchdog has accused Australian mining giant Rio Tinto of conducting up to six years of corporate espionage, costing the country 700 billion yuan (102 billion dollars). Rio Tinto allegedly stole state secrets to gain the upper hand in iron ore price talks and force China to pay what it says were excessive prices, according to a report published on a website run by the State Secrets Bureau. This amounted to "blackmail" costing more than 500 yuan for each of China's 1.3 billion people, wrote the report's author, Jiang Ruqin. "It also meant that China gave away more than 100 billion dollars, or around 10 percent of Australia's gross domestic product, for free to employers of the commercial spies," Jiang wrote. Chinese authorities detained Australian citizen Stern Hu and three other Shanghai-based Rio employees on July 5, accusing them of bribery and stealing state secrets during iron ore contract negotiations. (AFP)
Source: Other (11.08.2009)

China Copper Imports Drop for First Time in 6 Months China’s imports of copper and the metal’s products in July dropped for the first time in six months, declining from a record, after stockpiles increased in the world’s largest consumer. Imports slumped to 406,612 metric tons in July, the Beijing-based customs office said today. That’s 15 percent down from a record 477,217 tons in June. “It’s a long-anticipated drop and nothing really surprising,” Pang Jie, an analyst at Zhejiang Zhongda Futures Co., said. “We expect further declines over the rest of this year.” Importing copper began incurring losses from late May, as overseas prices climbed faster than those in China, Pang said, adding record shipments in June were orders made earlier in the year. (Bloomberg)
Source: Other (11.08.2009)

BHP Workers Threaten Strike at Escondida Amid Talks BHP Billiton Ltd. workers are threatening to strike at the world’s largest copper mine if the company doesn’t meet demands for a share of record profits. “We don’t see any alternative” to a strike at Chile’s Escondida, said Pedro Marin, president of Chile’s Mining Federation which represents 7,500 miners. The company is in talks with employees in Peru, he said. The current labor contract at Escondida is set to expire in December. Workers at the mine went on strike for almost a month in 2006 as they fought for a share of copper prices that rose 40 percent the previous year. A strike at Escondida, and Chile’s Spence mine, could disrupt as much as a quarter of Chile’s copper production. The country is the world’s largest producer. Workers at BHP’s Antamina mine in Peru are in negotiations with management after their contract expired last month, union secretary Francisco Marinas said in an interview. Miners at the Escondida and Spence copper mines in Chile will also negotiate new contracts between September and December. (Bloomberg)
Source: Other (13.08.2009)

Turkish chrome exports increase by 40% in July According to the statistics, exports of chrome ore in Turkey totaled 276,647 tons in July 2009, up by about 40 percent compared with last July. Russia which imported 5,050 tons of chrome ore in July and 63,003 tons during January-July, became the second biggest Turkish Chrome ore importer. In addition, Turkey exported 13,066 tons of ferrochrome in July, with most of this amount (12,852 tons) having been shipped to China. It's said that 55,472 tons of ferrochrome were exported during January-July; compared to the same period last year, the figure has risen 67 percent. (Yieh.com)
Source: Other (13.08.2009)

China reins in steel industry expansion China's Ministry of Industry and Information Technology (MIIT) Thursday announced a three-year moratorium on approvals of new expansion-related proposals in the iron and steel industry, as the government pledges to eliminate outdated capacity. MIIT Minister Li Yizhong said overcapacity in the steel industry was "the most evident" of all the industrial sectors, with this year's estimated total output capacity at 660 million tonnes, compared with estimated demand at 470 million tonnes. He called for steel mills to stop expansions for the next three years. Projects with total capacity of about 58 million tonnes already under construction would continue, he said. "If the trend goes down like this, the steel industry will come to a dead end," he said. Steel mills in Hebei Province would reduce their overall capacity from 120 million tonnes to 80 million tonnes annually over the next two to three years. Another move to step up elimination of outdated capacity was consolidation of the industry, he said. (Xinhua)
Source: Other (14.08.2009)

Creditors of Kremikovtsi does not want liquidation Most of the major creditors of the metallurgical plant Kremikovtsi now agree to a health plan and not to proceed to liquidation. The deadline for submission of application for transferring debts into assets expires at the beginning of next week. With more than BGN 2 billion obligations the steel plant has to return to the bondholders EUR 325 million plus interest. The second largest creditor is the state with almost BGN 900 million receivables, but currently some of them are challenged in court. That was why during the week a meeting between the assignee in bankruptcy Tsvetan Bankov, representatives of the bondholders and the Prime Minister Boyko Borisov, together with Minister of Finance and Economy was organized. Bankov explained that the three sides at the meeting had agreed that Kremikovtsi must continue to work, but in a normal economic environment, restructured and modernized, with production meeting the environmental standards. The final decision whether to accept the health plan or to eliminate the large steel plant will be taken after a meeting of the committee of creditors. It is expected to be held in early October this year after the Sofia City Court decided to call it. Before that the Registry Agency has two months to consider the received requests of creditors and who what part of the assets of the plant will receive. To be carried the recovery plan must be approved by more than half of creditors, said Bankov.
Source: econ.bg (14.08.2009)

The renewing of LZC will end in 3 years The new zinc workshop of Lead and Zinc Complex JSC (LZC) near Kardzhali should be ready by 2011, and the renewed production of lead will start as planned up to three years, announced by the Ministry of Environment and Water (MEW). The decision was taken after a meeting of Deputy Minister Evdokia Maneva and the management of the company. The ministry of Nona Karadzhova insisted on accelerating the company's investment program in order to stop the systematic air pollution over Kardzhali. There were no tangible decisions taken at the meeting , but we are definitely optimistic about resolving the problem," explained the owner of Intertrust Holding JSC Valentin Zahariev. Up to now the project was blocked because the company had no positive decision on the assessment of environmental impact by the MEW. Intertrust Holding set up a claim against MEW in the Supreme Administrative Court, which took decision in favor of the company. For its future investment in Kardzhali the company has certificate for first class investor. So far the company has invested over BGN 94 million in the project, explained Zahariev. Intertrust is to invest another BGN 50 million in zinc production and about BGN 80 million in lead production, which is the main pollutant of the plant. “By the end of August we will submit EIA for lead production in MEW and by September 10 for the zinc plant,” said Zahariev. Because of the pollution of Kardzhali and the region Bulgaria is threatened by penalty procedure from the EU. Last year for failure to comply with the terms of its complex permit the company was imposed by two fines of BGN 15 thousand and BGN 30 thousand. Except this, the company pays monthly fines of BGN 21 480 for air pollution. In early June the plant had to turned off an agglomeration machine in lead production after a prescription by the regional eco inspection office in Haskovo. According to the investment program of LZC it will be introduced in the lead production a new technology that consists of two reactors operating with oxygen. They will be melting even wastes to extract useful material. The company has promised MEW to build a waste depot as well. The company will have to submit its report about the EIA of the project no later than December. Furthermore, the management of LZC has undertaken to reduce air pollution through the installation of treatment facilities, until its complete investment program.
Source: Dnevnik (17.08.2009)

U.S. Steel to restart production in Great Lakes It is reported that U.S. Steel is planning to restart its production lines with three blast furnaces in Great Lakes of Michigan, which has been closed for several months due to depressed market. Last week, ArcelorMittal just announced to restart C-5 blast furnace with capacity of 1.6 million tons in Cleveland due to the recovery of steel demand. Meanwhile its hot rolling, pickling and galvanizing production lines will be resumed as well. It’s believed that production reoperation was primarily trigged by recovery in North American automotive market thanks to stimulus package of US government. It’s said that steel flat orders of some big steelmakers have been booked until this November. (Yieh.com)
Source: Other (17.08.2009)

Bondholders back Kremikovtzi rescue, poised to swap debt for equity The major bondholders and leading creditors of Bulgarian ailing steel mill Kremikovtzi have so far vowed support for the conversion of their claims into equity, said sources in the know. Sixty-five percent of owners of debt payable by Kremikovtzi have voted in favour of the rescue plan within a preliminary internal voting procedure staged by the bond issue trustee, Low Debenture. The remaining 35% of the votes were against the plan or neutral. However, the trustee has sent a letter of intent to the court-appointed receiver of the bankrupt mill, Tsvetan Bankov, expressing bondholders’ intentions to convert the entire issue into shareholders’ equity. The trustee can change its decision if an evaluation of the claims is released before the creditors get together in October, pointing to a disadvantageous swap coefficient. The other big private creditors – India’s State Trading Corporation which is owed around USD 200 million, and Stemcor, which claims USD 60 million from the mill, have sent letters to the receiver demanding capitalisation. Their move was mimicked by state suppliers NEK, Bulgargaz and BDZ. On the other hand, a pocket of bondholders, press for the company’s liquidation through asset sellout and hope arguments in favour of the closure would prevail in October as the preliminary voting has no mandatory character. The steel maker will amass losses in the next couple of years as indicated by its last year’s results and from this point of view Kremikovtzi is strategically more attractive as a bundle of assets and equity rather than as a whole enterprise, economist Krasen Stanchev who is consultant on liquidation supporters, told Dnevnik. Followers of the rescue plan, in turn, accuse liquidation backers of being unable to plunk additional money into the mill’s resuscitation.
Source: Dnevnik (18.08.2009)

Steelmet is licensed to use the Qualicoat quality sign Bulgarian aluminium profiles maker Steelmet have been licensed to use the Qualicoat quality sign after a successful completion of a project funded under the Competitiveness operational programme, the company said. The project “Improvement of competitiveness of Steelmet” through certification of product compliance and reception of licensing right to use Qualicoat began in 2008. Its total value is BGN 72 thousand as half of the funds are under the operational programme. “The certificate Qualicoat is another competitive advantage to our company, which strengthen our position as a reliable producer of both Bulgarian and international market,” commented the Executive Director of Steelmet Vladimir Vladimirov. According to him, the primary objective of this project is to increase export potential of the company. The certificate Qualicoat is an internationally recognized sign of quality. Companies which have it need to process all products for architectural performances in accordance with current standard specifications and can only use covering materials which are approved by Qualicoat. The factory for aluminum profiles Steelmet started production in early 1999 with two extruders middle class with a total annual capacity of 10 000 tons. At present, the company has three modern presses for extrusion and an annual capacity of over 15 000 tons. In 2007 it was put into operation a vertical line for electrostatic powder coating with a daily capacity of over 40 tons and maximum permissible length of painted profiles 7 meters. The total investment in the machinery and the additional equipment for the new plant exceeds BGN 4 million. In order to diversify the offered colors and coverings, Steelmet invested over BGN 1.5 million in an automated line for powder coating of aluminum profiles with wood effect. The installation was developed by TREVISAN and is the second of its kind in Europe.
Source: Dnevnik (18.08.2009)

Japan Aluminum Fee May Gain to 14-Year High on Supply Japan, Asia’s second-largest aluminum importer, may pay the highest fee in 14 years to suppliers from October as reduced shipments from Russia and increased purchases by China boost prices. The premium may climb at least 33 percent to more than USD 100 a metric ton over the London Metal Exchange cash price in the three months to Dec. 31. The fee would be the highest since buyers began purchasing most requirements through long-term contracts in 1996. Aluminum, used in homes and cars, climbed 28 percent this year, reaching the highest level since November, on signs the global economy is recovering, boosting demand for industrial metals. (Bloomberg)
Source: Other (20.08.2009)

Rio Tinto's profit slumps 65 percent Mining giant Rio Tinto said sharp falls in metals and mineral prices were behind first-half profit dropping by nearly two thirds. The world's third-largest miner reported a net profit of $2.5 billion for the six months ended June 30, down 65 percent from a year earlier, and was cautious about whether recent gains in commodity prices would be sustained. "However, the expectation that development in emerging markets will generate underlying strength in metals and minerals demand over the long term remains broadly unchanged," Chairman Jan du Plessis said in a statement. He said the Anglo-Australian company is financially stronger after using money raised from a recent share issue to reduce net debt by $14.8 billion. "There is more work to do, but we are better positioned with renewed financial strength," he said. Last week, rival miner BHP Billiton Ltd. revealed a 61.8 percent fall in profit for the year through June, also due to commodity price falls.
Source: Reuters (20.08.2009)

Non-ferrous metals production exceeded the demand Production of non-ferrous metals in the world during the January-June period of this year exceeded the demand, according to a report of the World Bureau of Metals Statistics / WBMS /. The surplus of aluminum in the first half reached 1.321 million tons against 808 thousand tons in the same period last year, of lead - 18 thousand tons versus 17 thousand tons, of zinc - 58.9 thousand tons against 101 thousand tons. Overproduction of copper rose to 15 thousand tons, while in the first half of 2008 the registered deficit was 166 thousand tonnes. In January-June this year the produced nickel exceeded its demand by 55.9 thousand tons, of tin – by 6.3 thousand tons.
Source: Darik Radio (21.08.2009)

World aluminium production shrank 8.4 percent in the first half-year The global production of primary aluminium shrank in the first half of the current year by 8.4 percent as compared to the same period of 2008 to 13.717 mln tons, said the International Aluminium Institute /IAI/. Acoording the data of IAI the production of primary aluminium in North America dropped 17.3 percent to 2.814 mln tons, in West Europe – by 17.1 percent to 2.245 mln tons, East and Central Europe (incl. Russia) – by 10.8 percent to 2.413 mln tons. Latin America reported 4.8 percent lower production to 1.471 mln tons, Oceania – by 5 percent to 1.277 mln tons, Africa – by 2.3 percent to 963 thous tons. Asia countries reported 11.5 percent higher production to 2.524 mln tons.
Source: BGNes (21.08.2009)

World crude steel production dropped in July World crude steel production for the 66 countries reporting to the World Steel Association was 103.9 million metric tons (mmt) in July. Although this is -11.1% lower than July 2008 production, it is the highest monthly production figure this year. China’s crude steel production for July 2009 was 50.7 mmt, 12.6% higher than July 2008. It is the first time ever that China has produced over 50 mmt of crude steel in a month accounting for almost 50% of world crude steel production. Since April 2009, world and China’s crude steel production has shown a steady month on month increase. Elsewhere in Asia, Japan produced 7.7 mmt of crude steel in July 2009, down by -24.9% compared to the same month last year. South Korea showed a decline of -13.3% from July 2008, producing 4.0 mmt of crude steel in July 2009. In the EU, Germany’s crude steel production was 2.7 mmt in July 2009, a decrease of -28.8% from July 2008. The UK produced 0.8 mmt in July 2009, down by -30.6% from July 2008. The US produced 5.0 mmt of crude steel in July 2009, -41.6% lower than July 2008. Brazil produced 2.5 mmt of crude steel in July 2009, a decrease of -22.8% compared to the same month last year. Russia’s crude steel production for July 2009 was 5.0 mmt, a decrease of -18.4% from July 2008. Ukraine produced 2.7 mmt of crude steel in July 2009, -27.7% lower than July 2008. (Worldsteel.org)
Source: Other (21.08.2009)

Aurubis reported EUR 9 mln loss Copper mining company Aurubis, which owns the plant near Pirdop in Bulgaria, reported a loss of EUR 9 mln in the first nine months of the financial 2008/2009. The company reported a net profit of EUR 167 mln for the same period last year. Income of Aurubis dropped to EUR 4.7 bln, which is 21.3 percent less as compared to the first 9 months of the financial 2007/2008. The first 9 months of the financial year of the company start on October 1, 2008, and end on June 30, 2009. Aurubis produced 1.56 mln tons of copper during the period as compared to 1.108 mln tons a year earlier. Slow sales of copper products. low price, the ‘unsatisfying’ price of the sulphuric acid (by-product of copper production) according to the management of the company and the instability of the scrap market are among the reasons for the loss. The company estimates the European market for copper concentrate as still weak, as opposition to the Chinese market where the demand goes up in the third quarter. Copper price remains unstable as well. In the first day of the quarter a ton of copper cost USD 3963 on the LME. The price reached USD 5266 on June 11, and it dropped again to USD 5108 as to the end of the period. In the third quarter of the financial year the produced copper concentrate in Bulgaria is 240 thous tons, which is 35 thous tons more as compared to the same period a year earlier. The total produced copper in the nine months is 747 thous tons from 296 thous tons a year earlier. Aurubis Bulgaria has produced more cathode copper, which is due to the opening of the new refinery in the end of 2008.
Source: Dnevnik (24.08.2009)

New Kremikovtzi for BGN 1.5 B Debts of Kremikovtzi for about BGN 1.5 bln would be transformed into shares. This is the approximate debt to creditors, who have declared intention to become shareholders of the steelmaker, said the assignee in bankruptcy Tsvetan Bankov. This option is included in the recovery plan of the plant. However, experts are yet to estimate the number of shares each creditor would receive for a BGN 1 of debt. The estimate would depend on how and whether the debt is provided for. So, for the time being the eventual influence of the shareholders is still unclear. Creditors, that have declared interest in becoming shareholders are 57. Some of them, however, have to receive several debts. The total debt of Kremikovtzi to all of them is BGN 1,486,380,321 or almost one and a half billion. The debt to the bondholders is the biggest – BGN 695,097,765. Others intending to become owners of part of the steelmaker are NEK, BDZ, Bulgargaz, India-based STC, Ecometal Engineering, Stemcor. Bankov would apply for assigning experts, who would have to estimate all takings. After the estimate it would be decided whether to transform it into shares or to cash the properties of the plant. As from August 1 Kremikovtzi pays its current debt to NEK, Bankov said. He plans to make Kremikovtzi cover its current expenses through sold output within a month and a half. For the time being the plant produces minimum quantities and pays for the gas it uses.
Source: expert.bg (24.08.2009)

Liquidation of Kremikovtsi The state will require the liquidation of Kremikovtsi steelworks, sources from the Bulgarian Ministry of Finance informed. The state will not back the revival package for the plant; the plan envisages creditors to convert the liabilities into shares and become shareholders of the steelworks. The bond-holders’ plan cannot be executed because the capitalization of the state receivables of the state represented by Bulgargaz, the National Electrical Company and the State Railways will turn into an unapproved subsidy, commented the Ministry of Finance. Such an action would provoke a conflict with the European Commission. Besides, even if more money is poured into the plant its work will not be profitable, the Ministry of Finance is explicit. If the plant can make any profit, let it be restored with private capitals only. Instead of struggling to heal the polluting production of Kremikovtsi, we’d better think what to have in its place. For instance a technological park can be established there, after the idea of Prime Minister, Boyko Borissov, commented sources from the Ministry of Finance.
Source: Standart (25.08.2009)

Kremikovtzi future depends on the state aid case Kremikovtzi future depends on the development on the case with the BGN 700 mln of state aid for the plant, said the Minister of Economy, Energy and Tourism Traicho Traikov. He said that there is an option for the State to withdraw from the case for returning the funds, which would make the bondholders of Kremikovtzi the biggest creditors. They would be able to carry out the liquidation, after which the operating businesses would be made available to investors in order to continue the production, Traikov added. The other option, in which the State keeps on with the legal proceedings, is not the best option as it would make it responsible for the recovery of the plant as thereof for the new debts to NEK and Bulgargaz.
Source: Standart (26.08.2009)

re mining in Madan stable amid metal prices jump Ore mining in Madan is stabilizing in case the current metal prices are kept and the increase trend continues, said Valentin Gadzhev, CEO of Gorubso-Madan JSC. According to him the official prices of lead and zinc in the last month are stable, which shows overcoming the most critical levels amid the crisis. The latest lead prices of over USD 1900 per ton and of zinc over USD 1800 per ton help Gorubso-Madan to prepare a more optimistic financial prognosis. In Gadzhev’s opinion the production of the company is profitable at prices above USD 1700 per ton, as the bottom prices reached during the crisis were at about USD 900. In order to use the flotation plant in Rudozem the company processes Turkish ore. A new delivery of about 1000 tons is expected from the Turkish region of Canakkale. According to the most optimistic prognoses, ore mining may be restarted and the closed mine Dimov Dol may be reopened in October. CEO of Rudmetal JSC – Roudozem said that the restarting the ore mining process is possible in case the prices of the metals remain stable and the expected financial aid from the Ministry of Economy is received. Rudmetal applied for EUR 500 thous financial aid for companies hit by the global crisis. Dimov Dol stopped operations in the beginning of the year due to the bad state of the metal market. The mine is kept in conservation state by the company in order to restart the mining when the market improves.
Source: investor.bg (27.08.2009)

India rejects demand for safeguard duty on steel, aluminium Indian government turned down a demand for imposition of safeguard duty on imports of certain steel and aluminium products, saying the domestic industry is not being hurt by imports. The Standing Board on Safeguard headed by Commerce Secretary Rahul Khullar and comprising Steel Secretary P K Rastogi, among others, rejected the recommendations of Directorate General of Safeguards (DGS) for imposition of the duty on the imports. The DGS had recommended the duty imposition after examining the industry's demand. "We have considered every aspect and did not find sufficient reasons for safeguard duty on imports of key steel and aluminium products," Steel Secretary P K Rastogi said after the meeting of the board. Safeguard duty, a WTO-compliant mechanism, is imposed as and when a surge in import is found to be hurting the local industry. The DGS had also recommended 10 per cent duty on imports of certain aluminium and its waste and scrap. However, these recommendations did not find favour with the board. (Business Standart)
Source: Other (27.08.2009)

Iron ore price negotiations - Vale selling on provisional prices It is reported that Brazilian iron ore miner Vale is not in talks with Chinese steelmakers on 2009 benchmark prices and will likely keep offering provisional prices on ore shipments. Mr Roger Agnelli CEO of Vale said "If you have a contract, which is being honored, you sell. Why do you need to negotiate?" He added "Everything is fine. We are not negotiating anything.” Vale said it is also selling ore to Chinese clients at spot market prices. He said steelmakers are restoring inventories after a strong decline in stocks that bottomed out at the end of the first quarter and beginning of the second. He said "Several companies are resuming production, several blast furnaces are being activated, and they need a minimum of stocks.” Vale in April agreed to grant Chinese steel mills a 20% discount on 2008 benchmark prices in provisional contracts until new term prices were settled. But annual price negotiations between the world's largest iron ore miners and China's steel industry broke down, after China refused to accept the 33% cut in term prices that was offered by Australia's Rio Tinto and accepted by rival Japanese and South Korean steel companies. (Reuters)
Source: Reuters (27.08.2009)

For a third consecutive year Deloitte launched its regional rating CE TOP 500- a unique report, that reflects the condition of the Central European market and the main challenges that business face in the region. Deloitte’s rating arranges the first five hundred biggest and most prosperous companies from 18 countries in Central Europe according to their profit and incomes, employment rate and capitalization. The rating includes microeconomic analyzes and comments on the perspectives of development in the selected industries, based on interviews, made with the companies’ executive directors. Apart from this, this year Deloitte will present additional research for the separate countries with analyses for the industries, touched upon- including special features and trends. Another new element will be the so called Business Sentiment Index, with opinions of leading business leaders from the biggest companies in the region on the future of the market in the condition of the present hard economic situation. The data from the rating will be presented on 2009, September 9, at the meeting of ministers from Central and Eastern Europe and business during the XIX International economic forum in Krinitsa, Poland. In the rating for 2008 13 Bulgarian companies were present. The highest place was held by Lukoil Neftochim, placed 29th, followed by Lukoil Bulgaria at 71st place and NEC at 124th place. The rest Bulgarian companies in the rating were Cumerio med (142nd place), Petrol (258th), Mobiltel (285th), OMV (381st) and BTC (363rd). Kremikovtsi and CEZ took 381st and 425th place respectively, while at the final one hundred companies Stomana industry (445th), Cosmo Bulgaria mobile (486th) and Metro cash and carry (499th).
Source: Company information (27.08.2009)

Hyundai raises steel prices, first hike in a year Hyundai Steel, South Korea's second-largest steelmaker, said it would raise steel prices by up to 6.9 percent in its first increase in a year to reflect rising global steel and raw material prices. The move by Hyundai, which has made a series of price cuts since October last year after six price increases, reflects growing optimism that the global steel industry is recovering from its worst recession in many decades, helped by economic stimulus plans across the globe. "The decision is to reflect rising overseas steel prices and as import prices of steel scrap jumped by $60 a tonne in just one month to $365 a tonne due to rising capacity run rates in the United States and Japan," Hyundai said in a statement. Prices of rebar, mainly used in construction, would rise by 6.9 percent, or 50,000 won a tonne, to 771,000 won and H-beam prices would also rise by 5.8 percent, or 50,000 won, to 910,000 won from September. Prices of hot-rolled steel will rise by 40,000 won, or 5.7 percent, to 740,000 won. (Reuters)
Source: Reuters (28.08.2009)

Lyudmil Pavlov: Kremikovtzi can make money The 57 largest creditors of the Bulgarian steel mill Kremikovtzi are ready to capitalize their debts and become shareholders, according to Podkrepa union leader Lyudmil Pavlov. Pavlov informed that a vote on the recovery program for Kremikovtzi will be held at the end of September. He stated that if the creditors vote in favor as he expects there will be no need for the government to liquidate the mill. He said that in case the program is not accepted tehre would be new strikes and the plant will face liquidation. “The plant is not liquidated yet. The coke chemical mill and the blast furnaces are shut down as they are among the main polluting operations”, Pavlov added. He added that they could have operated more ecologically but their filters had not been replaced regularly due to the financial problems of the steelmaker. Currently only several of Kremikovtzi’s production operations are active: the electrical furnaces, the mill for constant steel molding, the rolling equipment and the locomotive plant. “At the moment 3509 people work at Kremikovtzi. The electrical mills produce about 20-25 thous tons of steel each month as they operate at full capacity. There are customers and the steel is being produced to order”, Pavlov said.
Source: econ.bg (31.08.2009)

Asarel Medet invests BGN 102 mln Asarel Medet has extracted and processed 13.071 mln tons of copper ore in 2008 and the extracted ore mass is over 53 tons, which is not only a personal company record but a record for the sector in Bulgaria. This was announced by the exective officer of the company Lachezar Tsotsorkov during the greeting of the guests of the traditional company holiday of Asarel Medet. The mining company has invested over BGN 102 mln in modernization, energy efficiency and environmental protection last tear. As part of the anti crisis measures the company cut off its production programme as it plans the exctraction of 34 tons of ore mass, which is 36 percent less as compared to 2008.
Source: Pari (31.08.2009)

Indian steel industry thinks the worst is over For Indian steel companies, the present may not be perfect, but the future isn’t that tense either. A scenario that prompted Ratan Tata to announce at the Tata Steel annual general meeting last week that the company would raise its European production to 80 per cent of the capacity from the current 50 per cent by the year-end. “Demand is picking up in the West and the trade fall in Europe and the US has bottomed out,” the Tata Group chairman said, even while announcing that the steel major’s consolidated loss has gone up sharply. No one is saying the steel industry is out of trouble. The financial crunch continues, and coupled with high cost of input, severely affected the first-quarter profits of steel companies. But most agree with Tata that the signals are encouraging. The report -- Indian Steel Industry Outlook to 2012 -- says despite the slowdown, steel output rose 3.4 per cent in the first quarter of fiscal 2009-10, in comparison to the first quarter of 2008-09, while steel consumption was also up by 5.3 per cent. (Rediff Business)
Source: Other (31.08.2009)

ArcelorMittal Faces New South African Antitrust Fine ArcelorMittal’s South African unit and two other steel producers should be fined as much as 10 percent of their revenue from the country for alleged price collusion, a national antitrust authority said. The companies facilitated “cartel activity, which involved price-fixing,” the Competition Commission said. It initiated a complaint against steel companies after the government raised concerns over prices of the metal, used in industries from car production to construction. “We look forward to clarifying our position during the tribunal’s investigation,” ArcelorMittal South Africa Ltd. spokesman Sven Lunsche said. A separate 691.8 million-rand ($87 million) penalty against the Pretoria-based company, a record for the country, stemming from “excessive” prices on flat-steel products was suspended after the producer won an appeal in May. The commission said it will advise the Competition Tribunal, a higher antitrust body, to penalize the ArcelorMittal unit, Cape Gate Ltd. and Cape Town Iron Steel Works Ltd. (Bloomberg)
Source: Other (02.09.2009)

Promet Steel opened a new distribution center Metallurgical company Promet Steel JSC opened a new trade ground in Sofia. “Many traders do not keep stored stock due to the high price instability. We, on our side, want to be able to react rapidly to the requests of the construction companies and metal distributors; thus, we invest in our new distribution center”, said Yana Bulanova, chief specialist on the domestic market at the company. By the new center the company aims at cuting the time for delivery of rolled metal to customers in the region to several hours from payment and to expand the options for deliveries. The new site, in Elin Pelin and situated 8 km northeast of Sofia, would offer rebar and metal beams produced by Promet Steel, as well as imported coils. There would be a constant stock of 1000 tons of metal with options for transportation by single sheaf.
Source: Company information (03.09.2009)

Spot iron ore sales to China at 9 month low in August Spot iron ore vessel bookings to China in August by the world's two biggest exporters, Australia and Brazil, fell to a 9 month low indicating strong demand from the world's top steel maker may be slowing as steel prices slump. According to data specialist AXSMarine, Vessel bookings from Australia main ports, the biggest iron ore seller to China, stood at 30 in August little changed from 31 in July but down from an average of 40 in the Q2. Ship fixtures from Brazil to China tumbled to 7 last month, the lowest since November last year after jumping to a record 39 in July when trade between China and Australia slowed. The slowdown follows China detention of four Shanghai-based iron ore employees of Rio Tinto over spying allegations and suspension of iron ore spot sales by some Australian sellers. Separate data showed that Brazil's iron ore exports, most of which goes to China also dropped 8.4% to 23.3 million tonnes in August from their 2009 peak level in July underscoring that China's iron ore buying spree may be losing some steam. (Reuters)
Source: Reuters (03.09.2009)

Kremikovtzi assets sparse to patch up even half of debt The assets of Bulgaria’s debt-saddled steel mill Kremikovtzi have been attached a market value of BGN 837.2 million, according to the report by Amrita consultancy, which was hired to appraise the company. But with the plant’s total debt running at BGN 1.9 million depending on the outcome of a number of court battles, creditors will not be able to cover 100% of their claims. The assets’ liquidation value has been set at BGN 662.7 million, which represents the possible sale proceeds, adjusted by sale costs and other provisions. The existing assets could be enough to cover between 50% and 30% of the claims but creditors could count on a different percentage depending on class. Creditors with receivables secured by a pledge on assets will be highest on the priority list. The largest private claim – on the company’s bond issue whose interest has ballooned to BGN 698 million -- is secured by a pledge. And Arcelor Mittal, the world’s largest steelmaker, also has a secured claim of BGB 36 million. Sources close to the matter say the collateral covers close to 20-25% of the claims but it all hinges on the proceeds that would be made if the company’s assets do go on the chopping board. Although it could turn out as Kremikovtzi’s largest creditor once the trail ends on the BGN 695 million state aid, the government is the least protected creditor. Public state claims come in only third on the list after secured claims and claims by the workforce. Thus the government faces joining in the scramble with more than 100 smaller creditors for the leftovers from a possible forced sale of assets. The report reveals that Kremikovtzo owns a staggering number of assets, some of them non-metallurgical or in wretched condition.
Source: Dnevnik (04.09.2009)

Bulgaria Steel Behemoth Faces Cash Hole of BGN 1 B The market evaluation of Bulgaria's obsolete steel mill Kremikovtzi is BGN 837 M, according to the appraisers' report published on the company's internet site. This amount includes long-term material assets and shares. The liquidation value or the market price for a forced sale is nearly BGN 603 M. The lands owned by the mill have the highest value of BGN 202 M while the buildings are appraised at BGN 189 M. The effective date of the appraisal, conducted by the "Amirita" Consulting Agency is September 1. The Kremikovtzi assignee in bankruptcy, Tsvetan Bankov, told the Bulgarian information agency BTA that it is obvious the mill's assets cannot cover its debts amounting to BGN 1,9 B, but failed to commit to any forecast about possibilities to sell Kremikovtzi at market value citing the global economic crisis. After the mill's creditors examine the evaluation of the assets, they would declare their final decision about capitalizing their their debts and becoming shareholders. On August 30, creditors including State owned companies such as the railroads, Bulgargaz and the National Electric Company declared their readiness to become shareholders.
Source: Darik Radio (04.09.2009)

Kremikovtzi’s assets worth BGN 837m Kremikovtzi’s steel mill property valuation report announced that net market value of the bankrupt plant’s fixed assets stood at BGN 837,244,000. The appraisal was conducted by the "Amirita" Consulting Agency on September 1, 2009 and is valid for six months. The liquidation value of the material assets amounts to BGN 662,708,000. This market value is usually close to the price in cases of forced sale, the syndic of the steel mill Tsvetan Bankov explained. The debts of the plant amount to BGN 1.9 billion and it is obvious that its asset cannot cover them. 57 of the creditors have already announced their plans to capitalise their receivables, which amount to BGN 1.5 billion, Bankov told the Pari daily. Among them is the biggest creditor, the debenture-holders. They gave their consent for the transformation of their debts on condition that at the general meeting their representative may not vote for the recovery plan proposed by the syndic. If the creditors approve of the healing plan, this will put an end to the insolvent procedures of the plant and will help find financing for the normal operation of the steel mill. However, if the creditors vote against the healing plan, the company will have to stop its activity and its assets will be sold to cover creditors’ debts. Keeping all procedure terms, the general meeting of the creditors could not be summoned before the beginning of the coming year, the syndic Bankov forecasted.
Source: Pari (04.09.2009)

Lead Surges in ‘Panic Buying’ as China Vows Industry Cleanup Lead, the best performer on the London Metal Exchange this year, surged to the highest price in almost 16 months as China vowed to shut substandard smelters after thousands of children were poisoned. People in China are angry “that children are involved in poisoning cases, which is why the government must take harsh measures and show it is serious about punishing offenders,” said Liu Biyuan, an analyst at GF Futures Co. The country is the world’s biggest lead producer and consumer. There was a “buying panic” in the London market for lead, according to Citigroup Inc. Excessive exposure may make children less intelligent, doctors say. Lead for delivery in three months jumped as much as 2.9 percent to $2,345 a metric ton, the highest level since May 16, 2008. The metal rose as much as 8.8 percent yesterday after the initial report of the planned environmental crackdown. A routine blood test conducted on 1,000 children in Kunming, capital city of Yunnan, found 200 who had “excessive” levels of lead on Aug. 31. There are also lead-poisoning probes in Shaanxi and Hunan provinces. (Bloomberg)
Source: Other (04.09.2009)

South Korean steelmakers to post better Q3 records South Korean steelmakers are expected to register sharply improved performances for the third quarter amid growing signs of recovering economic conditions at home and abroad. The bright outlook comes after industry leader POSCO and other steelmakers have been struggling since late last year, buffeted by soaring raw material prices and slumping overseas demand, especially from China. According to analysts, POSCO's third quarter operating profit could hover above KRW 1 trillion for the first time in three quarters, with a median forecast reaching KRW 950 billion. POSCO's operating profit, which hit as high as KRW 1.39 trillion in the last quarter of 2008, tumbled to KRW 373 billion in the first quarter of 2009 and KRW 137 billion in the April to June 2009 period. Market watchers attribute POSCO's expected improvement in third quarter performance to falling materials costs and rebounding overseas demand. Currently, POSCO's factories are running full tilt, while its capacity utilization rate was 83% in the first half of this year. Smaller rivals Dongguk Steel Mill Co and Hyundai Steel Co are also forecast to record better third quarter results. (Yonhap)
Source: Other (07.09.2009)

A new trade site for fittings was opened near Sofia Metallurgical producer Promet steel opened commercial site in Sofia on September 2. The new distribution center is situated in Elin Pelin, 8 kilometers northeastern direction from the capital city. Profiles and fitments, produced by the company are offered there. Permanent amount of 1000 tones of metal on hand with a possibility of transportation will be retained. The new location of the site will permit time for delivery of rolled metal for company’s customers in the region to be shortened. The company’s main production is fittings, round rolled metal, equal setsquares and rims. For the period January- August 2009 it produced 199 400 tones of fittings. Big part of its activity is concentrated in Bourgas. The company manages one more distribution center in Rousse.
Source: Stroitelstvo Imoti (07.09.2009)

54 dockers to be laid off Due to cut operations the management of Port-Lom JSC will lay-off 54 dockers. The cargo turnover has devreased 6-fold, said the executive officer Borislav Mihov. Since the beginning of the year the port has processed only 220 thous tons of cargo, which is the usual quantity for a month or two, he added. Port-Lom operates with no profit and processes small quantities of coal imported from Ukraine and plates from export by Stomana Industry JSC.
Source: Standart (09.09.2009)

Indonesia, S.Korea's POSCO discuss steel project South Korea's POSCO, the world's No. 6 steelmaker, met Indonesia's Industry Minister to discuss plans for a $5 billion steel investment in Southeast Asia's biggest economy, a senior official said. Ansari Bukhari, director general of metal and machinery at the industry ministry, said the planned investment would be through a joint venture with Indonesia's state-owned PT Krakatau Steel, the country's biggest steel producer. "They came to report an investment plan between POSCO and Krakatau Steel to build a steel plant with capacity of 5 million tonnes a year," Bukhari said. POSCO, however, said that nothing had been decided. "We are looking at various opportunities but nothing has been decided regarding our investment plans in Indonesia and our interests are much more on raw material assets such as LNG, coal, iron ore and nickel" rather than the steel project, POSCO spokesman Choi Doo-jin said. Krakatau Steel was one of several Indonesian state-owned firms slated for privatisation, seen as a way to improve its performance, increase efficiency, and raise funds for the state's budget deficit. But last year's financial crisis meant those privatisation plans were put on hold. (Reuters)
Source: Reuters (09.09.2009)

174 private companies with no assets owe BGN 170 mln to the state Owners of 174 privatized companies with no assets owe over BGN 170 mln to the Post-Privatization Control Agency due to non-implementation of engagements according to the denationalization contracts. The figure was anounced by Atanaska Bozova, head of the body. She added that all equities of these companies are under distraint but they have no real value as they are not secured by any assets. Only the owner of 71 percent of Kremikovtzi – Finmetals – owes about BGN 360 mln. Bozova said that the office of Finmetals and several properties of the company, owned by Mittal, are under distraint but no other assets have been found. In case the steel giant is liquidated the Agency would not be among the creditrs as de jure the debtor is Finmetals. In case of capitalization of Kremikovtzi’s debt, the available shares would be 13 mln and the value of the distrained ones would be higher, Bozova added.
Source: Darik Radio (10.09.2009)

China Steel Output Rises 2% in August China, the world’s largest steelmaker, increased output to a record in August as government spending spurred building and manufacturing demand, according to industry publication Umetal. Output was 51.7 million metric tons last month, according to data from the China Iron & Steel Association. The country produced 50.7 million tons in July, according to the National Bureau of Statistics, which will announce official August output this week. China is spending 4 trillion yuan ($586 billion) to revive its economy, bolstering demand for steel used in cars, houses and railways. Rising output and a price surge earlier this year have led to a 17 percent decline in benchmark Chinese steel prices in the past four weeks. Lower prices signal September steel output is likely to fall from the previous month. Some mills in the northern province of Hebei, the nation’s biggest steelmaking region, have brought forward annual maintenance or closed small furnaces amid slowing orders. (Bloomberg)
Source: Other (10.09.2009)

Heavy Industry Collapsed Within a few days the development of ore mining, metallurgy, machine building, timber-processing deteriorated at the end of September 2008 "The crisis occured unexpectedly, literally within two weeks," said the head of board of directors of Bulgarian Association of the Metallurgical Industry (BAMI) Anton Petrov back then. The first signal of the incoming crisis according to managers is the slight drop in prices on world commodity exchanges in July 2008, said Lachezar Tzotzorkov, Chairman of the board of Bulgarian Chamber of Mining and Geology. According to him September was a strong signal that not only a period of decline was coming, but much more serious problems for the global economy. Later, the prices of non-ferrous metals - copper, zinc and lead slumped almost 2-fold. The average annual decline in heavy industry was 40 per cent compared to the previous period, th figures by sectors show. The situation is worst in production of basic metals for shipbuilding, mining and timber-processing, where the decline of sales exceeds 50 per cent. In the beginning of the year one of the "spared" sectors in the mining sector was coalmining, in the end it felt the crisis as well and reported à decline of 30 per cent. Only the mining industry in the first six months 1200 people saw job cuts. "The crisis has its positive side - it will allow managers to learn valuable lessons about risk assessment in good days and adequate prevention," said Tzotzorkov.
Source: Dnevnik (11.09.2009)

Auction for Kremikovtzi gas quota Steelmaker Kremikovtzi will be left with no greenhouse gas quotas as per the renovated national plan for the quotas trade. The plan has been prepared by the Ministry of Environement and will be presented to Minister Nona Karadzhova for approval of the government. The ‘yes’ of the European Commission will ne necessary after that in order to start the trade with the unused quota. It is still unclear what will be done with the unused quota for 4.5 mln tons of gases left with the closure of Kremikovtzi, said the plan maker Hristo Hristov from the Energetics Institute. According to him the State will seek to keep it for an auction. The national plan provides for the sale of 10 percent of the 42 mln quotasw granted to Bulgaria in the period 2008-2012. The government will keep 31 mln quotas in reserve as well as 7.8 mln for Muttual Allocation projects. The increase of the reserve presums that finished projects have been included, whish is not correct, said Dimitar Brankov from Bulgarian Industrial Association. BCCI also said that the reserve is too big and the quotas should go to the operating companies.
Source: 24 chasa (11.09.2009)

UAE steel stockpiles becoming rusty Most of the steel stockpiles imported in UAE last year have become rusty and are being rejected by buyers, said industry officials. As the UAE market does not like rusted steel, the material is being exported to other countries including India and Pakistan. Thousands of tonnes of excess reinforced bars were imported into the country by traders, including many non-steel businessmen, to profit from rising prices. The prices last year dramatically shot up to $1,500 per tonne before they dropped to about $400 per tonne by the end of the third quarter. With the massive drop in demand following a slowdown in construction activity, especially in Dubai, many importers resorted to panic selling, bringing the prices further down. Meanwhile, many continued to hold onto their imports hoping for the prices to recover. Ramdas Kamat of Middle East Traders said that although rebars stored in warehouses for one year can be used in the construction industry, very few contractors in the GCC, and especially in the UAE, like to use old steel. (Emirates Business 24-7)
Source: Other (11.09.2009)

BGN 5 mln for laid-off Kremikovtzi workers Bulgaria is going to get BGN 5 M from the European Globalization Adjustment Fund in order to help the workers laid off from its ailing steel giant Kremikovtzi to find new jobs. This has been announced by Labor Minister, Totyu Mladenov, who explained that the EGAF required 35% co-financing by the state. Thus, the several thousand workers who might be laid off from the bankrupt steel plant could be enrolled in qualification courses with the Labor Ministry including motivation training, professional orientation, subsidized employment for people over 50, and a small grant of BGN 10 000 if they want to start a business. The money from EU's Globalization Adjustment Fund cannot be used for paying unemployment benefits. For starters, Bulgaria would apply for the 1000 workers already laid-off in the period May-August. The scheme would include the 30 workers laid-off from Port Lom, which is almost entirely dependent on the orders from Kremikovtzi. The fund allows to update the number as to embrace all laid-off employees from the bankrupt steelmaker. Due to the slow procedures for application at the EGAF, the Ministry of Labor has set asode BGN 500 thous for starting the project next month.
Source: Pari (14.09.2009)

Sold steel products in Bulgaria doubled in 2008 Sales of the Bulgarian steel products in the country have almost doubled to 753 thousand tons in 2008 as compared to the previous year. This was shown by the preliminary report of the Bulgarian Association of Metallurgical Industry (BAMI) for the development of the sector. Total consumption of ferrous metal products in 2008 is 2.6 million tons, of which 1.9 million tons are imported. In 2007 these figures were 2.6 million tons, of which 2.2 million were imported. Steel production in the country involves eight companies - Kremikovtzi, Stomana Industry, Promet Steel, Helios Metalurg, Precise-Inter Holding, Zhiti, Inter Pipe and Klockner Metalsnab. Bulgarian steel industry is heavily dependent on imports of iron ore and coking coal for blast production. Demand for scrap, as the main feedstock for the production of steel in electric furnaces, is met almost entirely by domestic sources. The used waw iron resources are almost fully from import. The largest quantities in 2008 were bought from Ukraine - 67.1%. For comparison, in 2007 the main source of iron concentrate is Brazil, which supplied 53% of the iron products. In 2008 Bulgaria produced 281,199 tons of anode copper and 126,853 tons of electrolyte. For comparison, the same indicators in 2007 were 242,639 tons and 69,634 tons. The only copper company in Bulgaria is Aurubis Bulgaria. Last year the company launched its new refinery for electrolytic copper with an annually capacity of 180 thousand tons. Through it the production grew by 82.2% as compared to 2007. Sulfuric acid is produced as a by-product of the copper production. The company finished 2008 with 15.9% more acid, or 930,601 tons. Anode copper is exported mainly to Belgium - 70%. Cathode copper is sold in Greece, Serbia, Turkey and China. Production of lead in 2008 grew by 1.7%. The reason is the increased capacity of KCM - Plovdiv. During the period the Plovdiv-based plant produced 65 thousand tons, in OTzK – 23,446 tons. In 2007 their production was 61,201 tons and 25,774 tons respectively. The plants have produced 75,641 tons and 26,058 tons of zinc as well respectively. The largest share in imports of non-ferrous metals in the country is held by aluminum, as it is not being produced in the country. The largest quantities are imported from Russia - 48.3%, and Georgia - 23.1%.
Source: Dnevnik (14.09.2009)

40 more workers to be laid-off at Port Lom Port Lom will lay-off 40 more workers until the end of the year, said Borisla Mihov, head of the second biggest Bulgarian port on the Danube. This is the second lay-off wave since the beginning of the crisis. The port discharged 59 workers during the first one and currently employs 278 people. ‘We plan to reduce the staff number to 223’, Mihov added.
Source: Standart (15.09.2009)

Emission trading quotas cut 10% The carbon emission trading quotas for Bulgarian enterprises have been cut about 10%. That emerges from the revised national plan for emission trading in 2008-12. Nevertheless, businesses are satisfied with the new distribution, because the year in which they produced the most hazardous emissions has been taken as a base year. Industry organisations have to present their comments on the revision by Thursday. An interdepartmental working group and business representatives will convene on September 23 to discuss the proposals. The government's plan distributes 42.4 million tonnes of carbon dioxide emissions a year. That quantity is specified in the European documents. Bulgaria is obliged to reduce its greenhouse gas emissions by 8% in 2008-12, compared to the base year 1988. The revised national plan reduces the trading quotas for installation operators to avoid double reporting of approved joint projects. A reserve of 7.8 million tonnes has been allocated for that purpose. Some of the joint projects have been completed already, the deputy chairman of the Bulgarian Industrial Association (BIA), Dimitar Brankov, said. Another reason for the quota reduction is the reserve of 31.6 million tonnes for new production facilities after 2008. Businesses say the plan provides a clear rationale for the quotas as a whole and hope they will see the final version before it is submitted for approval to the council of ministers and the European Commission.
Source: Pari (16.09.2009)

Work on Vietnam’s largest steel mill to begin next month Pomina chairman Do Duy Thai said the new factory, expected to open in three years at, would increase Pomina’s annual capacity to 1.5 million tons, making it the largest steel producer in Vietnam. The new steel casting facility will have an annual output capacity of one million tons on its own. The plant will also be part of a larger, US$300-million facility that would include a steel rolling mill with a capacity of 500,000 tons a year and a sea wharf with an annual capacity of 3 million tons. The project will be built in Tan Thanh District’s Phu My Industrial Park. Last Saturday, Pomina was granted a VND884 billion (US$50 million) loan from VietinBank, accounting for 64 per cent of the VND1.373 trillion required to build the plant. The same day, the company signed another contract with German firm Concast in which the foreign firm agreed to supply advanced casting technology called Consteel-Techint to help save energy, lower costs and preserve the environment. The mill will be only the 20th in the world to apply the new technology. (Vietnam News Agency)
Source: Other (16.09.2009)

Belene NPP Sold out as Swarf The Belene Nuclear Power Plant (NPP) has been sold as swarf. The large-scale fraud was committed while power in Bulgaria was changing hands : Sergei Stanishev's cabinet had already stepped down and that of Boyko Borissov's hadn't taken the helm yet. Metal materials used in the construction of the Belene NPP foundation have been sold as scrap three times. The state budget has suffered damages standing at BGN 1 million. "The Economy department of the Criminal Police revealed the fraud. The Ministry of Interior and the Ministry of Economy carried out the checkups," announced Minister of Interior Tsvetan Tsvetanov. In the period between April 23 and August 28, the National Electric Company (NEC), which owns 51% of the Belene NPP shares, resold the expensive equipment for a song. It all began with 9 thous tons of scrap. The first purchaser was VDK 1. The valuer of the announced for sale blocks and steel pipes is Mini Consult – M LTD, manged by Liliana Hristova. However noone of the valuers showed at the site to actually evaluate the stock. Meanwhile the contract is added an annex claiming that the blocks and pipes are swarf. No such swarf was present. Thus, the valuer cuts the price to the ridiculous BGN 160 per ton of scrap. The sale goes through the Sofia Commodity Exchange. After deduction of the transportation costs, the price fell to BGN 110 per ton. And this is the beginning of ruthless sales. The next purchaser is Evrometal, related to Lyudmil Stoykov. The company paid BGN 280 per ton but also sold the metal with profit. The last of the purchasers is Stomana Industry SA paying over BGN 300 per ton, which is the realistic price, prosecutors said. In the period May 24 – August 16 the price of a ton of scrap varied between BGN 284 and BGN 304. If the sale was legal, the metal ought to have left the Belene site at this price. The documentation on the case has been submitted to the Prosecutor's Office.
Source: Standart (17.09.2009)

Iron for USD 1 B Is Rusting Iron worth over USD 1 bln is rusting at the construction site of Belene NPP. It is there since 1990, when the State decided to cease the construction works. Except for the metal constructions, pipes and rebar, Belene NPP contains dozens of tons of parts and elements for the nuclear reactors, ought to have operated as from 1992 and 1994. The communist government ordered may elements for the steam generators, turbines, even the metal corpus of the first reactor delivered from Czechoslovakia back in the 80s. According to people familiar with the matter, there have been numerous attempts to sell the rusting metal but all came to dead ends.
Source: Standart (17.09.2009)

Steel Production in China to Rise 6% Steel production in China, the world’s largest maker, will rise 6 percent this year as demand from manufacturers and builders increase, according to figures from the Ministry of Industry and Information Technology. Output will reach 530 million metric tons, Zhang Dechen, a researcher at the ministry, said. Production was 500.5 million tons in 2008. China is spending 4 trillion yuan ($586 billion) to revive its economy, bolstering demand for steel used in cars, houses and railways. The Chinese cabinet said Aug. 26 it’s studying curbs on overcapacity in industries including steel. “The room for domestic demand to consume the redundant capacity is very limited,” Zhang said. “The pace to phase out obsolete capacity is too slow.” Steel output jumped to a record in August, a fourth month of gain, spurring a 19 percent decline in benchmark Chinese steel prices since Aug. 4. (Bloomberg)
Source: Other (17.09.2009)

The greengas allowances for several plants cut down The government will decrease the carbon dioxide emissions of several big industrial companies according to the new National Plan for Allowances Distribution for Trade in Greenhouse Gases 2008-2013. Among the hit companies are Brikel, Stomana Industry, Devnya Cement and Holcim Bulgaria. According to the Minister of Ecology Nona Karadzhova, the previous government has tollerated certain companies by providing much bigger allowences than necessary. Thus they could have been able to win from the trade with the surplus if Brussels had not retirned it for revision in February. According to people familiar with the matter, the allowances for some companies have been increased on the expense of others as per instructions from the Ministry of Economy and Energy. The updated plan will see the allowances for TPP Maritsa East 2 and Enel Maritza-East 3 increased as they keep the energy balance of the country. According to Karadzhova, the allowances set by the EC for the period 2008-2013 are enough. The inspection showed that Bulgaria fits in the allowances cut down in 2007 from 75 mln tons to 42 mln tons. Bulgaria started leagl procedings against the decision.
Source: Trud (23.09.2009)

Middle East only region to see positive steel growth Steel production in the Middle East increased by about seven per cent in August compared to July, according to statistics released by the World Steel Association. The Middle East is the only region, which has registered a positive growth of 2.2 per cent during the first eight months of 2009 compared to the same period last year. The region produced about 11.069 million metric tonnes (mmt) of steel between January and August 2009 compared to 10.828 mmt during the first eight months of 2008. Saudi Arabia alone produced 31.98 per cent more steel in August after it increased production from 347 metric tonnes in July to 458 metric tonnes in August. However, production levels in Iran went down by 2.29 per cent from 870 metric tonnes in July to 850 metric tonnes in August. Qatar's production remained the same at 85 metric tonnes. The UAE, which does not release its production figures to the World Steel Association, also witnessed an increase in production during the past few months. Emirates Business 24-7
Source: Other (23.09.2009)

Production pruning - ArcelorMittal Hunedoara H1 output dips by 78pct ArcelorMittal steel mill in Romanian town of Hunedoara has produced only 31,900 tonnes of steel in the first 6 month 2009, down by 78% YoY. Tenaris which closed its major factory in Italy in July have produced just 458,000 tonnes in Kalarash, Romania. This is one third part of the realized production a year ago. However, Italians laid off around 150 workers in their factories in Zalau and Kalarash. According to the Romanian Steel Producers' Union the output of steel will reach 2.3 mln tons until the end of the year. This would be one third of the production in 2008.
Source: Agency Focus (23.09.2009)

Bankov: Lay-offs at Kremikovtzi will continue Lay-offs of workers at Kremikovtzi will continue, said the assignee in bankruptcy Tsvetan Bankov. At present 3100 people work for the company, but the recovery plan says that their number will remain 2500. Bankov had refused to sign a collective labor contract with the Unions back in the spring, because the company could not provide additional social benefits to metallurgists. He also said: I refused to sign a collective contract back in the spring, when the old collective contract expired. On the one hand there is no way to fund increase in social benefits, whatsmore on what basis, did the productivity increase? This situation is simply not possible at present, on what grounds, of the non-operational production? Or should I add obligations to the creditors’ that are already present? For me it is unrealistic, impossible to sign a collective contract for additional social benefits, provided that the question now is whether the company would keep on existing.
Source: Darik Radio (24.09.2009)

Stomana Industry invests EUR 120 million in environmental protection Stomana Industry JSC is a leading steel producer in Bulgaria, offering a wide range of products: reinforcing bars for concrete structures, steel plates, long products, special steels, special profiles and steel balls for grinding. Stomana Industry JSC is an enterprise that laid the grounds of modern metallurgical industry in Bulgaria and successfully stands on the Balkan and international markets for more than 55 years. In June 2001 Sidenor SA, Greece, acquired the company capital and launched a major investment program aimed at modernization of production facilities and complete reconstruction of the company. As a result of the EUR 250 million investments, today Stomana Industry JSC has advanced technology and unique for Bulgaria and the region production facilities. The company has a high international rating, and in 2008 was ranked by Deloite’s Top 500 among the largest and dynamically developing companies in Europe. In 2007, the Bulgarian Investment Agency awarded the company with a Class A investment certificate. The products of Stomana Industry correspond to the generally accepted quality standards such as EN, DIN, ASTM, LS, BS, Lloyd's Register, Germanischer Lloyd, European directives, etc. Quality policy, environmental protection and creating safe and healthy working conditions are major priorities for the company. Investments in these areas exceed BGN 120 million. The quality management system is certified under ISO 9001:2000. The system for environmental protection of Stomana Industry JSC is certified under ISO 14001:2004. The system for safe and healthy working conditions is certified under OHSAS 18001: 1999. For reducing the labor accidents to a minimum and an effective policy on health and safety at the work place, the company was awarded a Prometheus – 2009 prize by CITUB and MLSP. The Corporate Social Responcibility (CSR) strategy aims to ensure competitive advantage and ensure long-term sustainability of Steel Industry. The measures that the company take under CSR aim at integrating the social and environmental aspects of corporate operations with shareholders' interests and the expectations of society. Stomana Industry JSC has implemented dozens of short-term strategic projects and programs for responsible business: • to build employers' mark; • technological upgrading and modernization of production facilities, improve working conditions to ensure the safety and health at work; • to reduce the harmful emissions, obtaining its own water sources and wastewater treatment and other activities to protect the environment; • quality assurance and improvement of communication and customer service; • support the development of vocational education and interaction with universities; • sustainable development of Pernik Municipality with a focus on: a responsible business, favorable conditions for the development of children and young people, health, cultural and historical heritage, etc..; • to support community causes, charities, etc.
Source: Pari (24.09.2009)

EVN threatens cut-off for Gorubso Madan mines Power utility EVN Bulgaria, the local unit of Austria’s EVN which owns the regional distributors in Plovdiv and Stara Zagora, warned it will phase out electricity supplies to local lead and zinc miner Gorubso Madan over its mountain of unpaid bills. EVN said it has held drawn-out negotiations over the over BGN 473,000 debt of the Intertrust-owned company, having even agreed to a reschedule. However, the miner has failed to honour its commitments and its management and the relevant government institutions have been informed of the measure. Intertrust Holding executive director Roberto Mladenov attributed the delay in payments to the two bank holidays on Monday and Tuesday, claiming the due amount was transferred to EVN’s accounts on Wednesday. The power company pledged to keep supplies running if it receives the payment by Thursday.
Source: Dnevnik (24.09.2009)

Brazil Wants Vale to Vie With Arcelor, Top Ore Buyer Brazil wants Vale SA to become a major steelmaker to compete with ArcelorMittal, the world’s largest producer and the company’s biggest iron-ore customer. Vale, the world’s biggest producer of the steelmaking raw material, must lead Brazil to become a major exporter of rolled steel products, Mining and Energy Minister Edison Lobao said yesterday in an interview. So-called rolled steel is used to produce vehicles and household appliances. “Vale has all the characteristics to become an international steel producer of that magnitude,” Lobao said when asked about the potential for competing with Luxembourg- based ArcelorMittal. “It has the competence to do so.” Brazilian President Luiz Inacio Lula da Silva wants Vale to boost steelmaking to seek higher-value exports and create jobs. The government’s demands that Vale become a major steel producer would force the company into competition with its own clients, such as ArcelorMittal, Vale’s largest single iron-ore customer. Vale is controlled by a group that includes Previ, the pension fund of state-controlled Banco do Brasil SA, Bradespar SA, Mitsui & Co. and Grupo Opportunity. The government holds 6.9 percent of voting capital through state-controlled development bank BNDES. (Bloomberg)
Source: Other (24.09.2009)

Assarel-Medet wins Pari daily's big prize Assarel-Medet won Pari daily's big prize for socially responsible company of the year. Prize winners in the five categories are Roca Bulgaria (responsibility towards environment), Stomana Industry (responsibility towards employees), Eurobank EFG (ethical business behaviour with stakeholders), AstraZeneca (participation in projects with long-term social effect) and DSK Bank (charity).
Source: Pari (25.09.2009)

JFE plans to expand steel market into MEA and India With the development of emerging economies, Japan large scaled steel enterprise JFE, began to shift the export strategy and plans to expand the steel markets in Middle East and India. China and South Korea are the major export markets for Japan, accounted for 40% of Japan's steel export. In order to expand to the new markets, JFE decided to cooperate with the local enterprises in Middle East and Africa and set up large scale blast furnace with 100mln tons of annual crude steel production in the future several years, which is equivalent to Japan' s total steel output. At present, JFE is discussing with enterprises in Middle East, India, Indo China, Africa and locals on cooperation issues. Japan's crude steel production was 105.5 million tonnes in 2008, down by 13.2% YoY from 2007. (MetalBiz)
Source: Other (25.09.2009)

Evaluation of Kremikovtzi assets extended with a month? A general meeting of Kremikovtzi’s creditors is not yet scheduled, said the chairman of the Sofia City Court (SCC) Georgi Kolev at a press conference. The General meeting should adopt a recovery plan and the valuation of metallurgical plant. 28 September is the deadline for assessment of the assets, but a request for its extension by a month has been applied. In Kolev’s opinion that most probably the application will be approved because a lot of expertise and assessments have to be made.
Source: econ.bg (26.09.2009)

Stomana Industry nominated for Socially Responsible Company of the Year Stomana Industry was ranked first in the national competition Social Responsible Company of the Year in category Social Responsibility Towards Employees. This competition is organized for the second consecutive year by Pari daily with the assistance of the consulting firm DELOITTE BULGARIA, which develops the criteria and evaluation of the companies. The purpose of this competition is to demonstrate and distinguish the best examples of Bulgarian businesses in the area of corporate social responsibility. Invitations to participate in the competition were sent to 600 companies in the country. 39 of them qualified for the first round of the competition. Winners were the representatives of Bulgarian business in the following categories of corporate social responsibility: 1.Social Responsibility Towards Employees - Stomana Industry JSC; 2. Responsibility to Environment - Roca Bulgaria; 3. Ethical Behaviour and Responsibility to the Parties Concerned - Postbank (Stomana Industry is second); 4. Participation in Projects with Long-term Social Effect - pharmaceutical company Astra Zeneca; 5. Charity – Bank DSK. The general contribution Socially Responsible Company of 2009 was awarded to Assarel Medet. The prestigious awards of Stomana Industry are recognition for the systematic, purposeful and responsible social policy of the company. Despite the economic crisis, workers maintained their social benefits such as: meal vouchers, free transport, extra health insurance and medical care, training in Bulgaria and abroad; bonuses for safe work; holiday costs on the expense of the company, summer camps at the seaside for children of the company employees, etc. Stomana Industry has invested over BGN 250 million in new technologies, modernization of production systems and improving the working environment, which was certified by the Bulgarian Investment Agency as Class A Investor. Over BGN 100 million have been invested in environmental projects. As compared to 2001, labor accidents have reduced 4-fold. Investing in safe and healthy working conditions exceeds BGN 70 million Therefore, Stomana Industry was awarded the prize of CITUB and MLSP Prometheus 2009.
Source: SaPernik (28.09.2009)

Bulgaria Trades Waste Emissions Quotas Global climate changes and their effect on the environment, biological diversity and agriculture will be the issues, to be discussed at an international conference in Sofia. Representatives from thirty countries from Central and Eastern Europe will take part in the forum, which will be opened today by deputy minister of environment and water Ivelina Vassileva. Bulgaria might profit EUR 500 to 600 million if it deals on the EU market for greenhouse emissions the rights for throwing out 50 million tones of toxic gases, explained for 'The Standart' Mitko Brankov, deputy chairman of the Bulgarian Industrial Association (BIA). BIA has proposed the Bulgarian government to include that possibility in its Programme of anti-crisis measures. Currently on the international markets the price of greenhouse gases is EUR 12-14 per tone. Before the global economic crisis it was higher - EUR 25 per tone. The European Commission foresees in the period 2012-2020 the prices to be about EUR 39.
Source: Standart (28.09.2009)

BGN 300 thous put in new rails at Gorubso - Madan Valentine Gadjev, executive director of Gorubso – Madan, announced that BGN 300 thous would be invested in the construction of new railroad. He pointed out that the company has taken action to change the existing facility, which creates problems in the removal of ore. The rails are heavily worn and accidents occur often. The overall replacement of the underground rails will be done within a month. Experts review the whole trace in order to gather updated information on locations and extent of wear, the length of road, etc. So far only partial repairts of separate sections have been made, but an overhaul replacement is not done for 20 years.
Source: Stroitelstvo Imoti (28.09.2009)

Oleg Deripaska in $30bn Hong Kong flotation Directors of Rusal, the aluminium giant controlled by Russian oligarch Oleg Deripaska, are this week expected to approve a flotation valuing it at $30 billion. The deal will be one of the biggest floats of the year and, in a snub to the London Stock Exchange, will take place in Hong Kong. Rusal, the world’s biggest maker of aluminium, plans to list 10% of its shares on the Asian market and advisers at Credit Suisse and Goldman Sachs are ready to file a prospectus before the end of the week if the board gives the green light. While most of the global mining and metals groups are listed in London, Rusal is understood to have opted for Hong Kong partly because of a lawsuit in London in which Mikhail Chernoy, a former associate of Deripaska, is claiming more than $4 billion-worth of shares. The Asian bourse has also seen huge demand from Chinese investors and institutions for metals stocks. (The Times)
Source: Other (28.09.2009)

Deutsche Bank: Steel Production To Remain Sluggish In Europe Production in the European Union's all-important steel industry will remain sluggish in the coming years, a report released by Deutsche Bank said. The German firm also stressed the need for innovation in the steel making industry, in order for Europe to remain competitive against the booming rise of the Asia as a steel producer. Steel production is one of the key industrial sectors in the European Union. Across the EU-27, the steel industry currently accounts for around 6% of total industry turnover. Each year, the sector produces around 200 million tonnes of crude steel and currently employs roughly 400,000 people in the EU-27. From 1998 to 2007, the annual crude steel output in the EU-27 inched up by a mere 1% per annum to about 199 million tonnes, a rate of increase well below the world steel market average of 6% per annum. This nominal growth is because of the already high level of production in Europe and the declining importance of steel-intensive sectors. Per capita consumption in the EU-27 of around 370 kg is the highest in the world, as against a global average of 190 kg. (RTTNews)
Source: Other (28.09.2009)

Big business gathered at the office of the regional governor At the initiative of MP from GERB for the region of Pernik Vladislav Dimitrov, a meeting with big employers in Pernik took place on Monday. The meeting was held in the office of regional governor Ivo Petrov. The meeting was attended by leading companies in Pernik, such as Stomana Industry, SAMART-58, POLIDIAS, KOLHIDA METAL, Leko Co - Radomir, Best Technique, Radomir Metal Industries, Electric, Galko and Vento K. The goal of the work meeting was to bring light over the problems of local industry and to improve communication between the executive authorities and major employers. ‘The meeting was mostly familiarizing, to identify the problems faced by large enterprises, most of which are related to communication and energy resources’, Dimitrov said. These problems must be presented to the Minister of Energy and we will do it very soon. We have an idea to initiate a meeting between the Minister of Energy and large employers. The biggest problem for these companies are the high prices of energy resources, he said. Participants in the meeting agreed that they would continue to meet regularly every three months, the aim will be to improve communication between the Ministry representing real people associated with these problems and the owners of firms, Dimitrov concluded.
Source: SaPernik (30.09.2009)

Chinese steel output falls in September on overcapacity concerns Daily crude steel output in early and mid September in China fell on a monthly basis for the first time in recent months, since domestic steel mills were forced to cut output to survive the consecutive 7 weeks steel price declines and rebounding iron ore prices. Figures from China Iron & Steel Association show that daily crude steel output in mid September posted at 1.655 million tonnes off slightly from 1.67 million tonnes averaged in early September or down 11,000 tonnes from mid August. Crude steel production in China was on a record-breaking run during June and August and hit an all time high of 52.33 million tonnes in August up 22% on year. And the monthly output translates into annual production of 600 million tonnes fanning wide concerns about mounting up overcapacity pressure. (MySteel.net)
Source: Other (30.09.2009)

Taiwanese to build a plant at the seaside A Taiwan corporation plans on construction of a large modern plant for metals processing near the Black Sea. Business visitors from Asia arrived in Burgas to look for a suitable terrain for their investment. The businessmen have met several times with the regional governor of Burgas Konstantin Grebenarov. The investment would be at least EUR 1.5 mln. The planned plant would create over 100 jobs. The plant would be used for molding steel pipes, which would be exported to Europe. The investors need a terrain of about 3 hectares, which is 50 km away from Burgas Port at most.
Source: Standart (01.10.2009)

EU Fines Eight Italian Steelmakers 83 Million Euros European Union regulators reinstated a total of 83 million euros in fines against Riva Fire SpA and seven other Italian steelmakers for fixing the price of steel rods used in the construction industry. The European Commission reissued the penalties, which were first imposed in 2002, after a European court annulled the regulator’s decision in 2007 on procedural grounds. Riva Fire was ordered to pay a 26.9 million-euro fine. Lucchini SpA and its SP unit were fined 14.4 million euros. Six other companies shared fines totaling 42.1 million euros. Officials at Riva Fire and Lucchini didn’t immediately return calls seeking comment. (Bloomberg)
Source: Other (01.10.2009)

Metallurgical enterprises are worried about shortage of gas quotas Metallurgical enterprises expect to receive fewer allowances than the quantity stated previously, said the Bulgarian Association of the Metallurgical Industry (BAMI). The total volume of emissions that are granted by the European Union to Bulgaria is 42.3 million tonnes per annum for the period from 2008 to 2012 The allowed quotas are distributed between 140 large companies from all sectors of the economy. The National plan for allocation has been delayed for more than two years as it was disapproved twice by the European Commission. Brussels' main criticisms are related to the way of allocation. The latest version of the revised plan is expected to be finally ready by October 15, and after October 20, when the last session of the interdepartmental group will take place, it will be submitted to the Council of Ministers for coordination. Initially the plan provided that the allowances were divided by sectors, but the idea was dropped and now they are distributed to the entire industry. The quotas are divided between two main groups - existing businesses with proven emissions and expected investment projects which will come into operation by 2012. Currently a verification procedure of the future plans of companies is running. Companies provide information on what stage their projects are and if they can come into operation before 2012, they are included in the reserve by the previously set criteria. "When companies ask for a bigger reserve for future investments, there is danger of losing their emissions for the current capacity if they are not implemented," explained Executive Director of BAMI Politimi Paunova. Part of the metallurgical companies may obtain additional allowances from the reserve as early as 2009 because they have increased their capacity during the period, the Ministry of Environment and Water said. The branch organization recommends the interdepartmental group to develop equal criteria by which new players would be added to the plan. The Association supported the recovery plan for Kremikovtzi and consider that the enterprise should be included as a new project in the reserve allowance. Five metallurgical enterprises have made investments to reduce energy consumption - Aurubis Bulgaria, KCM, OTzK, Progress and Shamot. Additional allowances for new entrant have been asked by Stomana Industry, Promet Steel, Sofia Med, Alcomet and Interpipe, as they have already begun implementation of their projects. So far MEW has set quotas for 2008 expected to be 38,287,183 units. One allowance unit is equal to one tonne of emissions. "These quantities are sufficient to ensure that all production companies during the year are covered, but they would not allow the companies to participate in the global emissions trading," explained Milya Dimitrova, head of the Policy on Climate Change in MEW. Allowances for 2009 are expected to be in similar amounts as they will be calculated based on separate emissions in the period 2007 - 2008, as the higher of the two will be taken. The currently formed reserve for new projects, to be included in the quota allocation, is 30 million tonnes. They will relate to the period 2009 – 2012.
Source: Dnevnik (02.10.2009)

Mexican steel sector still not shown signs of recovery - Analyst Mexico's steel sector has still not shown signs of recovery following its crash last year along with the global economy. Mr Carlos Hermosillo analyst with local investment firm Vector said that "What we are seeing is how the industry hits rock bottom. The forecast is that recovery will take place in the near future. Next year we should see a clearer perspective on the sector's performance." He added that although some companies are announcing investments, this is not a sign of immediate recovery, since for these investments to evolve into production they must first pass through a long period of incubation, usually one or two years. According to Latin American Iron & Steel Institute, crude steel production in Mexican dropped by 30.1% YoY to 8.9 million tonnes during the first 8 months in 2009 and primary iron production fell by 33.8% YoY to 5.1 million tonnes during the same period. Steelmakers in Mexico include local company Ahmsa, Luxembourg based ArcelorMittal and Ternium, with its Hylsa and Imsa divisions. (BNamericas)
Source: Other (02.10.2009)

Kardzhali Municipality will sue OTzK for the systematic pollution Kardzhali Municipality will start legal procedings against the Lead and Zinc Complex (OTzK) for systematic air pollution, decided teh municipal councilors. Mayor Hasan Azis must set up a team of experts and lawyers to prepare documents for approaching the Attorney General's Office for prosecution on the proposal of the Standing Committee on Ecology and Eurointegration. The conclusion of ecology experts in the Municipality is that OTzK does not follow the standards laid down in the complex permit, issued to the company in 2006. The measures to comply with environmental standards, set out in the investment program to October 31, 2007, have also not been met. The company has been fined for monthly air pollution with dust, sulfur dioxide, lead and cadmium, as well as a one-time penalty for non-implementation of integrated permit conditions.
Source: investor.bg (02.10.2009)

Next year – at the carbon markets Despite the efforts of the new Ecology Ministry the trade can begin as early as the spring of 2010 (and only if Brussels approves the national plan for allocation by the end of the year). For 2007 and 2008, the companies have as much quotas as they have actually missed and are even. So 2009 will be the first year, in which companies will have a carbon deficiency and such with unused allowances for sale. The crisis hit a lot of production in the country and they will be able sell. Mood among most of the companies, however, is that it is more likely to keep the quotas for 2010 with the hope that the market will revive, and they will need the extra allowances. "Our goal is not to trade allowances, but with metals," commented Anton Petrov, a board member of Stomana Industry. "We hope to use the quotas. This would mean that we produce. If we have a surplus for 2008, we prefer to keep it and use it in the next year," he added. Politimi Paunova, Executive Director of the Bulgarian Association of the Metallurgical Industry is in the same opinion. "Currently the price of allowances is low. If you hurry to sell, then you may need to buy at higher price," she pointed out.
Source: Capital (05.10.2009)

I hope that will finally put the economy in order Anton Petrov, chairman of the Bulgarian Association of the Metallurgical Industry Mr. Petrov, is there any development of the markets? Metallurgy first felt the crisis, perhaps the first to see improvement? - This is the question that we ask ourselves: is what we see in recent months a trend or just a the result of traditionally strong September and October. Unfortunately, they are not better than the same months last year. I think the news for exiting the recession in many Western European economies has it influence, this gives optimism among retailers and manufacturers. I really feel more optimistic about market behavior. My personal opinion is, however, that the winter will be severe once again. You say that winter will be severe. Because of the expected higher natural gas prices? -. If there was an order in the country, these questions would not be asked as there would be market mechanisms, which would set the energy prices. No secrets hidden formulas, no black boxes, of which some price must come. I personally was very troubled by the claim of the the new chief of SCEWR, because I see shadows from the past, that heat will not be more expensive, but the price of electricity and natural gas will rise. Heat energy is derived from the price of natural gas. Who will pay the price of this heat? Will it be this industry? If it is in fact the industry, how long would it be competitive, paying others’ bills? This is lack of clear rules and order. Industry must survive, it has to be competitive, to create jobs. Especially regarding metallurgy, as it creates the basis of any subsequent industry. If there is no metallurgy, there cannot be machine building, it is a chain. Have you held meetings with the new minister of economy about the problems with energy prices? - A meeting has been requested. Bulgarian Association of the Metallurgical Industry and BIA have put these issues. However, the time from the inauguration of the new government is very short, there is some momentum, but we must not close our eyes to the errors. I believe we will be heard. Such subjective measures distort economic realities, and they always come back as a boomerang with a much more serious consequences. Everybody saw what were the consequences of unjustified decision made by Minister Dimitrov for Kremikovtzi and Heat Supply-Sofia. I do not know who would hold him responsible. Who will pay the natural gas burning in the chimneys of Kremikovtzi, who will pay the BGN 50-60 million loss of Heat Supply-Sofia as it is said that the price of heat in Sofia should not be raised? It will again be the industry. And what about the reduction in carbon allowances? - Metallurgy is a big energy consumer. But not only for metallurgy, for any production in the country energy will become an increasingly important element of competitiveness in the light of developments in energy prices and global environmental initiatives such as the Kyoto Protocol. But our situation is more severe, as our economy is still not as well prepared as is Europe. Here these issues can be fatal. If the reduced emissions quotas make the industries buy extra quotas, if energy prices continue to not be adequate to the market, how long would our economy be competitive? Currently, electricity in Bulgaria is more expensive than in Germany and Italy. The price of gas is twice higher than that quoted on the stock exchange in Germany. How long will it be possible to invest in this industry? What shows the distribution of quotas of carbon dioxide to 2012 for the future of metallurgy? - Òhe ministry of environment now acts very professionally and very transparently, so I hope it keep on doing so. We should try to allocate as reasonably as possible the available allowances so that we do not have to buy. We do not want quotas to sell, but we can not afford to purchase allowances. Now, according to the new allocation plan for the period 2008-2012, many enterprises would have to buy allowances. Whatsmore - large enough quantities to turn negative the situation in these companies. We prove new installations, pay the bills and hope that they will be considered. We also hope that it will be looked more deeply into energetics and quotas will not just be distributed based on requests to the TPPs, but will take into account renewable energy sources. Because if the thermal power plants receive the current allowances, they have no incentive to expand their production and make it more environmentally friendly, with lower emissions of carbon dioxide. On the other hand, the price they give the market is monopol because electricity is a regional market - whatever price they demand we ought to pay it. Effect on other industries is doubled. Because if energetics buy quotas, they would be included in the price and will be paid by us. On the other hand we can not divert the price of quota to our clients - metals are international product which is listed on stock exchanges at benchmark prices. And as a result of the new investments made in recent years in Bulgaria, metallurgy is already high-tech. It is no more the industry from 20 years ago. What is the labor productivity in metallurgy? - I can give Stomana Industry JSC as an example. When we entered the company by acquiring its shares in 2001, it had 2500 workers and produced 550 thous tons of metal. Before the crisis, and after opening the new plant, we now produced 800 thous tons with 1100 people. At present the capacity of the plant, which is not fully used due to the state of the markets, is 1.2 million tons with less than 1000 workers. In other words labor productivity increased several times. The new facility in Pernik has labor productivity above average in the EU - over 3000 tons per person. It is one of the most modern in Europe. This should be pursued, only in this way you can survive and be compete on the international markets. And in a market economy you have to be ompetitive, to be better in order to sell. Stomana Industry won Pari newspaper’s prize for socially responsible company to employees. What is the role of social responsibility in times of crisis? - Social responsibility is a way of thinking in our company. We do it as well in the name of higher competitiveness and prosperity of the company, understanding the role of human potential. This is the strength. Anyone can buy machinery and equipment, but if the team is not trained, motivated, enthusiastic, there's nothing you can do or you achieve it much more slowly. Now in a crisis we do everything possible to retain skilled staff. We keep producing at a loss just to keep the team. When, however, we have to release workers for us it is important that they continue to regard us as a good employer. So we offered a very good program for these people – we continue to pay their health insurance payments and meal vouchers for a certain period, have conversations with banks to ease their credits, have created a cooperative for flexible employment of these people that they look for opportunities. Are there any closed metallurgical companies because of the crisis in Bulgaria? - In Bulgaria, what is closed and is in process of liquidation is Kremikovtzi, not because due to the crisis. It was only the last drop, which led to the closure of the plant. The reasons are much deeper, it is a long story. Even during the biggest boom the company was at a loss, it was drained out and abused with for years. Fortunately, to date, there are no other companies in Bulgaria that the crisis has placed on the edge of bankruptcy or are in severe financial situation. But there are the neighboring countries. For example, in Romania the Arcelor Mittal plant has a lock on the door. So our goal is to make our business as competitive as possible. Only in this way we will have an even better future after the crisis. Do you think an investor for Kremikovtzi will be found? - It is a very hard moment, but after the crisis for a part of the plant might be. I do not believe that Kremikovtzi may once again have a producing blast furnace and coke chemical mill. First, the geography is such that it can no longer afford to carry cargo from ports 500 km away, this makes it uncompetitive. The second problem is its location near the capital. I hope that it will no longer be allowed to poison 2 million inhabitants of the capital.
Source: Pari (05.10.2009)

Crisis trampled metallurgical production by 30 percent The decline in the Bulgarian steel industry since the beginning of the crisis in the autumn of 2008, is about 30%. However, there are no bankrupt companies or such facing bankruptcy because of the tight markets. The only exception is the bankrupt metallurgical plant Kremikovtzi JSC, but the reason for the difficulties is not the crisis, but the bungle resale of India-based Global Steel. Steel Because of the stopped blast production in Kremikovtzi, steel production fell from 1.2 million tons in 2007 to 489 tons last year. At the same time Bulgaria’s other steel company - Stomana Industry JSC reported an increase in output by 149 tons to 839 tons in 2008. Once again due to Kremikovtzi, the positive trend of increased production of rolled ferrous metals and articles thereof, which has occurred over the past three years, is broken last year. The decline for the year is only 11.8% after Stomana Industry JSC, Burgas-based Promet Steel JSC and the Plovdiv-based Helios-Metalurg JSC reported increase in their production last year. However, for the first time Bulgaria’s steel industry reported a negative trade balance of BGN 865 million in 2008. It is offset by the good performance of non-ferrous metallurgy, in which the surplus last year was BGN 2.747 billion. Thus the whole Bulgarian metallurgy provide reported BGN 1.973 billion positive result from trade. Non-ferrous metals The Pirdop-based Aurubis Bulgaria JSC put into operation a new refinery for electrolytic copper with capacity of 180 tons per year and this increased by over 80% the production of copper cathodes in 2008. There is growth, despite it is weak, in the production of lead. In 2008 KCM produced 6 percent more lead, but at the other producer – Kurdzhali-based OTzK, there is a decline of 9%. The situation is similar in zinc production, again in both companies - KCM and OTzK.
Source: Pari (05.10.2009)

Kremikovtzi creditors may convert BGN 944.5m claims into capital Receivables of creditors of Bulgarian insolvent steel mill Kremikovtzi who wish to convert them into shareholders' equity have been priced at BGN 944.45 million, showed a triple expert evaluation commissioned in June. The struggling steel maker will raise its capital to BGN 963 million from BGN 18.5 million, if creditors decide to convert their claims into shares at their third get-together and approve the bailout plan proposed by the receiver, Tsvetan Bankov, in the summer. If given the go-ahead, the move will lighten the share of current major shareholders Pramot Mittal and the state. The government, however, will retain its influence through its monopoly gas, electricity and railway suppliers without which the steel maker cannot operate. The pricing of claims factored in the ranking of creditors by class and collateral so that some creditors will convert 100% of their receivables into capital, other will get shares with a par equal to 5% of the value of their receivables and a third group will stay empty-handed. Bondholders will count as majority shareholder of the debt-saddled factory upon voting of the plan. Their claim is assessed at BGN 780 million, or 82.62% of all claims eligible to convert into shares. Some of the claims of gas supplier Bulgargaz, railway operator BDZ and electric company NEK will exchange for their share equivalent, another portion will get only a 5% share cover and a small part will bring the companies some losses. Bankruptcy experts commented that creditors who landed at the bottom of the priority list along with those who refused to subscribe for stocks will probably get nothing if their receivables are not secured by a pledge on assets. Indian steel giant Arcelor Mittal is in the most advantageous position as it has acquired Kremikovtzi's EUR 18 million debt to Black Sea Trade and Development Bank securing a pledge on the mill's most precious asset - a hot roll equipment whose value is sufficient to cover nearly twice the receivable. Experts argue the recovery plan itself faces three major risks that may eventually lead to asset sell-out and liquidation. The first risk entails the unwillingness of the state to reschedule its receivables and its request for their immediate payment. A new confirmation of state aid and its repayment would jeopardise the bailout as would do the slow economic recovery plunging the mill into deeper losses. Meanwhile, two big corporates have showed interest in the ailing steel maker. Dnevnik sources said the one is a EU-based company and the other is headquartered outside the bloc but both are specialised in production through electric furnaces. One of the suitors want to acquire the plant via sell-out of its assets upon liquidation and the other is open to bailout talks. The same source said the cabinet could back a recovery package only if a reliable strategic investor shows up.
Source: Dnevnik (05.10.2009)

Radomir Metal Industries passed to a 4-hour working day, boss asked workers for a little more patience "We are preparing to operate, rather than close the business", said the company's CEO engineer Ludmil Alexandrov. Since the beginning of October, the largest industrial enterprise in the municipality of Radomir, Radomir Metal Industries JSC once again passed to 4-hour workday. According to Alexandrov, despite the positive signals coming from EU members and beyond, there is no chance that the crisis will finish until the end of this year. He asked the employees of the company to show a little more patience. The authorization to work at half-time is only for one month under the current legislation. According to Ludmil Alexandrov the only way to subdue the rising unemployment and companies to survive in this severe crisis, is the government to allow them to work at reduced working day. This would keep the staff, and companies would manage to stabilize. Alexandrov announced that the first signs of overcoming the crisis in the company are the increased inquiries from customers. Only after they are finalized as contracts it can be said that the company slowly but steadily starts to come out of the mud. After the lay-offs, the company now employs 574 people. Engineer Aleksandrov said that the management team is certain that there would not be any more lay-offs, as the best qualified and trained professionals and workers, needed for normal production process, have remained. Most of the production of Radomir Metal Industries is for export. The company has partners around the world, the main are companies in Norway, the Netherlands, USA, India, Britain, Germany, etc. Production of the company is intended for economic sectors of high importance such as energetics, shipbuilding, metallurgy, cement and chemical industries, heavy investment machinery, etc.
Source: SaPernik (05.10.2009)

Gulf steel markets to stay depressed A continued flood of cheap exports from Turkey and a looming glut of new output capacity in the Gulf is likely to keep Middle East steel markets depressed for years to come. GCC leaders have singled out steel making as a key means to build up heavy industry and diversify their economies but regional production has been hit hard by a collapse in demand as construction and infrastructure projects have been halted across the world. Official statistics showed that Turkish exports of steel rebar rose 22% in the January to March of the year compared to the same period of 2008, even as producers across the world slashed output. Mr Kerem Vaizoglu the export manager for Ekinciler Iron and Steel said that Turkish steel producers who have been accused of dumping in Egypt and Gulf markets will need to reduce output and curtail loss making exports to avoid bankruptcy. Mr Vaizoglu said that “The only way for Turkish mills to get out of this is to cut down the production according to the market situation.” Mr Vaizolu declined to characterize Turkey’s exports as dumping. (The National)
Source: Other (05.10.2009)

Bulgaria Lead and Zinc Complex Jsc Gets Permit for New Plant The leading Bulgarian non-ferrous metal producer, Lead and Zinc Complex Jsc (OTzK), has received permission for modernization and expansion of its facilities. OTzK has been granted a permit for building a new plant in the southern city of Kardzhali where its manufacturing operations are based. The execution of the projects provides for increasing the zinc production capacity by 40%, and reaching the highest zinc mark of 99,995. The new plant is expected to be constructed by the end of 2011. The project also involves modernization of the production with new environment-friendly technology which has already been purchased, and is worth EUR 40 mln. Bulgaria’s former Environment Minister, Dzhevdet Chakurov, from the DPS (Movement for Rights and Freedoms) party refused to grant a permit for OTzK’s expansion for three years. The majority owner of the OTzK JSC is Intertrust Holding, which is owned by the Bulgarian millionaire, Valentin Zahariev. In January 2009, Zahariev said his company would file a suit against the government over the blockage of the OTzK investment. He said the reasons for the delay were probably political.
Source: Darik Radio (07.10.2009)

1000 metallurgists with new jobs 1000 employees of the steel works Kremikovtzi and Port-Lom will learn for a new profession. The news was announced after yesterday's meeting of the National Council for Tripartite Cooperation. The successfully graduates will enjoy 6-month internships. 230 people will be provided funds to start their own business, and 270 laid-off would be paid for the transport to the new job. Financing of the measures for people affected by collective redundancies, is from the European Globalisation Adjustment Fund and the state budget.
Source: Standart (07.10.2009)

Copper mine to transform Mongolia Mongolia has positioned itself to become a large copper exporter, after it signed an agreement with multinational mining companies to develop an enormous deposit near the Chinese border. Mongolia’s economy and its social fabric – many Mongolians are semi-nomadic – stand to be transformed by the project, which would represent one-third of gross domestic product if it were operational today. Oyu Tolgoi, the copper-gold deposit in the south Gobi desert, is expected to produce 450,000 tonnes of copper per year after it is built and expanded over nine years at a cost of $4bn. That compares with 1.2m tonnes produced last year at Escondida, the Chilean copper mine that is the world’s largest. The agreement signed with Rio Tinto, one of the largest mining companies, and its partner Ivanhoe Mines, run by Robert Friedland, the Canadian mining entrepreneur, follows five years of negotiations over how to divide up the profits. Ivanhoe, which discovered the deposit, lobbied hard to overturn legislation passed by Mongolia’s fledgling democratic government in 2006 imposing a windfall profits tax on foreign miners. Mongolia’s parliament repealed the profits tax in August and revised other disputed laws around the same time, paving the way for the agreement. (FT)
Source: Other (07.10.2009)

Restart of Kremikovtzi will cost EUR 8 -10 million The amount that is required for the initial implementation of the recovery program of Kremikovtzi, is in the range EUR 8-10 million, said the President of Metalitzi federation at Podkrepa union - Ludmil Pavlov. According to Pavlov, this amount would help the metallurgical plant begin operations as a lot of the mills have stopped. Gradually, the necessary sum for each of the mills would become clear. Since the beginning of the year 1500 people have left the company at their own will, the same number has been laid-off. At present 3100 peoples work at the steelmaker. They are employed respectively in the plant for continuous casting, in the steel production plant and in the rolling mill for steel sheet.
Source: econ.bg (08.10.2009)

Alkomet sales fell by 33% in Q3 The annual rate of decline in sales of Alcomet PLC in the third quarter is 33 per cent to BGN 42.4 million, calculations based on corporate information show. For the nine months of the year to the end of September, net revenues from the sale are BGN 119.3 million, or 32 per cent less compared to the first nine months of 2008. Alkomet produces pressed and rolled aluminum products and alloys. It is to be seen in the formal report what the financial result of Alkomet JSC are in the first nine months. During the second quarter the loss of the company melt to BGN 345 thousand from the BGN 1.5 million loss in January-March 2009. The major shareholder in the company is Alumetal JSC with a share of 73.25% and FAF Metal Sanayii ve Ticarret, Turkey, with a share of 16.9%. According to data from the half-year report, the ratio price/sales is 0.31, price/account value is 0,95. Ratio price/profit is negative due to the losses for the past four quarters.
Source: investor.bg (08.10.2009)

Alcoa Reports Unexpected Profit on Cost Reductions Alcoa Inc., the largest U.S. aluminum producer, reported an unexpected third-quarter profit as it benefited from improving metal prices and saved money by cutting jobs and raw-material costs. Net income fell to $77 million, or 8 cents a share, from $268 million, or 33 cents, a year earlier, Alcoa said today in a statement. Sales dropped 34 percent to $4.62 billion. Alcoa, which posted losses in the past three quarters, cut 19,000 jobs since June 2008 as the global recession depressed demand and prices for aluminum. Chief Executive Officer Klaus Kleinfeld, who took over in May 2008, also announced plans in March to cut $2.4 billion in costs for items including raw materials and transportation by 2010. (Bloomberg)
Source: Other (08.10.2009)

Labour minister defends Kremikovtzi steel plant In crisis it is important for the three units of Kremikovtzi steel mill that meet all environmental requirements to continue operating. Thus 3,100 jobs will be preserved, minister of labour Totyu Mladenov said after a meeting of the group working on the plant's rehabilitation programme. For that purpose integration permits have to be issued.
Source: Pari (09.10.2009)

US mulls import penalties on Chinese steel pipes The US launched a probe to consider slapping almost 100 per cent tariffs on imported steel pipes from China in a move that could widen a trade spat between the two key powers. Washington has decided to "initiate anti-dumping and countervailing duty investigations on imports" of Chinese "seamless" pipes used to convey water, steam, chemicals, oil products and natural gas, the Commerce Department said. The pipes were allegedly backed by unfair subsidies. Dumping occurs when a foreign company sells a product in the US at less than normal value. Subsidies are financial assistance from foreign governments that benefit the production, manufacture, or exportation of goods. The Commerce Department's action came less than a month after US President Barack Obama imposed punitive duties on Chinese-made tyres, igniting the first trade spat of his presidency. An angry Beijing lodged a complaint at the World Trade Organisation and retaliated by launching a probe into possible unfair trade practices involving imports of US car products and chicken meat. (AFP)
Source: Other (09.10.2009)

Small shareholders can derail Kremikovtzi rescue plan The plan to revitalise Bulgaria’s ailing steel behemoth Kremikovtzi could be contested in court by minority shareholders and any other stakeholder over violation of rights guaranteed by the Public Offering of Securities Act (POSA), a check of Dnevnik showed. The legislation does not permit the proposed capital increase at the public company as it deprives minority shareholders of their rights to participate in the procedure in accordance with their holdings and on an even playing field. This was confirmed for Dnevnik by Nikolay Bebov of law firm Tsvetkova Bebov & Partners and two other legal experts with extensive experience in the capital market. But experts on company bankruptcies suggested that POSA, which protects the rights of minority shareholders, could be overridden by the Commercial Code regarding insolvency. In the summer of 2009, Kremikovtzi’s court-appointed receiver, Tsvetan Bankov, came up with a proposal to convert into shares the creditors’ claims worth around BGN 944 million. If the plan is put into practice, the company’s capital will be augmented from the current BGN 18.5 million into BGN 963 million, with bondholders controlling more than 81%. The project companies with POSA could not pass by the Commercial Code, according to Bobev. Sources close to bondholders told Dnevnik that legal action against the rescue plan by minority shareholders was discussed in the spring. Another scenario discussed by stakeholders has been making bondholders majority owners of the plant so that they can make a buyout bid for the leftover capital.
Source: Dnevnik (12.10.2009)

BHP-Rio Venture Should Be Blocked Rio Tinto Group and BHP Billiton Ltd.’s proposal to combine the iron ore operations of the world’s second- and third-biggest producers should be blocked by the European Commission, the World Steel Association said. “As an industry, we would not be at all happy with the proposed consolidation,” Ian Christmas, director general of the association, said. Members in the group, which includes 19 of the biggest steelmakers, produce 85 percent of global output. Rio and BHP in June agreed to combine their iron ore assets in Western Australia to save them more than $10 billion. An aborted takeover by BHP for Rio last year had faced an in-depth probe from the European Commission, which had “serious doubts” over a combination that would control more than a third of the world’s iron ore exports. Western Australia provides 18 percent of the world’s iron ore. Melbourne-based BHP had dropped the bid for London-based Rio citing turmoil in global markets, slumping commodity demand and Rio’s debt. (Bloomberg)
Source: Other (12.10.2009)

CITUB: Kremikovtzi to become a technology center CITUB officials believe that the future of the plant is related to its transformation into technology center by the model of the Dortmund project. Trade unionists believe that the state must act soon on the fate of the enterprise - at a time when there is only a month left until the meeting for the restoration plan. If the plan is adopted, the announcement for the liquidation proceedings should follow. According to Vasil Yanachkov, president of Metalitsi union, even if the liquidation is completed, a problem will remain and it is bigger. Partial solution to the problem, according to CITUB, is the urgent meeting of the creditors and the appointment of at least two more assignees in bankruptcy. Ministry of Finance should decide on the possibility of rescheduling the public obligations, ie money that the plant is due to the state. It is not clear whether the metallurgical plant will return the BGN 700 million aid to the state. Even if the recovery plan is adopted, in case the money is requested from Kremikovtzi, it would not operate. Meanwhile, even the sale of assets would not cover the needed BGN 2 billion.
Source: econ.bg (15.10.2009)

Big metal traders want registration VAT frauds are increasingly expanding on the metals market in Bulgaria, alarmed three of the country’s largest companies, which are subsidiaries of European and world leaders in production and trade in these commodities. ThyssenKrupp-Jupiter Steel, Klockner Metalsnab and Helios-Metal Center, which hold 60% market share in Bulgaria, insist on the state to intervene and put an order in the metals trade. For years the correct traders suffer from charlatans who make ostensible imports and exports with European countries, but the authorities do not take any actions, said Krassimir Sotirov, a managing partner at ThyssenKrupp-Jupiter Steel. After Bulgaria’s entry into the EU and the introduction of intra-community supplies, it became extremely easy to find businesses in Romania and Greece, which buy Bulgarian metal, but instead of exporting them, they sell them on the domestic market, explained the concerned entities. So, first, the fraud companies undercut the market with dumping prices - 20% lower, second, we cannot recover the accumulated VAT because the tax authorities, rather than looking for the offenders, prefer to take money from us, said Krassimir Sotirov. Third, the state loses non-enrolled tax in the budget. Only from one product group, e.g. reinforcing bars, not collected tax losses for the last year are BGN 5 million, assuming that the grey sector is 10%, said Georgi Nikolov, CFO of ThyssenKrupp-Jupiter Steel. According to him, however, the grey sector is much larger, which means that the state lost hundreds of millions of levs from the market of metals, which last year reached BGN 2 billion. In order to limit the fictitious import and export, the three companies insist on the tax and customs authorities to control the process by registering the border-crossing vehicles at the traders. This can easily be done by the customs authorities, said Kiril Vassilev, executive director of Helios Metal Center. The company has been expects for a year now the restoration of tax credit of BGN 1.1 million, and the revision is not yet complete. Metal traders plan to create their own branch chamber, because now some of them are members of either the Bulgarian Association of the Metallurgical Industry, or Bulgarian Construction Chamber. We want to introduce registration of firms trading in metals at branch level, similar to the building register, said Vassilev.
Source: Pari (15.10.2009)

U.S. Steel CEO unsure on restart of coke plant work U.S. Steel Chairman and CEO John P. Surma yesterday declined to disclose a date for resuming work on a $1 billion project at its coke plant in Clairton, telling industry officials that preserving cash during the recession remains a priority. Mr. Surma said the project, announced in November 2007, remained part of the steel producer's long-term plans. It would have replaced batteries of ovens that make coke, a fuel used in blast furnaces, with more efficient, environmentally friendly equipment. Labeled the largest construction project in the region since the building of Pittsburgh International Airport in the 1990s, the project was expected to create more than 600 construction jobs. U.S. Steel suspended work on it in April, saying then that it could not say when industry conditions would improve enough to resume work. U.S. Steel reported a first-half loss of $831 million. It is expected to report a third quarter loss when it reports third-quarter results later this month. (Pittsburgh Post-Gazette)
Source: Other (15.10.2009)

Xstrata walks away from Anglo bid Swiss-based miner Xstrata has announced that it has "no intention" of making an offer for rival Anglo-American. In June, Xstrata approached its rival with a view to a merger, but Anglo-American rejected the proposal. At the beginning of this month, the miner was ordered to make an official offer for Anglo by 20 October by the UK's Takeover Panel. Xstrata's chief executive said the company would "assess a range of alternative growth options" instead. "It is regrettable that [Anglo] immediately rejected our approach, without engaging with Xstrata to investigate the potential to create more value than either company could do alone," said Mick Davis, boss of the Swiss miner. But he reaffirmed his belief that a merger would be beneficial for both parties. "The compelling strategic rationale for a merger remains undiminished." He said a merger would result in savings of $1bn a year after three years. "Cost savings measures by either company alone simply cannot realise this value, nor deliver the associated strategic benefits," he added. (BBC)
Source: Other (15.10.2009)

Iron goes down again The market for ferrous metals trembles again. In August and early September the prices rose, but now they go down again. Currently a ton of reinforcing bars costs about BGN 700, VAT not included, against BGN 760 a month ago. Hot rolled coils have dropped as well - from about BGN 740 per ton to BGN 680. Demand is weak, confirmed the assignee in bankruptcy of Kremikovtzi Tzvetan Bankov. Winter is coming, and many of the manufacturers, that we sell to, lack funds, he added. We have a tough winter ahead of us as the budget payments reduced, estimates the head of Stomana Industry S.A.- Anton Petrov. The situation is worsened by phantom-companies that make fictitious export of metals to Romania and Greece. In fact, they sell the stock in Bulgaria, but about 10% cheaper, as VAT is not paid. This causes additional losses to the producers and the legal traders. The negative market trends are confirmed by the data coming from the Sofia Commodity Exchange (SCE). The price of ferrous metals falls because the crisis is still whirling around, said its chief Vasil Simov. In Bulgaria the exchange is used mainly for trade of ferrous metals scrap, steel, plates and shaped steel angles, but in 2009 the quantities are small. The hope of the producers is that Europe is emerging from crisis and will pull our economy out of the mud. The good news is that global markets for nonferrous metals have an enormous stir. The surge of copper in the first nine months of 2009 is over 200%. From USD 2800 per ton, the price currently is USD 6100, VAT not included. This is mainly due to the enormous consumption of metals in the Far East, mainly in China. "They seem unaffected by the economic crisis and construction there is going at a rapid pace. So I would not be surprised if the big investment funds shift their investment in non-ferrous metals, Vasil Simov added.
Source: Trud (16.10.2009)

Pirdop copper smelter nabs supply contract in China Cumerio Med, the Pirdop-based smelter owned by Belgian copper producer Cumerio, now a unit of German Norddeutsche Affinerie Thursday put pen to paper on a cathode copper supply deal with Chinese state-owned metals trader Minmetals, the buyer’s spokeswoman Michaela Hessling said. The six-year contract calls for annual shipments of up to 24,000 tonnes, which accounts for roughly 2% of the group’s total cathode copper output. Based on a copper price of USD 5,500 per tonnes, the company could earn approximately USD 800 million for the maximum volume of 144,000 tones.
Source: Dnevnik (16.10.2009)

China seeks independence in iron ore talks China’s top iron ore negotiator suggested that China, the world’s largest steel producer, may take a more independent path in setting term iron ore prices in annual negotiations, saying it would not necessarily follow other countries. Shan Shanghua, secretary general of the China Iron and Steel Association, who failed to secure the deep price cut he had pledged in this year’s still unresolved marathon talks, also reiterated his call for iron ore term prices to follow the calendar year instead of an April-March fiscal year. “We will not insist on other countries taking China’s iron ore price as a reference and we will not blindly accept prices agreed to by other countries,” Mr Shan told an industry conference. He also said miners offering large volumes of ore should be given favourable term prices, but insisted that all Chinese mills should adhere to a uniform price for iron ore. Friday’s conference unofficially kicks off the 2010/11 iron ore price negotiations, with analysts expecting a 10 per cent rise in term prices for the next April-March fiscal year as steel production picks up. Mr Shan said, however, that iron ore markets would be oversupplied next year as global steel production recovers slowly. (Reuters)
Source: Reuters (16.10.2009)

The way steel unfroze One of the signs of the economic crisis’ beginning was the deep sleep of heavy industry last year. Then Stomana Industry placed its workers into forced leave, and chimney-stacks of Kremikovtzi did not smoke. Less than a year after that, however, first signs the worst is over already exist. Sales of metal products are already 50% of last year’s (which was very good for business regardless of its end), and scrap trade reached 70% of its 2008 value. According to the industry, the final sustainable return of the 2008 levels will happen as early as the begging or mid 2010, when the demand on the European markets is restored. Data of the Bulgarian Association of the Metallurgical Industry show that in the third quarter, the industry performed well. Stomana has recovered its 2008 levels of production of liquid steel, and Kremikovtzi increased output of rolled ferrous metals. According to the Association, however, the situation can not still be taken as sustainable growth, since only the domestic sales have increased. A key indicator of the sector is the increased purchases of scrap for the production. Ever since March the trend is upwards. "The scrap market has recovered to approximately 70-80% compared with the turnover last year, we have orders for export," said Borislav Malinov, chair of the board of directors of one of the largest companies trading with metal waste - Nord Holding. In the words of Yoana Kehlibarova - Director for Bulgaria of Corrus, the world’s sixth biggest producer of steel and metal products owned by India's Tata Steel, the orders for metals increased since May-June. 'To tolling production of elements for engineering and transport recovered. Market expects the launch of the infrastructure projects", she said. According to her, in recent months many traders were able to dispose of production, purchased at high prices in 2008 and in most cases this did not report losses. Contributing to the excitement in the sector is somewhat the unblocked lending by banks. "They reviewed the financing of companies engaged in the use of metals. The fear of the crisis is being overcome and companies began to return to normal working levels," said Metody Ignatov, Executive Director of Klockner Metalsnab. Executive Director of Stomana Industry - Anton Petrov, is still cautious with the optimistic forecasts. "We have reached production levels of last year, but I think now the market is distorted - quantities accumulated before are being sold, there is seasonal demand because of the excitement in certain sectors of construction and machine building," he pointed out. Georgi Nikolov, financial director of Thyssen - Krupp Jupiter Steel, forecast that the real development of production will only begin when the big companies from Western Europe start ordering. According to him, about 30% of steel production and 5-10% of the metal products are sold in Bulgaria. "The internal market still holds a small share and has no significant impact on large producers. The sector is highly export-oriented," Nikolov noted. Estimates of the company are that companies will regain their previous volumes in the end of winter. "Good results in September and October are not yet a sustainable trend. The problems have not finished, but are at their end," commented Anton Petrov. According to him, there is no way to outpace the process of economic recovery in Western Europe and the orders of the commercial partners.
Source: Capital (19.10.2009)

China urges metals firms to build plants abroad Chinese producers of steel and non-ferrous metals should build plants overseas, said a senior government official at China's top planning body, the National Development and Reform Commission. China has long pushed a "go abroad" policy which has mainly translated into asset acquisitions by its cash-rich, state-owned firms. But domestic industrial growth has been far bigger, turning China into by far the world's biggest producer of steel and a leading or top producer of many other metals. China is now trying to trim capacity in many industries, including steel and base metals production, in an effort to tackle waste, pollution and excess supply. China's 2009 apparent steel consumption is expected to rise about 120 million tonnes from 2008, up 26 percent, according to the China Iron & Steel Association . (Reuters)
Source: Reuters (19.10.2009)

ESI in talks with Shadeed Steel in Oman Abu Dhabi's Emirates Steel Industries is in talks to acquire Shadeed Iron & Steel in Oman and a deal is expected to be signed by the end of November. A spokesman from Shadeed said that "There are talks going on right now but no final contract has been signed yet, we expect by the end of November a final deal will be signed." Mr Hussein Al Nowais chairman of Emirates Steel said that the deal would be part of Emirates Steel's expansion plan to boost its production from 2 million tonnes to 6.5 million tonnes annually by 2013 to 2014 through capacity expansions and acquisitions. Shadeed Iron & Steel, which is owned by Abu Dhabi based Al Ghaith Holdings has a production capacity of 1.5 million tonnes per year.
Source: Reuters (21.10.2009)

Copper industry expects recovery to start in the developing markets Copper industry expects the market recovery to begin in the developing markets led by China, shows the latest research of the international company Aurubis. The company owns the coppermaker near the town of Pirdop and concluded a six-year contract with the Chinese Minmetals last week, which is estimated to USD 800 million. At present, most participants in the global exchanges remain in a position to "wait and see". The price of the metal last month was about USD 6000 per ton, according to experts, which means that the bottom of the market has already been overcome. In September, import of copper in China has increased by 87% over the same period last year and 23% on a monthly basis to 399,052 tons. The reasons for this are the depletion of stocks in the country and the investment policy of the state, which is focused on infrastructure projects. Currently, the Asian economies, excluding Japan, officially have stocks of 167 thousand tons, declared on the commodity market. This, however, does not include the stocks of private investors, which can appear on the market at any moment. Experts estimate that 167 thousand tons are sufficient to meet the demand in the region for about six days. Managers of Chinese companies predict that next year the demand for copper in the country will expand further by 10%. This is supported by the premiums received by Chinese buyers – USD 80-85 per ton, related to the trading of nonferrous metals under an agreement with the Chilean company Codelco. Outside China the situation of the markets is not so clear. For the time being, all hopes are towards Japan and the United States. According to experts, the U.S. economy is still to be recovered. Industrial production in the country increased during the last quarter, but its results still remained 6% lower compared to the same period last year. Different trends are observed in Europe, currently the Germany economy shows good recovery signs, which is above the average trend for the continent. The European Commission has optimistic expectations for the strengthening of the market in the second half of 2010.
Source: Dnevnik (22.10.2009)

Miner sees record iron production Mining giant BHP Billiton has said that its iron ore production rose by a record amount in the third quarter. Production of the key steel-making ingredient rose by 11% in the June-to-September quarter to 30.1m tonnes. But BHP confirmed the world's fourth-biggest copper mine, Olympic Dam, would be operating at only 25% capacity for six months because of a damaged shaft. That has helped push up copper prices to a one-year high of $6,570 a tonne, and will also hit uranium supplies. The dam, in Australia, has the world's biggest-known deposit of uranium. It will not be back to full capacity until the first quarter of next year, the world's largest miner said. Analysts were disappointed that BHP also reported an 8% fall in copper output over the quarter. The Anglo-Australian firm forecast that copper production at Escondida in Chile, the world's largest copper mine, would increase by 5% to 10% for the financial year. (BBC)
Source: Other (22.10.2009)

Bondholders call for liquidation of Kremikovtzi steel mill A group of bondholders of Bulgaria’s steel behemoth Kremikovtzi have urged the government to shut down the ailing state-run plant before winding up its businesses and offloading its assets. At a meeting with economy minister Traycho Traykov and his deputy Evgeni Ivanov, bondholders proposed that the asset sale should be open to all types of investors including scrap and property businesses as well as steelmakers that would buy the assets without the plant’s mountain of debt. Bondholders claim they hold bonds worth a nominal EUR 91 million, or 28% of the issuance. They have singled out liquidation as the only possible solution involving no extra costs for the state and private creditors. Back in August, at a meeting with prime minister Boyko Borissov, finance minister Simeon Djankov and Traycho Traykov, another group of Kremikovzti’s bondholders put forward a rescue plant for the struggling company. The government said it could only greenlight the proposal if a major international company is attracted as a strategic investor. Bondholders, which are now the biggest creditors of the insolvent steelmaker, divided on whether they should try to bring the plant back on its feet or sell its asset back in the spring but the feud only surfaced in July. The rescue plan authored by administrator Tsvetan Bankov calls for converting bondholders’ claims into equity capital, a change in the terms of the bond contract, so it needs the nod of investors holding 75% of the issuance to pass.
Source: Dnevnik (23.10.2009)

EU steel market "stuck in slow motion" The European Union steel market remains subdued even after a likely return to growth in the overall EU economy during the third quarter, European steel industry body Eurofer said. Weak activity in the steel sector, hit by the worst economic crisis since World War Two, had resulted in a slump in demand as consumption fell 45 percent year-on-year in the first half of 2009 and by almost 32 percent in the third quarter. "While the economy probably reached a turning point, the EU steel market will remain stuck in slow motion for the time being," Eurofer Director General Gordon Moffat said in a report on the market outlook for 2009 to 2011. The industry body said a recovery forecast for the coming quarters would be slow and surrounded by uncertainty as the prospects for the EU's steel-using sectors -- such as automotive and construction -- remained subdued. Eurofer said a downward trend in orders at mills was bottoming as some customers returned cautiously to fill gaps in their stocks. An inventory build-up after heavy destocking in 2009 would lead to a "technical" recovery in steel demand, Eurofer said. The report showed that, while year-on-year output growth should turn positive in the second quarter of 2010, it could take until 2011 for a more pronounced rebound in output to begin.
Source: Reuters (23.10.2009)

Steel prices unlikely to go up in November India’s largest steel maker SAIL said that steel prices are unlikely to go up in November. Mr SK Roongta chairman of SAIL said that “Let’s wait and see what happens in November, but it is unlikely that steel prices would go up.” Mr Roongta said that the domestic steel consumption in 2009 is likely to grow by 9%. Earlier Mr Virbhadra Singh minister of steel urged the industry to let steel be available at affordable prices in order to boost consumption in the semi urban and rural areas. Mr Singh said that “One of the major reasons for our low per capita steel consumption is the lack of focus on vast rural sectors. For steel to be acceptable, in preference to other replacements, the common man must find that it is affordable and is cost effective. In this regard, the stability of price of steel in the market plays an important role, steel producers must keep this aspect in mind.” (Business Line)
Source: Other (26.10.2009)

OTzK invest EUR 120 million in its production Ministry of Environment and Water issued a decision approving the implementation of the investment proposal for the modernization and expansion of the zinc plant through a new frying mill, a new system for sulfuric acid and a new electrolyte mill. Investment for the new zinc plant are over EUR 85 million, of which EUR 36 million have already been invested. The majority owner Intertrust Holding will take actions to accelerate the implementation of the project. The first phase includes construction and building part of the workshop for electrolysis, should be completed by March 31, 2011, and the full implementation of the project is planned for the end of 2011. With its implementation, the capacity for zinc production would increase by 40% and will be able to produce the highest grade of zinc - 99.995. The deadline for payback of the investment is 5.5 - 6 years. For the modernization of the plant by implementing Ausmelt technology, a report evaluating the environmental impact was submitted to the MEW on September 10, 2009. The deadline for implementation of this investment is 24 months after the approval of MEW, and the necessary funds are EUR 30-35 million. The period for redemption of the investment is 6 - 6.5 years. The implementation of the two projects would ensure all the requirements for work and environment, emissions of dust, heavy metals and sulfur dioxide would be reduced several times under the allowed levels.
Source: profit.bg (27.10.2009)

Machine building brought to knees The government should declare a temporary moratorium on electricity prices as an anti-crisis measure, machine building companies suggest. This is one of the most heavily crisis-hit sectors, as most manufacturers are export-oriented companies. We have no other option for cutting expenses but staff downsizing, Radomir Metal Industries CEO Lyudmil Alexandrov said. The enterprise has halved its staff to 600. Lay-offs in the metallurgical industry have reached the technological minimum, the Bulgarian Branch Chamber of Machine Building (BBCMB) warned. Some 27 workers have been made redundant over the past year out of 143,000 employed in the sector. Many specialist have quit because of low pay. The lack of qualified workforce seriously reduces the chances of enterprises to overcome the crisis, BBCMB chairman Ilia Keleshev pointed out. Machine building needs a lot of time to come out of recession and train its staff. Expensive energy is a key problem for companies in the sector. The profit margin of National Electric Company and Bulgargaz should be limited to 2 or 3% during the crisis, suppliers' profit should be up to 5%, the industry insists. The government should put an end to the practice of companies subsidising the cheaper electricity for households. Natural gas pricing should reflect the current rates on the international markets and not lag nine months behind. The procedure for free access to the electricity market should be eased.
Source: Pari (28.10.2009)

U.S. Steel loses $1 billion so far in 2009 U.S. Steel Corp. said Tuesday that it lost more than $300 million in the third quarter and more than $1 billion so far this year - and another loss likely will come in the fourth quarter, although the global economy is in the early stages of a recovery. The Downtown-based steelmaker said orders are improving, and it has restarted mills idled earlier this year because of the recession. CEO John Surma said yesterday, however, that "downward trends remain" and that U.S. Steel is entering its seasonal slow period. Six of the company's seven steel-making facilities in North America are back on line. The exception is its Lake Erie Works in Canada, where U.S. Steel's contract with the United Steelworkers has expired, Surma said. Although U.S. Steel predicts improvements in the fourth quarter - driven by the automotive industry and strength in the tin-mill market - it expects to report another loss because of low operating rates and costs for idled facilities, said Gretchen Haggerty, chief financial officer. U.S. Steel said it lost $303 million in the third quarter ended Sept. 30, compared to a profit of $919 million in the same period a year ago. (Tribune-Review)
Source: Other (28.10.2009)

Elatsite-Med obtain another authorization for research of metal ores Mining company Elatsite-Med JSC has received another permit for the exploration of the area Selski Vrah, announced the Council of Ministers. Over the next three years the company will seek opportunities for mining of metal ores. The terrain for exploration is located on 14,250 square kilometers in the territory of the municipalities Makresh and Belogradchik. For the entire period of the permit it is expected Elatsite-Med JSC to invest in geological activities about BGN 358 thousand. Currently Elatsite-Med have signed concession agreement for the extraction of copper deposit Elatsite. The company will pre-empt the copper and gold ore for 22 years, starting 1999, according to the National Concession Register. Moreover, the company has permission to study the surface metal resources at Elatsite-Pirona for 3 years.
Source: Dnevnik (29.10.2009)

China Minmetals urges industry leaders to diversify iron ore sources China Minmetals, the country's largest state-owned metals trader, has urged industry leaders to diversify iron ore supply and improve negotiation tactics to reverse China's unfavorable position in global iron ore deals. Chinese steel mills seeking lower prices of iron ore should think more about reducing dependence on the three global miners, said Zhang Ye, vice-general manager of China National Minerals Co Ltd, a wholly owned subsidiary of China Minmetals. His remarks come at a time when China's steel industry is facing a de facto breakdown in iron ore negotiations for the year, while the outlook for next year's talks seems gloomy at best. The three global miners, Brazil's Vale SA, Australia's Rio Tinto and BHP Billiton, contributed to about 50 percent of Minmetals' iron ore trading volume. But the company is looking to diversify its iron ore suppliers, Zhang said. Minmetals will expand its list of buyers from the current five, which include Ukraine, Chile and Russia, to eight next year. The targeted iron ore suppliers will be from North and South America. (Xinhua)
Source: Other (29.10.2009)

Kremikovtzi is on the brink of liquidation The chances for saving Kremikovtzi almost disappeared after the largest private creditors – the bondholders decided not to support the recovery plan. Their Monday vote had to decide whether to give their emission with a total nominal value of EUR 325 million and the interest in equity and to bring the company on its feet. Preliminary results state that the rescue plan is supported by bondholders with EUR 62.2 mln or 19.1% of the par value. "Against" votes were given by the owners of bonds with a par EUR 172.3 million, which makes 53% of the entire issue. The main reason for this decision made by the largest private lender is the lack of support from the government. A key element of government support is the prolonging of the public state receivables. However, this has not happened so far, although the proposal was sent to the Finance Minister in July. Thus the legal options are two. In one case, the Finance Minister may approve the prolonging of debts and a meeting of creditors to take place. Another scenario is the absence of consent by the Minister by 12 November and then the court to declare "bankruptcy" in closed session. This means termination of all operations and sale of assets - as a whole or of separate parts. Technically, everybody would be able to bid - steelmakers, investors in real estate and any private companies. It is even possible to maintain steelmaking, but if that happens, experts say it would be in much smaller scale than before the problems start.
Source: Dnevnik (30.10.2009)

Aurubis to pump BGN 3.6m into clean energy generation Aurubis Bulgaria will inject around BGN 3.6 million to install a 10 MW capacity at its copper smelter that will produce electricity from residual heat, said Nicolas Treand, chief executive of the local division of Germany’s Aurubis, the biggest copper producer in Europe. Speaking at the Green Innovation Forum staged by Dnevnik daily and Business & Ecology magazine in Sofia on Thursday, Treand said that heat during the production process is released not through fuel burning but through chemical processes. It will be used to drive steam turbines that will generate green power to use onsite and meet 25% of the electricity needs. The project is expected to deliver annual savings in the range of EUR 3 million and 5 million. It should be completed within a year. According to Treand, the technology has so far only been deployed in Sweden. Unlike more conventional renewable energy methods, it is less expensive and can produce intermittent electricity. Aurubis warmed up to the green idea in the late nineties, when it poured between EUR 40 million and EUR 50 million into low-carbon technologies each year. Now it invests between EUR 5 million and EUR 20 million. E-waste management is at the front seat in the company’s environmental strategy, which sees 20,000 tonnes of copper scrap being treated at its Bulgarian facility in Pirdop, 80 kilometres north of the capital Sofia. The group spends EUR 5 million to 12 million on energy efficiency technologies a year.
Source: Dnevnik (30.10.2009)

Bulgaria's Economy - Most Polluting in EU Bulgaria has the most polluting economy in the European Union, according to a 2007 report by the International Agency for Environment Protection (IAEP). In the eve of the Council of Europe summit in Brussels where considering the needed steps to tackle climate change will be high on the agenda, DPA has released IAEP information regarding the CO2 levels emitted by Bulgaria for the manufacturing of production worth 1 dollar. According to IAEP, Bulgaria's economy is the most harmful to the Union's environment as it produces 2.73 kg of CO2 while making a buck. Sweden - claimed to be EU's cleanest economy - releases only 0.16 kg of CO2 in the atmosphere. France comes second after Sweden with 0.253 kg of CO2 per dollar.
Source: Standart (30.10.2009)

Rio reinforces enthusiasm for BHP venture For all the talk in the market about the possibility of Rio Tinto abandoning its proposed iron ore joint venture with BHP Billiton, Rio's management team could not have made it clearer to investors and analysts that it was committed to the deal. ''I think they were emphatic [about sticking to the deal],'' one fund manager said after Rio's investor presentation and lunch in Sydney. ''I was left in no doubt.'' During the presentation, Rio chief executive Tom Albanese said the joint venture could deliver $US10 billion or more in cost savings, which were ''without peer'' in the mining sector. Rio and BHP have been talking about a transaction like this on and off since 1998, so it is hardly a revolutionary idea. Rio has also quietly been putting infrastructure in place to ensure the combination goes smoothly. Apparently, its remote operations centre in Perth already has provisions in place to add BHP's mines to the mix. (Business Day)
Source: Other (02.11.2009)

Egypt considering new rebar mill Egypt's state owned Metallurgical Industries Holding Company is considering participating in EGP 5 billion project to produce steel rebars. Mr Mahmoud Mohieldin investment minister of Egypt said that the project would help meet fast growing demand for construction materials in Egypt, especially from real estate development which is expanding despite the economic slowdown in other parts of the world. Mr Mohieldo said that "Despite the financial crisis and its consequences, this sector has been able to grow at rates of between 14% and 15%. This is in addition to the increase in the annual demand for residential units, which is now 350,000 to 450,000 units." Holding company officials said that EGP 630 million of investments would also be made in state owned aluminum producer Egyptalum to modernize some of its production lines.
Source: Reuters (02.11.2009)

Alkomet reported a profit of BGN 819 thous in the third quarter Shumen-based enterprise for production of rolled aluminum Alkomet JSC reported a net profit in the third quarter of BGN 819 thous, the company report showed. In the first quarter Alkomet announced a loss of BGN 1.5 million and in the second the loss was BGN 345 thousand. The total loss for nine months is BGN 1 million versus a profit of BGN 3.4 million in January -September 2008. Net sales revenue for the first nine months of the year are BGN 121.2 million, 32% down from the comparable period a year earlier. Physical volume of actual stock decreased by 12% YoY during the reporting period to 30 217 tons. "The estimates are that the recovery of sales of all products would reach their 2008 levels until the end of 2009", the company said.
Source: investor.bg (02.11.2009)

The decline in sales of OTzK slows to 31% in third quarter Net sales revenues of Lead&Zinc Complex JSC (OTzK) for the third quarter is BGN 33.6 million, down by 31 percent over the same period last year. In the second quarter the decrease in sales was 37 percent, while in the first - 30 percent on an annual basis. The total sales revenue for the nine months is BGN 87 million, or 33 percent less than the same period last year. Profit on a net basis in January-September is BGN 2 million from a loss of BGN 9.9 million a year earlier. In the third quarter the company's profit is BGN 323 thous compared to a BGN 11.9 million loss in July-September 2008. In the first nine months the positive net operating cash is BGN 15 million, with most of it used for payment of loans.
Source: investor.bg (02.11.2009)

Prohaski: State indecisiveness caused the rejection of the plan for Kremikovtzi And fluctuation of the old and the new government in reorganization of Kremikovtzi is the main reason for the bondholders, which are the largest creditor of the company, to reject the recovery plan, said economist George Prohaski, who until recently represented the bondholders in Bulgaria. According to him the only option for the plant is to to accept the move towards liquidation and cashing of the assets of Kremikovtzi. According to Georgi Prohaski, an investor can be found, who will offer for a part of the plant in order to continue working. "There are clear steps that should be taken in order to persuade creditors to pass on the idea for transition of their claims into shares: refusal of the state receivables from the 90s, restructuring of the public debts, which can be transformed into shares , termination of the proceedings to change the date for declaration of insolvency. If these three steps had been made, the bondholders would have probably voted for the recovery plan. I no longer see another possibility but the court to confirm the liquidation", said Prohaski and added:" In 10 years you will still read about an auction for the assets of Kremikovtzi. I am sure that the liquidation and sale of assets of Kremikovtzi will not last less than 10 years".
Source: Darik Radio (03.11.2009)

Kremikovtzi with BGN 254 million loss for the six months Kremikovtzi JSC has generated BGN 254.3 million loss for the first six months of 2009, the company report indicates. Annual loss increased by 51.2%. On 15 May this year the natural gas supply stopped at Kremikovtzi and the blast furnace died forever since there is no technological way to be started again. The company reported net sales of BGN 40.6 million during the half year of 2009, down by 89% YoY. Operating costs to June are about BGN 421.3 million, of which BGN 85.1 million interests and BGN 72.1 million for materials and external services. As to June 30, 2009 the company's equity is negative amounting to BGN 526 million. In the period from sales of its final goods production, the company generated revenue of BGN 25.14 million. The revenue from the sale of materials and spare parts is BGN 7.12 million. Revenue from rentals and other services amounted to BGN 8.34 million as to December 31, 2008. The average number of employees of Kremikovtzi JSC is 5190 workers. Preservation of certain manufacturing facilities and other operations with minimum safe production system has led to a reduction in the number of employees at the company down to 3 865 people as to June 30, 2009.
Source: investor.bg (04.11.2009)

OTzK can be closed Lead and Zinc Complex (OTzK) – Kurdzhali can be closed if in the end of 2009 the plant has not taken measures to reduce its harmful emissions. This was announced at a round table for solving environmental problems in Kurdzhali, which involved the deputy minister of ecology Evdokia Maneva. OTzK presented the implementation of its investment program for solving environmental problems. The Ministry on its behalf presented the necessary measures for reduction of the emissions. Executive Director of OTzK – Slaveya Stoyanova said the plant's investment program provides for modernization of the zinc production (by the end of 2011) and the production of lead (to 2012) and in 2010 the construction of a waste depot.
Source: Standart (04.11.2009)

CITUB support MEW for Gorubso 60 people stopped work for an hour and held a meeting in the courtyard of Gorubso-Kardzhali JSC to support the decision of the Ministry of Environment and Waters to approve the investment plan for processing gold-containing ore by cyanide technology. We stand behind Minister Nona Karadzhova, because it gives us the opportunity to work and live normally, workers said. The new officials at MEW demonstrate determination to resolve and finally launched the project. CITUB therefore stands behindthe position of the environment ministry, reads an official letter of Dr. Zhelyazko Hristov, chairman of CITUB, to the protesters.
Source: Standart (04.11.2009)

Steel glut tipped to worsen The China Iron & Steel Association warned that steel production in the world's third largest economy would rebound 10 per cent to about 550 million tonnes in calendar 2009. That's roughly equivalent to China's full steel producing capacity in 2007, before the crisis in the international banking system hit the global economy. "The oversupply problem will be worse if China's steel output exceeds 550 million tonnes," CISA said in a statement published on its website. High domestic production and lower exports were already having "a huge impact on the domestic market," it added. The worsening supply-demand imbalance spells bad news for the Australian miners that supply iron ore to China's steel mills. And it is a negative for the broader economy, with exports from WA's iron ore mines forecast to reap the nation about $25 billion in the 12 months to December 31. Iron ore prices have already fallen by one-fifth in the past three months, as Chinese steel production swamps demand created by Beijing's $586 billion fiscal stimulus package. (Herald Sun)
Source: Other (04.11.2009)

Production of ferrous metals down by half For the first nine months of the year the production of ferrous metals in Bulgaria has decreased by half as compared to the same period of 2008, according to figures of the Bulgarian Association of the Metallurgical Industry (BAMI). The only metal growing is copper and in the period production in Bulgaria is 220 500 tons of anode copper and 142 867 tons of electrolyte. For comparison, during the same period of 2008, it was respectively 206 258 tons and 76 265 tons. The reason for the increase was the released in 2008 new refinery for production of cathode copper of Aurubis Bulgaria. The country no longer produces pig iron after the shut down of blast furnaces in Kremikovtzi. The volume of liquid steel production decreased by 51% to 541.8 thousand tons. During the same period the decline of manufacturing in EU countries is by 39.3%, data of the experts showed, while the global reduction is about 16.4%. The main reasons for the decline is the reduced production at Kremikovtzi and Stomana Industry. For the first nine months of the year, the largest decline is of the production of flat products - more than 3 times down over the same period of 2008. For the first six months of the year the industry registered a 40% drop of sales. The most severe was the situation back then in production of basic metals for shipbuilding. Besides the economic difficulties associated with the crisis, the industry remains facing the problem with energy and electricity prices. A day before the day of the metallurgists - November 5, the president of the Bulgarian federation of industrial energy consumers – Konstantin Stamenov met with Deputy Minister of Energy Maya Hristova. Besides the metallurgical companies, in the organization are included companies from other sectors of the heavy industry including mining and pharmacy. Experts of the Federation will participate in work groups of the Ministry, currently developing a new law on energy and new energy strategy of the country. Metallurgical companies plan to continue their investment plans despite the crisis, BAMI assured. Currently, Stomana Industry continues the reconstruction of its third electric furnace and the installation of a new bag filter. Bourgas-based Promet Steel has invested EUR 4.8 million in two new packaging machines since the beginning of the year. Reconstructions are currently taking place in the two lead and zinc producers - KCM and OTzK. New machines were released by Sofia Med and Alcomet this year.
Source: Dnevnik (05.11.2009)

Lead and Zinc Complex may be shut down due to eco standards If Lead and Zinc Complex JSC does not suspend the regular air pollution in Kardzhali, the European Commission may initiate penal proceedings against the state. This became clear during the visit of Deputy Minister of Environment and Water Evdokia Maneva in the city. Representatives of MEW stressed that they will have to reduce production of the plant since January 1, 2010. Meanwhile LZC is finally ready to launch its investment program of EUR 120 million, according to which until the end of 2011 the most modern zinc plant in Europe will be launched, which will provide cleaner air for Kardzhali.
Source: Monitor (05.11.2009)

EUROFER report on EU steel exports EUROFER's October report on the Economic and Steel Market Outlook 2009-11 shows that in the second quarter of 2009, export deliveries by EU 27 mills to third countries fell by almost 14% YoY and by 18% in H1 of 2009. Since imports fell more sharply than exports, resulting in overall lower imports than exports, this implies that the EU became a net exporter of steel products in this period. Especially long product producers have been able to find some compensation for the sharp decline in demand from the domestic EU market in other regions such as North Africa and the Middle East. While this situation probably continued in the third quarter of this year, the trend is expected to reverse in the final quarter of this year. The main reason for the EU becoming a net importer again is the anticipated rise in third country imports. Meanwhile, actual export volumes are not seen increasing significantly in the 2010-11 period. The latest forecasts from EUROFER’s Economic Committee show exports rising by only 1% in 2010 and just below 7% in 2011 in tandem with improving demand fundamentals in international export markets. (Steel Guru)
Source: Other (05.11.2009)

Another 100,000 laid off by end-2009 The number of the registered jobless in Bulgaria already exceeds 300,000, after another 7,000 people were laid off in October, minister of labour and social policy Totyu Mladenov said. When the crisis started to gain speed a year ago, the total number of the unemployed was 216,640. The unemployment rate reached 8.23% in October, rapidly up from 8.03% in September. The statistics, though, does not take into account the people dismissed in the grey sector. The Bulgarian Industrial Association (BIA) counts some 160,000 workers in the unofficial economy. Undeclared unemployment may have reached 13 or 14% already, BIA said. The figure does not include the 170,000 or so discouraged unemployed. The notifications for mass lay-offs submitted in the past three months are yet to be fulfilled. A total of 30 enterprises warned in October that 2,500 workers will be made redundant. Construction companies are expected to dismiss 35,000 people by this year's end. State-owned railway carrier BDZ will lay off about 2,000 people. Staff reduction in Kremikovtzi steelworks will most probably not affect only 3,000 workers but all the 5,000 employed. Machine building enterprises have also said they do not have any reserves left for cost reduction except for discharging qualified staff. The biggest employer, the state, has not yet officially announced its plans for mass lay-offs. The exact number will be clear in December, minister Mladenov told the Pari daily. If the 15-percent downsizing suggested by finance minister Dyankov materialises, some 15,000 public employees will join the army of the jobless. Unemployment will not top 9.5% at the end of the year, Mladenov said. However, trade unions and employers' organisations believe the share will be well above 10%, because between 80,000 and 100,000 workers will be sacked by this year's end. The government projects an 11.4% unemployment rate in 2010.
Source: Pari (09.11.2009)

Steel Authority Plans Mill in Ore Battle With Mittal Steel Authority of India Ltd., the nation’s biggest state-run producer, plans to build a 10 million metric ton steel mill in expectation of beating ArcelorMittal for the rights to control the nation’s biggest iron ore reserves. Sites for a plant to exploit the Chiria deposit in Jharkhand state are being shortlisted, Chairman S.K. Roongta said. Steel Authority, which won back the right to half of the 2 billion deposit last month, is battling ArcelorMittal, Tata Steel Ltd. and JSW Steel Ltd. for control of the rest of Chiria. The deposit, with iron content of as much as 65 percent, according to the steel ministry, was stripped from a Steel Authority unit in 2005 because it hadn’t develop the block. “Anyone who wants to put up a large sized plant is looking for a big deposit instead of fragmented ones,” said A.S. Firoz, an independent steel analyst and former chief economist at India’s steel ministry. “Chiria is attractive as its one of the few large deposits available in Jharkhand.” (Bloomberg)
Source: Other (09.11.2009)

Some state companies have rejected the recovery plan for Kremikovtzi There are state-owned companies, which also rejected the recovery plan for Kremikovtzi. There are ones that have adopted the recovery plan, said the assignee of bankruptcy Tzvetan Bank. According to him, not earlier than Wednesday it will become clear how many of the creditors supported the plan and whether it could be adopted. Although the deadline expires today, the union will wait until then for letters postmarked from the November 9, before processing the final results. Bondholders, who are the largest private creditor, have rejected the opportunity to capitalize on their claims. If the company's recovery plan is not adopted, a liquidation proceedings will be initiated.
Source: Insurance.bg (10.11.2009)

Bulgaria’s Economy Minister Calls for Liquidation of Kremikovtsi “The best possible option for Kremikovtsi is a procedure for the plant’s liquidation,” Bulgaria’s Economy and Energy Minister Traycho Traykov said during his report on the first a hundred days of the government. This is necessary because the plant has turned into a fake industrial structure, it has accumulated considerable debts to the state energy utility NEC (13 million levs as of August this year) and to the railway carrier BDZ. Mr. Traykov said further that the plan for the plant’s liquidation had been coordinated with the bondholders, but its implementation might take years.
Source: Standart (11.11.2009)

Traykov: The only real alternative to the Kremikovtzi is liquidation Liquidation of Kremikovtzi is the only real alternative for the plant, said Economy Minister Traycho Traykov only a day after the deadline for company's creditors to declare their position on the recovery plan. The largest private creditors rejected the possibility for recovery of the plant. The State has missed many golden chances to intervene in the fate of Kremikovtzi, said Traykov. "We were wondering why when ArcelorMittal had 30 experts in Kremikovtzi and wanted to buy the steelmaker last year, it did not happened", the minister said. Because of this, in the words of the minister, the plant has turned into "fake industrial entity", which dragged down many other companies. Since August only the metallurgical plant has accumulated another BGN 13 million debt to the National Electricity Company. BDZ transports for Kremikovtzi and expects to get money for it, but will also not receive it. Ministry of Interior guards the trains and also expects to receive money for it, but will not get such, the minister said. Because of this, the future of the plant is liquidation. "By the judiciary we will have to establish transparency, fairness and legality of the liquidation. This will be a process that will last a long time", said Minister Traykov.
Source: vesti.bg (11.11.2009)

China to boost mergers in steel sector China will encourage mergers and restructuring in the steel sector to help forge three to five producers with sharp international competitiveness, said the Ministry of Industry and Information Technology in a statement. A total of six to seven leading steel producers will be encouraged to implement strategic mergers and restructuring across the country, according to the Guideline to Promote Steel Sector Mergers and Restructuring. The guideline was made to tackle domestic steel sector's structural problems like low industry concentration and high percentage of backward production capacity, the statement said. The ministry also mapped out Steel Sector Admittance Requirements. It intends to regulate steel enterprises through enforcing standards on product quality, environmental protection, energy consumption, comprehensive utilization of resources and production scale. The ministry will publicize a list of enterprises that meets these standards. (Xinhua)
Source: Other (11.11.2009)

16 local companies among the best in the region 16 Bulgarian companies enter Top 500 companies in Central and Eastern Europe based on turnover. The ranking is made by the global leader in information and management of receivables Coface. The report is prepared annually on the basis of net sales turnover in EUR of firms from 13 countries in the region. The leading Bulgarian company is LUKOIL Neftochim, which is on 23rd position. Among the top CEE companies are also copper giant Aurubis, Metro Cash&Carry Bulgaria, Stomana Industry, etc. Kozloduy NPP is on 414-position. Turnover of the largest native firms is EUR 15,564,105,120. This is 2.9% of total turnover of the companies in the top 500, which amounted to EUR 542.1 billion. The 10 largest companies in Central and Eastern Europe are in Poland, Hungary, Czech Republic, Ukraine, Slovakia and Lithuania. Traditional "engines" of the region's economy in 2008 remain the extraction, processing and trade in oil and other fuels, energy, automotive, telecommunications and trade.
Source: Trud (12.11.2009)

Kremikovtzi blocks Sofia on Monday Workers from Kremikovtzi will start blocking Sofia periodically next week. This is the answer of the metallurgists against the economic minister Traicho Traykov forecast that the plant faces liquidation, because the creditors do not accept the recovery plan. After the Cabinet meeting yesterday Traykov was more evasive. "The most responsible thing the state can do is to consider all options for future action, but if it comes to liquidation, it can be done in the normal way, and " chaos not to explode in Sofia field and people end up on the streets, noone knowing what happens". Meanwhile, however, the Ministry of Environment and Water commented that the recovery plan for Kremikovtzi is completely illegal, as the plant has not received the necessary permits.
Source: Sega (12.11.2009)

Court turns down EIA for Chelopech Mining gold project Bulgaria’s Supreme Administrative Court (SAC) rejected at first instance the environmental impact assessment (EIA) by Chelopech Mining, the local unit of Canada's Dundee Precious Metals, to expand its gold extraction project and the construction of a processing facility in Chelopech. The lawsuit was filed on a complaint by NGOs. The court rationed the ruling with the absence of evidence that the proposed technology was the optimal; the absence of environmental impact assessment of all nearby areas; and the long period between preparation of the EIA report and approval by the environmental ministry. The company plans to appeal against the court decision.
Source: Dnevnik (12.11.2009)

Bulgaria’s big power consumers urge flat excise duty The Bulgarian government should keep the electricity excise intact for 2010, said the Bulgarian Federation of Industrial Energy Consumers (BFIEC). A proposal approved at first reading calls for lifting the excise to BGN 2 per MWh from BGN 1.40 at present for industrial consumers and zero for domestic consumers. BFIEC chairman Konstantin Stamenov said raising the excise for industrial consumers against the backdrop of the economic turmoil would jack up the electricity prices. The finance ministry explained the proposal is in line with Bulgaria’s EU accession commitments. Council Directive 2003/96/EC on the taxation of energy products and electricity introduces a bottom rate of EUR 1 for domestic consumers and EUR 0.5 for industrial consumers.
Source: Dnevnik (12.11.2009)

Nippon Steel chairman warns of Australian oligopolies Mr Akio Mimura chairman of Nippon Steel warned that the creation of resources oligopolies was a threat to the continued growth of trade between Australia and Japan. Mr Mimura called on the fair trade authorities to strongly crack down against behavior implying towards excessive oligopoly with a view to maintaining an open and competitive market in resources trade. He didn't name individual companies, though his comments may reflect concerns about the impending joint venture between Rio Tinto and BHP Billiton Limited over their Pilbara iron ore production. He noted that the biggest steel maker, ArcelorMittal, produces about 10% of global steel while Nippon Steel is at 3%. He added that "In contrast, on the iron ore supplier side, we are looking at three companies, so that we have effectively a monopoly." (Market Watch)
Source: Other (12.11.2009)

IBM sees traction in Indian steel segment Global technology company IBM is focussing on the Indian steel market as a growth driver and is offering solutions and services to steel majors like Ispat, Bokaro, Jindal companies and Tata Steel in the country. With a lot of activity happening in the infrastructure sector and integrated power plants, the power utilities sector is growing and IBM is finding this sector bullish. For instance, it recently completed its first engagement with Jindal Steel and Power (JSPL) wherein it implemented SAP for standardisation of processes at the steel firm’s 19 locations . “At present, IBM is offering us extended support as the implementation part is over. The extended support period is for 6 months,” said S K Agarwal, Senior VP, JSPL. The company has invested $6-7 million on the deployment of the solution, infrastructure and maintenance. It is also in talks with IBM for its supplier relationship management solution besides other add-on models. The contribution of metals in IBM’s revenues has increased and it is currently talking to 6-7 clients in the vertical. (Business Standard)
Source: Other (13.11.2009)

At a crossroad. Again. The date is November 12, 2009. Exactly 15 months and 6 days since the Sofia City Court declared Kremikovtzi insolvent. In this period the American car manufacturer General Motors was financially hit, to request assistance from the state, to obtain funds and to go through the purgatory of bankruptcy and continue its existence. Bulgarian steel mill is still knocking on the door of purgatory and it all looks like it will remain there for several months. For the future of the plant there are two options – the recovery plan or direct sale of assets. So far, the latter appears more likely because one of the two largest creditors of the company – bondholders, have already decided not to turn rheir claim in shares, as is the idea of the recovery plan. Rpresentatives of state - Minister of Economy Traicho Traykov and Minister of Environment Nona Karadzhova spoke against the plan as well. Deputy Prime Minister Simeon Djankov also has not given unequivocal signal of his position, although a few months ago he talked of liquidation. By November 12 Djankov had to announce whether he agrees for the public state receivables as taxes and insurance to be deferred. Refusal of the Finance Minister to defer them, as his silence can be considered as such, means the end of the recovery plan, proposed by the assignee in bankruptcy Tsvetan Bankov. Moreover they are huge in size - between BGN 400 million and BGN 1.107 billion (nearly 80% of them are challenged in court, including the old state aid). By the end of last week the Minister of Finance had not given his opinion on the rescheduling of the debts. This gave the court the right to declare the company bankrupt in closed session and make it irrelevanr to schedule a meeting of creditors where to vote for or against. If there is no plan, the filling for bankruptcy and sale of assets follows, called "liquidation". According to Kapital sources, however Diankov Simeon has made additional requests to the assignee in recent days, which should be answered before the Vice PM to have the say. That's why now there is an attempt for the deadline of Finance Minister decision to be extended by two month, in which the new requirements can be met. If this happens, the final date for his decision would most likely be January 12, and in the meantime, assignee in bankruptcy and those in favor of the recovery would have to prepare solid arguments in support of the plan. Recovery plan provides for Kremikovtzi to increase its capital and creditors, whose claims have been approved by the court and released after examination by conversion into shares, would become the new shareholders. From the claims of nearly BGN 1.9 billion (final figure, confirmed by court) – BGN 944 million have been allowed to be converted into shares. So once the largest private lender gave up the adoption of the plan, it could lead to the comic situations that the smelter would be nationalized. The reason is that among the other creditors of the company one of the largest with BGN 55 mln is the National Electric Company. It would be able to turn its receivables into shares of the same value as the current capital of Kremikovtzi is BGN 18 million. The acceptance of the plan in this case would mean that the state would have to provide the plant with working capital and environmental investments. It is theoretically possible that the bondholders would support the plan, without turning debt into shares, but remaining as creditors, sources of Kapital think. So it is necessary to hold an additional vote among them, as there was a similar one for the capitalization. One of the advantages of the recovery plan is that there will be no layoffs and social unrest. Moreover Kremikovtzi probably will not lose its name and its metallurgical card. Cons are not few - there are no guarantees for solid environmental investments and profitable sales in the future. Experience in Bulgaria so far also shows that the written in the recovery plan does not happen. Examples are the bankrupt Chimco and Plama, but there are examples in the opposite direction as well – Stomana Industry. In case of liquidation, operations at Kremikovtzi would stops completely (not that capacity is currently overbusy). The assignee would have to schedule a tender for the sale of assets and the income would have to ne used to satisfy the creditors as possible. Experience shows that in this scenario initially the attempt is to sell all assets into one. It is very possibly that there is no candidate during the first tender. Thus, the price dropps 20% in the second tender. If there is no candidate again, the negotiation go to even lower price. Kremikovtzi have holiday stations, vehicles, over 12 thousand acres of land, scrap and steelmaking equipment. Valuation of all assets as of September is between BGN 632 mln and BGN 837 mln. Sale of assets has one big advantage - it is quick and transparent. The new owner may develop metallurgical production there, but after obtaining explicit authorization by the environment ministry, which would not be put under pressure. The new owner may decide to do something else – warehouses for example. It is difficult to define in which of the two options creditors will get more.
Source: Capital (16.11.2009)

POSCO breaks ground for auto steel service center at Nilufer in Turkey POSCO broke ground on November 12th 2009 for POSCO and Turkey Nilufer Processing Centre, a new processing facility specializing in auto steel in the Hasanaga Industrial Complex located in the vicinity of the city of Nilufer in Turkey. The comprehensive auto steel processing centre is scheduled to open in June 2010 and has been designed to process about 170,000 tonnes of raw materials a year. The upcoming facility is expected to solidify the company’s footprint in Turkey as it plans to strengthen its partnerships with Ford, Renault, Fiat, Hyundai, Toyota and Honda global automakers with a significant business presence in the country. Thanks to its geographical location as a bridge between Europe and Asia, Turkey has seen its economy grow steadily in recent years. Bursa, the province in which Nilufer is located has become a key industrial area in the country as it features major infrastructure such as expressways and ports connecting important Turkish cities including Istanbul, Ankara and Izmir. (Steel Guru)
Source: Other (16.11.2009)

Corporate Profile: Lead and Zinc Complex (OTzK) Bulgarian analysts are of the opinion that the crisis will first get out of those Bulgarian companies which are export oriented and rely on the largest markets in Western Europe. For OTzK recent data on the gross domestic product of EU members should be good news - after five consecutive quarters of decline in GDP the Union finally came out of a technical recession. Of course, this is far from securing a sustainable recovery of the markets, but at least it give some signals of stabilization. This fact is important for companies such as OTzK - the company realized more than 90 percent of its sales abroad. OTzK is one of the largest metallurgical plants in Bulgaria and is a leading provider of non-ferrous metals to Greece, Turkey and Romania, as well as to many other European countries like Italy, the Czech Republic and Hungary. The company is part of Intertrust Holding, which is managed by the former owner of Kremikovtzi - Valentin Zahariev. In early October the Ministry of Environment and Water approved the project for modernization and expansion of the zinc plant of the company - an investment of EUR 120 million, which was blocked for two years by the previous government. After the approval of the project, management of OTzK announced that it will proceed to the accelerated implementation of new and zinc production and it will be finished within two years, as zinc production capacity will increase by 40% and metal will be obtained with a purity of 99.99%. Since the beginning of the year lead is the metal going up the most on the LME. At present, the spot price of a ton of lead is USD 2250, which represents 129 percent growth compared to late last year. Zinc is up by over 80%, as it is currently traded for about USD 2150 per ton in London. These increases were in line with the general increases in non-ferrous metals, which in turn reflects the consolidation of European industry. However, OTzK warns that "there is still no clear trend of stable growth in metals prices." In the end of September the Kurdzhali-based company reported reduced production volumes in both its main product, explaining it with a drive to reduce production costs. Whatsmore - the company revised downwards its forecast for annual production of lead and expects to produce 3500 tons less, while the estimate for annual production of zinc is now left without change - 23 thousand tons. However, the company has returned to profitability after a difficult 2008, when major adjustments in the prices of metals and contraction of the industry brought OTzK to an annual loss of over BGN 37 million. The crisis had a negative impact on shares of the metallurgical plant - for the last 24 months it has dwindled from over BGN 120 to BGN 14.5. However, OTzK is one of the most profitable companies on the stock exchange if only its presentation since the beginning of the calendar year is taken into account. For this period, the shares have risen by over 100%, which is four times higher growth rate than the progress of the main stock index SOFIX. SWOT analysis Strengths Company with established positions on regional markets Significant investments in the modernization of production Weaknesses Increase in long-term indebtedness Non-transparent corporate management Requirements to meet environmental standards Opportunities Entering foreign markets where the industry is yet to develop Appreciation of non-ferrous metals because of the needs of large economies such as China Threats Long recession in foreign markets, which will shrink revenue The Company in figures: Market capitalization: BGN 124.5 mln. Last price of shares: BGN 14.80 Highest price in the last 52 weeks: BGN 16.10 Lowest price in the last 52 weeks: BGN 4.95
Source: Darik Radio (16.11.2009)

Exports of steel fell by half Representatives of more than 40 foundry companies in the country and experts discussed the future of machinebuilding subsector at a round table in Hisar. The forum was organized by German Association for Technical Cooperation (Gesellschaft Technische Zusammenarbeit) and the Bulgarian Branch Chamber Machine Building (BBCMB). Experts concluded that if foundry does not emerge from the crisis as quickly as possible, it will also drag down with it other sectors of the economy except machine building. Export of cast iron and steel at the end of the year is expected to be over 40 percent lower as compared to 2008. The cut of manufacture is the reason for the reduction of over 35% of the workforce in the sector, the branch chamber announced. The EU requirements in the field of ecology and environmental protection, working conditions and requirements for health and safety for workers were discussed at the forum as well.
Source: Monitor (17.11.2009)

Rudmetal JSC resume work on mine Dimov Dol The extraction of lead-zinc ore from Dimov Dol, near Rudozem, was restored since the beginning of this month, said the mine concessionaire Rudmetal JSC. It was suspended exactly a year ago because of the collapse of the prices of lead and zinc on the international markets. Levels fell from about USD 4000 per ton to under USD 1000 and made the production inefficient, said Mitko Mladenov, executive director of Rudmetal JSC. The company had to lay off about 200 workers. The partial recovery of prices at levels above USD 2000 per ton allows us to restore the operations, said Mladenov. 205 jobs were open, with about 10% of the staff being new. About 70 employees had been kept. The company has invested EUR 1 million during the 1-year conservation of the mines. Yield of lead-zinc ore from Dimov Dol is expected to be 6500 tons of raw material per month or 78 thous tons annually, said Mitko Mladenov. We do not have problems with the realization of the output, it is supplied to Lead and Zinc Complex - Kurdzhali, which can take two times greater quantities than these, he added. The mine has reserves for 10 years and the company plans to invest an average of BGN 700 thous per year. Dimov Dol mine worked for seven years before its forced halt in 2008. In this period the state budget received from it BGN 14.5 million of taxes, insurances and concession fees.
Source: Pari (17.11.2009)

Steel firms under pressure as iron ore prices rise Iron ore prices have increased 20 per cent over the past month and are trading above $100 a tonne, putting pressure on steel companies. Companies that are not protected by long-term iron ore contracts are feeling the pressure, but are unable to pass on the increase to consumers as the market is not conducive. In fact, some steel companies had cut prices last month to adjust to market forces. Landed iron ore prices in China have increased from $85 a tonne to $102 a tonne over the past month. The increase was driven by the fact that China that had not been able to strike a deal for Australian iron ore, said Federation of Indian Mineral Industries (FIMI) sources. China was expected to import around 600 million tonnes as against 440 million tonnes last year. India would benefit as around 90 per cent of iron ore fines exports were to China. (Business Standard)
Source: Other (18.11.2009)

Minister Traykov: the state won't pay Kremikovtsi's debts "I cannot allow the debts of Kremikovtsi steelworks to be paid from the state budget," stated yesterday Bulgaria's minister of energy and economy Traycho Traykov at a discussion on the future of the bankrupt metallurgical plant. "If big state-run enterprises become Kremikovtsi's owner, they will have to pay its debts. In a situation of crisis, the National Electric Company (NEC) and Bulgargaz will have to pay off its debts to the ministry of finance. As a person responsible for the financial status of NEC and Bulgargaz, I cannot render them my support for such a decision," stated minister Traykov. Thus minister Traykov said “no” the a rescue plan which envisaged that Kremikovtsi's creditors become its owners. "Now, the discussion should be focused on what should be built in the place of Kremikovtsi," minister Traykov said further. In Traykov's opinion, the several thousand workers facing the risk of being left jobless in Kremikovtsi are the only reason that the Kremikovtsi issue is still discussed.
Source: Standart (19.11.2009)

NEK, Bulgargaz disallowed to rescue Kremikovtzi The ministry of economy will not allow National Electric Company (NEK) and Bulgargaz to transform their receivables from Kremikovtzi into shares, minister Traycho Traykov told a round table on the steelworks' future. Regardless of that NEK has filed a request to Kremikovtzi's receiver Tsvetan Bankov for transformation of a BGN 60 million debt into equity. Bulgargaz's receivables amount to BGN 80 million, including interest. The two state-owned companies have already buried a lot of money in the metallurgical plant; they cannot be expected to take over its other debts too, minister Traykov was adamant. As a person responsible for NEK and Bulgargaz's economic viability, I cannot back such a decision, said he. That will not be fair to taxpayers. Kremikovtzi's bondholders, who are the biggest creditor of the plant, have already rejected the rehabilitation plan, Traykov pointed out. The ministry of environment has warned that Kremikovtzi may be shut down any moment, because it does not have an integrated pollution prevention and control permit. Kremikovtzi's debts amount to some BGN 2 billion. Only if the company continues operating can creditors hope to get their money, receiver Tsvetan Bankov pointed out. If the plant is liquidated and the assets sold, creditors will only receive part of their money.
Source: Pari (19.11.2009)

BHP chief says big mining will meet demand Marius Kloppers said the big mining houses had the capacity to meet the world’s rising demand for fuels and ores in the coming decades. BHP Billiton chief executive also underlined the scale of demand expected from fast-developing nations when he said China alone may require five times as much iron ore in the next 15 years as it had in the past 15 years. By 2030, China would have more than 220 cities with populations above 1m people. BHP, the world’s biggest mining group, and Rio Tinto, its Anglo-Australian rival, are working to a December 5 deadline to agree an iron ore joint venture production company that would pool both groups’ operations in the Pilbara region of Western Australia. The venture, which would dominate the global iron ore industry, is opposed by steelmakers in China, Japan and Europe that argue it would restrict competition. The European Commission is expected to be the most significant regulatory obstacle to the joint venture. (The Financial Times)
Source: Other (19.11.2009)

Bulgaria Obsolete Steel Mill Relinquishes Permit Quest Bulgaria's former largest steel mill Kremikovtzi had withdrawn the application for a complex permit for its environmentally clean productions. The move has happened a month ago, the Minister of Environment Nona Karadzhova announced, adding the permit would not be issued. The deadline for the mill to obtain the permit expired more than a year ago – on October 23, 2008. Kremikovtzi is now on the so-called “stand by” regime, proposed by Bulgaria to the European Commission as a response to questions regarding the expired deadline to issue the permit. It was important for the allocation of the gas emission quotas as well.
Source: Darik Radio (20.11.2009)

Steel demand recovery favours BRIC, shuns US, EU The global steel industry's much-awaited demand recovery next year will differ widely across regions, with mature economies facing a slow and painful improvement and emerging markets enjoying a robust comeback. Capacity restarts have dominated headlines over the past couple of months, as steelmakers across the globe ramp up production citing an improvement in their order books, while prices around the world have bounced from record lows. The initial improvement was mainly technical, analysts say, due to a restocking of depleted trader and middlemen inventories. On Thursday, Austrian steelmaker Voestalpine reported it had swung back to an operating profit in the three months to September, while a strong performance at Russian steel mills helped push the country's biggest steelmaker Severstal to a surprise third-quarter net profit. But that could be it for the good news for now in Europe and the United States, where recovery is seen tentative and fragile. "There is a fundamental difference now in recovery between different parts of the world," said Ian Christmas, secretary-general of World Steel Association, whose members represent 85 per cent of the world's total output. (Economic Times)
Source: Other (20.11.2009)

Nucor defers plant decision Nucor Corp., the North Carolina steelmaker once expected to announce a major steel mill investment in 2008, likely won’t make a decision to build in Louisiana or Brazil until 2010, a state official said. The pig iron mill, which could be joined by a finished steel mill in later phases, would begin as a $2.1 billion project. If built in St. James Parish on the Mississippi River, it could create thousands of construction jobs and an initial 500 jobs paying $75,000 a year. “We don’t expect a decision from them on the potential Louisiana project until sometime next year,” said Stephen Moret, the state economic development secretary. More than anything else, the potential new costs of environmental legislation being considered by Congress is giving Nucor pause now, he said. Later building phases could push total investment, well into the next decade, to $4 billion and 1,250 jobs. Nucor already has paid $50.3 million to three parties — Entergy Corp., Schexnayder Industrial Services Inc. and the Port of South Louisiana — for 3,878 acres that include about a half-mile of river frontage. (2theadvocate)
Source: Other (23.11.2009)

Feasibility study almost ready for Votorantim-Acesco steel plant Brazilian company Votorantim Metais and Colombian steelmaker Acesco are close to finishing the feasibility study for a US$1.4bn steel sheet plant in Colombian city Barranquilla. Once this study is completed the two companies can decide whether or not to move ahead with construction and a decision is expected before year-end. In August local press reports said the two companies were considering suspending the project until the market fully recovers and costs go down. The project is designed to supply 800,000 t/y of rolled products to the domestic market and could also eventually export some 500,000-600,000 t/y. The construction phase of the plant, which according to the press will be called Siderurgica del Rio Grande de la Magdalena or Sidermag, is expected to create around 10,000 jobs and 1,500-2,000 once in operation. Colombia's apparent steel consumption is 3.1 Mt/y and the country imports 1 Mt/y, of which 80% is in rolled steel and coils that come mainly from Brazil, Venezuela, Mexico, China, Japan, Russia and Ukraine. (Business News Americas)
Source: Other (25.11.2009)

Baosteel acquires 15pct shares in Australia Aquila It is reported that a handover ceremony between Baosteel Group and Australia was held in Beijing on Monday morning. According to the agreement signed by both parties, Baosteel will pay AUD 286 million for its acquisition of up to 15% shares in Aquila Resources. Both parties also inked memorandum for strategic cooperation to further work together on resources projects. Actually, Baosteel Group has won approval from the Foreign Investment Review Board for a stake of 19.9% in Aquila. Aquila takes up 40% in Pilbara expected annual iron ore outputs of 30 million tonnes and 74% in South African Thabazimbi mine' expected annual iron ore outputs of 2.5 million tonnes. Besides, Aquila occupies 56.5% in Queensland's coal mines with annual capacity of 124 million tons and 74% in South Africa Aavaontuur manganese mine with annual capacity of 1 million tons. According to Baosteel Group, the cooperation will help Aquila in a lot of resource projects so that more resources will be available in the markets. At the same time a part of raw materials supplied to Baosteel can be also secured. (MySteel)
Source: Other (26.11.2009)

MEW takes action against polluted air in Kardzhali Vice Minister of Environment and Water Evdokia Maneva has engaged to take emergency measures against the often air pollution by strictly inspecting the operations of Lead and Zinc Complex (OTzK) and require the company to comply with the arrangements from the meeting on November 3, namely - to install the new filtering equipment by the end of the year - two absorbers and a scrubber (water dust-collectors) and to move forward the reduction of lead production capacity. Kardzhali municipal governor Ivanka Taushanova informed the Deputy Minister of Environment and Waters for another gassing of Kardzhali with sulfur dioxide from OTzK. On November 24th for three consecutive hours the automatic measuring station in Studen Kladenetz quarter reported abnormal concentrations of sulfur dioxide in the air - between 534.08 and 1 104.20 micrograms per cubic meter. Significant exceedance of the permitted level was also reported on 19 November. At a meeting held earlier this month in Kardzhali in the presence of Deputy Minister Maneva, OTzK engage to modernize the zink plant until the end of 2011, for which there is an approved by MEW investment proposal, and by the end of 2012 - to renew the lead production according to the most modern technologies. Otherwise OTzK risks being closed, and Bulgaria paying penalties imposed by the European Commission.
Source: Darik Radio (27.11.2009)

CITUB turned to PM for Kremikovtzi JSC CITUB turned to Prime Minister Boyko Borisov to save metallurgical plant Kremikovtzi JSC. According to the union - senior executive officials do not understand the factual and legal procedures about the steelmill. If it comes to its closure, however, at least 4000 people will lose their jobs. Then mass layoffs and bankruptcies related to the plant firms will follow. Only in BDZ over 2 000 people are expected to be fired, given the situation in Kremikovtzi JSC. CITUB added that for security of the site facilities and all infrastructure, which encompasses an area of 24 thousand decares also require significant resources. Its provision is an outstanding problems and responsibilities of any uncontrolled looting and other serious crimes will be at the expense of the state. Such examples and human casualties are a fact in other place, CITUB reminded. Thus the syndicate urges the state to support the recovery plan for the plant, the essence of which is the capitalization of its debt. The option for the future of Kremikovtzi JSC is its liquidation.
Source: Darik Radio (27.11.2009)

Duties on Chinese steel imports provoke retaliation in U.S. Canadian steel producers applauded a preliminary decision by Ottawa to slap a duty on Chinese steel imports, but reaction to a similar move by the United States indicates Canadian-Chinese trade relations could suffer as a result. Earlier this week, the Canada Border Services Agency made a preliminary determination that certain Chinese steel products used in the oil and gas industry have been subsidized or dumped into the Canadian market and imposed a preliminary duty of up to 182 per cent. Welland, Ont.,-based Lakeside Steel Inc. initiated the complaint - along with Tenaris and Evraz, two international steel producers with operations in Canada - and said it will actively participate in the ongoing investigations to ensure fair trade. The Chinese Embassy in Ottawa did not immediately respond to requests for comment, but similar measures in the U.S. provoked a strong rebuke from China earlier this month. Washington said it would place levies as high as 99 per cent on some steel pipes imported from China, causing China to retaliate with an anti-dumping probe into the American auto industry. (Canadian Business)
Source: Other (27.11.2009)

One of the World’s Largest Ferronickel Plants Delivered Kawasaki Plant Systems, Ltd. (K Plant) announced that it has delivered a ferronickel plant to SNNC Co., Ltd., an affiliate of the Korean steelmaker, POSCO. Constructed near POSCO’s Gwangyang Works, the plant boasts a production capacity of 30,000 tons/year, making it one of the largest ferronickel plants in the world. After signing a contract with SNCC back in August 2006, K Plant finished work on the plant approximately three months ahead of schedule. The plant went into operation in early October 2008 and performance tests were conducted in April and late September 2009. The tests verified that the plant met all the performance requirements specified in the contract. Responsible for the design and manufacture of the entire plant, K Plant provided all the primary equipment (rotary dryer and rotary kilns, casting machine, etc.) with the exception of the electric furnace. K Plant also provided technical assistance on test runs and headed up operational training at PT Antam Tbk. in Indonesia while process analysis and inspections were carried out by the Kawasaki Heavy Industries Technical Institute to provide optimal ferronickel production solutions. (WEBWIRE)
Source: Other (30.11.2009)

Anton Petrov: There is a real boon of VAT frauds Anton Petrov, head of the Bulgarian Association of the Metallurgical Industry - Mr. Petrov, what is the metals market situation at the moment? - There was development in ferrous metal in September. Then it turned out that it is seasonal and is somewhat comes from the decreased stocks. December, January and February will not be easy. Positive trends can be expected not earlier than after the spring. I speak not only for Bulgaria but worldwide. Metallurgy was the first to be hit by the crisis. And perhaps it will be the last that will come out of it. In a time of crisis noone would order a ship. Construction would also not return to its state from a year or two ago. - In non-ferrous metals the situation is different. - It is different as there is much speculation with copper trade. It became the substitute for oil on the stock exchange and it attracted vast capital. - Business from the sector recently alarmed about fictitious exporters of metals stealing VAT. Did anything change? - Fictitious exports are increasing more and more. There is a real boom and this is normal in times of crisis. Rebar is exported from the country and returned to the Bulgarian market with half paid Vat or no paid tax. This is theft, which must be given a serious opposition. First, because taxes are evaded in this way. Second, damage is caused to loyal players on the market. So we expect tighter control by the state. If these criminal practices are not stopped in time, many normal subjects will be forced to pass into the shadow side of the economy. Who will come to invest in Bulgaria if we return to the conditions of 1990-1997, when it was a jungle and the payment of VAT was something exotic. - What else do you expect from the new government? - Almost BGN 4 billion have been invested in metallurgy since 2001. The most modern refinery of cathode copper in the world is in Bulgaria. Modern investments were made in other enterprises as well. We saw that it is possible. But if business was better carried for, we would go much further. - You have not had the feeling of care? - For the last two years we were trying to meet the former Minister Petar Dimitrov and discuss the problems of metallurgy. No such meeting took place. I wonder what this minister has done, if not meeting with representatives of the economy sectors? What's he been busy with during the week – he has to have worked for at least 8 hours a day. - Representatives of Kremikovtzi were every day in the ministry. - Why does the Ministry of Economy should be a funeral home? Dialogue should be on daily basis and not only with the troubled companies. Who knows the problems better than ourselves? The job of government and experts in the institutions is to sift what is good for the entire industry. We are optimistic and hope the new government would impose a new style of work. We hope it would seek intersection of corruption practices which plague the industry. - You are on the Board of Directors of Stomana Industry. Have you been subject to such practices? - I'll give you one example. We went to the National Railway Infrastructure Company and offered to participate in tenders for the supply of materials as one of the largest steel producers in Bulgaria. The answer was that they had concluded 3-year framework agreement with another provider and there were no tenders, in which we could participate. These 3-year contract came to light today and the truth about corrupt practices became evident. - Stomana Industry is often associated with businessman Lyudmil Stoykov. Does he participation in its capital? - In 2001 Greece-based Sidenor Group acquired assets of Stomana from Eurometal, which retained a minority share of 12 per cent. But since the spring of 2008 Sidenor owns 100% of the capital. So Ludmil Stoykov does not have a part in it. - What is your attitude towards the agony of Kremikovtzi? - There were too many players in Kremikovtzi, some turned fatal for it. But Bulgaria will lose an export-oriented producer. What would not be produced at the plant any longer would be imported from abroad. But Kremikovtzi should be placed in market conditions. Because when the state gives to someone, it take from somewhere else.
Source: Trud (01.12.2009)

EU OKs proposed acquisition of Uttam Galva Steels by ArcelorMittal and the Miglani Family The European Commission has cleared under the EU Merger Regulation the proposed acquisition of joint control of Uttam Galva Steels Limited of India by ArcelorMittal S.A. of Luxemburg and the Miglani Family of India. After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it. ArcelorMittal’s principal business is the production, distribution, marketing and sale of steel products. The Miglani Family currently controls Uttam Galva Steels Limited listed on various Indian stock exchanges. Uttam Galva Steels is a re-roller of flat steel products and a producer of coated steel in India with exports to a number of countries worldwide, including the EEA. Under the proposed transaction, the Miglani Family would sell part of its controlling stake to ArcelorMittal which in turn has also launched a public offer to acquire additional shares. (EUMonitor)
Source: Other (02.12.2009)

China Works on ‘Feasible’ Plan to Cut Steel Capacity The Chinese government is studying a “more feasible” plan to tackle steel overcapacity in the world’s largest producer of the metal, the Ministry of Industry and Information Technology said. The ministry is working with other departments on details including speeding up mergers, closing obsolete plants, pushing technology innovations and regulating iron ore imports, Jia Yinsong, an official at MIIT’s raw material division, said. Jia is reiterating earlier comments by other officials. A severe steel oversupply is overwhelming demand spurred by the government’s $586 billion stimulus spending, leading to high inventories, according to Chinese producers including Wuhan Iron & Steel Group. The steel overcapacity has led to excess iron ore imported to feed the mills, helping to drive up costs, the China Iron & Steel Association said. Crude-steel output in China may rise 14 percent to 570 million metric tons this year, Xu Lejiang, chairman of the nation’s biggest producer, Baosteel Group Corp., said. (Bloomberg)
Source: Other (03.12.2009)

1,700 jobs to go as Corus mothballs plant Steelmaker Corus has confirmed it will curtail production at its Teesside Cast Products factory, putting 1,700 people out of work. It had been announced in May that the 150-year-old Redcar plant was to be mothballed. The plant had been at risk since a 10-year deal suddenly fell through. Business Secretary Lord Mandelson expressed his disappointment, saying it would be a "very difficult time for the workforce". The deal that had fallen through was signed by an international consortium, led by Italian steel specialists Marcegaglia, in 2004, and committed the consortium to buy just under 78% of the Redcar plant's production. Corus said that 1,700 jobs would go, which is about 600 fewer than had been previously thought. "The steel industry overall has suffered an unprecedented fall in demand in the global recession," Lord Mandelson said. (BBC)
Source: Other (04.12.2009)

The crisis hit Bulgargaz Over 1 billion cubic meters less is the consumption of natural gas this year as to the previous. This is a decrease of about 30 percent, Bulgarian Energy Holding announced. In 2008 the country imported 3.341 billion cubic meters of gas. Reasons for the decline in consumption are three. First is the shut down of Kremikovtzi. While working at full capacity, the plant spent 30 thousand cubic meters of gas per hour (about 260 million cubic meters annually). The other reasons are the interruption of supplies from Ukraine in early January this year and the smaller quantities purchased by district heating utilities in February, March and November. Bulgargaz's earnings would be BGN 500 mln down as a result. At the same time the crisis is hardly reflecting on the consumption of electricity - the decrease is only about 6%.
Source: Standart (07.12.2009)

BHP and Rio sign iron ore joint venture deal BHP Billiton and Rio Tinto signed a binding US$116bn joint-venture agreement that would see the mining giants merge their Pilbara iron ore operations in Western Australia. The long-awaited deal would involve the miners take 50 per cent stakes in the combined western Australian iron ore assets, ports, railways and workforces. However, the two would still market their ore separately. The tie-up is expected to save US$10bn a year on capital and production costs. Rio and BHP already rank second and third respectively in the global trade for iron ore behind Brazil’s Vale but the new venture would allow them to produce about 350m managed tonnes a year of production capacity. On that basis it could allow them to leapfrog Vale. The deal – which has raised concerns from rivals as well as iron ore customers in places such as China – still has to clear a number of regulatory hurdles, most significantly the venture must win approval from European Union’s competition watchdog. Global steelmakers have been lobbying the European Commission amid concerns that the deal will give BHP and Rio control of one-third of the world’s iron ore reserves. (FT)
Source: Other (07.12.2009)

Seven companies awarded investor prize for 2009 Seven companies received the award for an investor of 2009 at an official ceremony yesterday in Sofia. The basic criteria for the award were the volume of the investments and the number of new jobs created, as well as the introduction of new technologies and the consecutive effect of the company’s project, for example increased export potential of companies or protection of the environment. In the mining sector copper mining company Elatsite Med was named top investor, for the introduction of modern equipment and reducing transport expenditure. The project is worth BGN 86 million and the jobs created after its completion totalled 1,780. Plasterboard maker Technogips was selected as top investor in the building materials sector, while within the car parts sector the highest prize went to Iksetik Plovdiv. Enel Maritza Iztok 3 was picked in the category of power generation for its heating power plant project worth EUR 700 million. The other honoured companies were AES Geo Energy, Rollplast and ABB Automation.
Source: Dnevnik (08.12.2009)

EUR 2.5-3 billion investment in 2009 predicted the head of the Bulgarian Investment Agency - Stoyan Stalev. For comparison, last year they were EUR 7 billion. Seven companies were honored with the award "Investor of 2009". Number 1 in the manufacturing industry is the project of Ellatzite Med for the modernization of the complex investing BGN 86 million. Important for the economy of the country is the investment of Tehnogips EAD. The company built a plant for gypsum boards and dry plaster mixtures near Radnevo for BGN 95 million. In sector "Manufacturing", Iksetik Plovdiv's investment in its plant for hydraulic machinery in the Industrial zone Rakovski was awarded. The investment is BGN 34 million, while the jobs created are about 60. In the energy sector two companies have been awarded - Enel Maritza East 3 for the investment of BGN 700 million and AES Geo Energy, which invested in the construction of wind farm worth BGN 528 million.
Source: Trud (08.12.2009)

Alkomet no longer drops YoY sales in November Alkomet JSC did not record a decline of sales on an annual basis and in November 2009 they were over BGN 15 million, as they were in November 2008. For the 11 months of 2009 the company achieved sales of BGN 149.5 million, compared to BGN 210 million sales for the 11 months of 2008, or fall on an annual basis by 29%. Output is around 3.6 tons in November 2009, an increase of about 20% or about 3 tons as to November 2008. Since the beginning of 2009 production is 37.63 thousand tons of foil, profiles, strips, sheets, tubes, rods and other articles of aluminum. In the same period of 2008 production was about 42 thousand tons and the decrease is about 10.4%. In December 2008 sales were approximately EUR 9 million, but production was about 1.5-2 tons. Alkomet reported a profit of BGN 819 thousand in the third quarter of 2009. Outlook until the end of 2009 is to restore the sales of all products to their 2008levels, says Alkomet’s interim report for the first nine months of 2009.
Source: investor.bg (09.12.2009)

Trade with Ukraine slumps 70% in 2009 Trade turnover between Bulgaria and Ukraine tumbled drastically from USD 1.5 billion in 2008 to USD 435 million for the first nine months of 2009, Ukrainian ambassador Viktor Kalnik said. For the full year the expectations are for a 70-percent slump. The main reason is the suspended ore supplies to Kremikovtzi's steel plant, which accounted for half of the turnover. Investment also dropped, though capital movement is difficult to follow as most investment companies, both Bulgarian and Ukrainian, register in offshore regions. Kalnik pledged to help companies solve their problems connected with corruption and difficulties at the customs, as well as promote ideas about new partnerships.
Source: Pari (09.12.2009)

Worldsteel opposes BHPB Rio JV The World Steel Association has called for competition authorities to thoroughly examine the impact of the proposed JV between Rio Tinto and BHP Billiton. R Ian Christmas director general of worldsteel, speaking on behalf of steel producers worldwide, said “The recently signed binding agreement between Rio Tinto and BHP Billiton is not materially different from the proposal issued earlier this year. It still carries a great danger of restricting competition thus reducing consumers’ choice as it would create an entity whose controlling position in the world’s seaborne iron ore market would become even less fair than the unsatisfactory position that exists today. The proposed JV would simply turn an oligopoly of three players into a duopoly.” Mr Christmas added that “Competition makes a market strong and brings efficiency. Competition between steel companies has made the global steel market healthier and brought benefits for steel customers. As a result, this has promoted growth in steel use which serves society as a whole. We view this revised proposed JV as potentially extremely harmful to the market, and we call for a very careful review by all the relevant competition authorities.” (Steel Guru)
Source: Other (09.12.2009)

Stomana Industry appraised for socially responsible company of European type Social Minister Totyu Mladenov declared Pernik-based metallurgical company Stomana Industry for a European example of corporate social responsibility. He called journalists to show more often the good practices in Bulgarian enterprises and gave an example of the metallurgical company. Minister Mladenov visit Stomana Industry at the invitation of the company management and met with managers and union leaders. The meeting was attended by the representative for Bulgaria of the Greek group Viohalko - Anton Petrov, the regional governor of Pernik - Ivo Petrov, and his deputy - Radoslav Yordanov, MPs from GERB Irena Sokolova and Vladislav Dimitrov, leaders of regional trade union structures Natasha Angelova – from CITUB, and Lubomir Jotev – from Podkrepa, the mayor of city of Trun - Stanislav Nikolov and others. Minister Mladenov praised the correct policy of corporate social responsibility applied in the Stomana Industry. He said the company can serve as an example with the existing permanent social dialogue, collective labor contracts, the constant training of personnel, investment in environmental protection and the creation of benefits for the local community. He pointed out that others can learn how to invest in improving working conditions for workers, rather than bonuses for early retirement. Such is the European practice, to which we strive, Anton Petrov underlined. Mladenov committed to make more efforts in order more firms to qualify for corporate and social responsibility, like Stomana Industry. He said that social ministry would work with Stomana Industry in the field of training and retraining of workers. The Minister greeted the management that in the time of crisis it continues to invest. He approved the additional health insurance for workers in the company. In his words, social peace is important for more rapid exit from the crisis and the realization of good intentions in the social sphere. The appreciation for social responsibility, given by Minister Mladenov, is quite reasonable. Stomana Industry has a longstanding strategy to implement concrete measures aimed at both staff and the local community. As an example, it was pointed out that 30 percent of the workforce costs are aimed at training and development of employees in the company. That is why Stomana Industry JSC has deservedly been honored with several prestigious national awards for achievements in this field.
Source: SaPernik (10.12.2009)

Kobe Steel to establish welding company in China Kobe Steel announces that it plans to establish a company in Shanghai to market its welding products and welding robot systems in that country. The new company, to be called Kobe Welding of Shanghai Co., Ltd., is anticipated to be established in March 2010. Plans call for KWSH to be capitalized at US$800,000. The company, which will be wholly owned by Kobe Steel, will have 11 employees. KWSH will market welding consumables and welding robot systems and related parts in China. It will also provide maintenance services for the robot systems. In China's energy field, demand has been active for petroleum tanks, spherical tanks and LNG terminals in recent years. Energy-related projects are anticipated to increase sharply in the future. For Kobe Steel's welding consumable business, it is essential to be close to its users, in order to meet demand for value-added welding consumables heavily used in the energy field. Kobe Steel decided to establish KWSH to improve marketing, reinforce customer relations, and strengthen its sales capabilities in China. (Kobe Steel Group)
Source: Other (10.12.2009)

Christmas bonuses at Stomana Industry Employees in Stomana Industry will receive Christmas bonuses of BGN 250, said Anton Petrov, regional representative of Viohalko for Bulgaria. According to him, this is the third bonus for the metalworkers this year, despite the crisis and difficulties in realization of the production program. Bonus system in the enterprise is linked to economic indicators and depends on the final result. The 2008 profit was impressive, said Anton Petrov, explaining that it covered the significant investments. This year the estimates are for a loss of tens of millions, but this does not impede the regular payment of agreed wages. The company provides additional health insurance. Staff in Stomana Industry is nearly 1000 people, adding the supporting companies - 1 300.
Source: SaPernik (11.12.2009)

Beijing imposes steel duties on Russia and US China imposed duties on imports of certain specialty steel products from the US and Russia, in the latest sign of trade tensions between Beijing and its main trading partners. The Chinese commerce ministry said the duties were a response to the dumping of products in the Chinese market by companies from the two countries. Beijing also alleged the US companies were receiving what were in effect subsidies as the result of “Buy American” legislation. The ministry said it was the first time China had investigated the role of subsidies in lowering prices for imported goods, a riposte to the common claim that Beijing subsidises its companies. The case involves flat-rolled steel used in the electrical power industry. Analysts said the duties affected only a small volume of trade, worth well below 1 per cent of the Chinese steel market. Coming at a time when China is under international pressure to let its currency appreciate, the new duties are the latest trade spat between China and the US. The decision is a further sign the steel industry is emerging as the most politically sensitive area of trade relations between China and its trading partners. (Financial Times)
Source: Other (11.12.2009)

Elatsite-Med imposed a monthly pollution fine Copper and gold-containing ores extraction company Elatsite-Med JSC has been imposed with a monthly fine for water pollution of Malak Iskar River with heavy metals (mainly copper and manganese). The fine is between BGN 840 and BGN 1600, according to the reported indicators. The plant for raw skins processing Evroleather SPJSC discharged waste water sewer in Etropole, MEW reported. The two companies this afternoon will present their investment programs to solve the environmental problems. Companies are expected to make concrete commitments to accelerate the construction of facilities for waste water with the assistance and under constant scrutiny by the environment ministry.
Source: econ.bg (14.12.2009)

Corus to invest EUR 35 million in French steel mill Corus has announced that it will invest EUR 35 million at its rail production facility in Hayange in France after securing a major new contract with SNCF. The investment follows the confirmation that Corus has secured a contract worth about EUR 350 million to supply rails for up to six years to French railway operator SNCF for the renewal and maintenance of the RFF tracks. The contract is for an initial 4 years with the option to extend it by a further 2 years. Corus will invest EUR 35 million in new technology at its rail production facility in Hayange, in the Lorraine region of north east France, to allow it to produce longer rails. The investment in a range of new manufacturing equipment will improve the plant’s efficiency and enable workers to produce 108 meters long rails. Engineering studies have already been completed at the Hayange plant which will enable the EUR 35 million enhancement work to begin in the New Year. At the peak of the enhancement work, up to 400 contractors are expected to be working on the upgrade from design and mechanical engineers to electricians and demolition experts. (Steel Guru)
Source: Other (16.12.2009)

Brussels: Bulgarian Steel-maker Restructuring Failed The European Commission has found that the Bulgarian steel producer Kremikovtzi did not implement the business plan established for its restructuring, its spokesman announced. The business plan was agreed by the Commission in 2006 on the basis of a special steel protocol to the Europe Agreement applicable to EU/Bulgaria relations prior to the country's accession in 2007. According to the European Commission the company received about EUR 222 M restructuring aid between 1998 and 2005, but failed to modernise its infrastructure and to reduce its production costs. The company went bankrupt in August 2008 and Bulgaria initiated the recovery of the aid plus interest in the context of the ongoing liquidation proceedings, spokesman Jonathan Tod said. According to the European Commission restructuring aid for ailing steel producers is strictly prohibited within the EU. However, in the context of pre-accession, candidate countries may be given the opportunity to grant aid in order to restructure their steel industries once, before having to comply with the EU's regime for state aid to steelmakers. The European Commission points out that it accepted to prolong the restructuring period until 2008. To ensure that the Protocol 2 to the Europe Agreement is respected, the EU and Bulgaria agreed on specific rules for the monitoring of the implementation progress. In this context, Bulgaria committed to recover the aid from Kremikovtzi if needed. In line with its monitoring obligations under this agreement, the Commission has now concluded that Kremikovtzi failed to implement the business plan in a satisfactory way "Essential modernisation and environmental investments originally foreseen were not carried out," says the commission. "In addition, the company failed to reduce production costs and continuously suffered from a lack of working capital for endogenous reasons that heavily affected its operational business. As a result, the company went bankrupt in August 2008." According to the Commission statement Bulgaria has already initiated the recovery of the aid of EUR 222 M plus interests, in the context of the current liquidation proceedings. The sprawling communist-era behemoth near Sofia was declared insolvent in August last year and has suffered huge loss of production. Workers have yet to receive BGN 56 M in unpaid salaries. Some 3 000 employees have been dismissed or have left the company, with some 3 170 staff still on the books. In their latest protests last month hundreds of workers called on state-owned gas provider Bulgargaz and state power utility NEK, two of the major creditors in the plant, to become majority owners, but the proposal met vehement opposition from the government. Key Bulgarian ministers have made it clear that bankrupt steel-making giant Kremikovtzi would most likely be liquidated, since 80% of Kremikovtzi’s creditors have disapproved the action plan to save the steel-maker, presented by the administrator.
Source: Darik Radio (17.12.2009)

The court decided for the aid of Kremikovtzi There will be development on the case with the nearly BGN 700 million state aid for Kremikovtzi after January. Then a second instance will hear the case for recognition of the financial aid. Yesterday Brussels pointed out that Bulgaria should get back the funds from the steelmaker. If it does not, it would be a subject to financial penalties. The amount was claimed in August 2008, when the plant was declared insolvent. But Kremikovtzi appealed and won in the first instance. The economic ministry challenged the decision. If the court recognizes that the aid is exigible, the state will become the largest creditor and the future of the plant will depend on it. It can restore the funds by selling assets. In case of rejecting the claim, however, the state will prove that Bulgaria had violated the European regulations.
Source: 24 chasa (18.12.2009)

Traykov: The state will protect its interest in Kremikovtzi Minister of Economy and Energy Traicho Traykov said that the state will protect its interests in the metallurgical plant Kremikovtzi and will work to implement the commitments under the recovery program in the company. He commented the letter from Brussels, which reminded the country to request the money given for the recovery program works. Between 1998 and 2005 the company has received around EUR 222 million of state aid for restructuring, but has not met its commitments and the state must get its money back, the commission noted.
Source: Dnevnik (18.12.2009)

China steel industry: BHP-Rio tie-up 'a monopoly' China's steel industry said it "firmly opposes" BHP Billiton and Rio Tinto's iron ore joint venture, branding it a "monopoly in disguise". The merger of BHP and Rio's iron ore operations in Australia "goes against fair competition principles" and Beijing should use anti-monopoly measures to stop the deal, the China Iron and Steel Association (CISA) said in a statement. "The CISA firmly opposes" the deal which "will certainly cause irrational price rises". "China is the world's largest iron ore consumer and importer. Anti-monopoly authorities in China should firmly resist the Rio-BHP tie-up plan according to the anti-monopoly law to protect the interests of Chinese steel firms." BHP and Rio, the world's two biggest miners, signed a binding agreement this month on the deal to combine their vast Western Australian iron ore operations with expected savings of about 10 billion dollars. The joint venture was announced by Rio in June, along with a 15.2 billion dollar rights issue, as it called off a huge cash injection from Chinese state firm Chinalco. (AFP)
Source: Other (18.12.2009)

Taiwan steel firm to buy stake in Brazil miner Taiwan's China Steel said it will spend 95 million US dollars on a stake in Brazil's Namisa SA, its first investment in a foreign iron ore miner. The island's largest steel producer made the decision in a bid to secure overseas supply amid expectations that a global recovery will eventually ratchet up demand, a China Steel spokesman said. "The deal shows our determination to secure overseas iron ore supply, while global demand for steel products is on the rise". The company's board of directors have approved the decision to buy a 0.5 percent stake in Namisa from Sumitomo Metal Industries and another 0.5 percent from Itochu Corp, at a total cost of 8.5 billion Japanese yen. The spokesman said China Steel imports 16 million metric tonnes of iron ore every year with 71 percent of the imports from Australia and about a quarter from Brazil. "Namisa is expected to supply 200,000 to 300,000 metric tonnes of iron ore to China Steel a year in the initial phase of the investment," he said. "We hope the annual supply will rise to 500,000 metric tonnes in the long run." The spokesman said China Steel may seek bank loans to finance the investment. (AFP)
Source: Other (21.12.2009)

Bulgaria’s metal industry slams upcoming gas spike Bulgaria’s metallurgical industry criticised the gas price formation mechanism and warns that plans to jack up rates might squeeze production further and even force some companies to idle capacities. The Bulgarian Association of the Metallurgical Industry (BAMI) -- which brings together the market’s major metal manufacturers including Promet Steel, Aurubis Bulgaria and Intertrust Holding -- said in a statement the current prices are nontransparent, unjustified and totally unpredictable. State-run gas company Bulgargaz is seeking a 17.02% increase in wholesale tariffs to BGN 437.8 per 1,000 cubic metres. The State Energy and Water Regulatory Commission (SEWRC), the country’s energy watchdog, has come up with a proposal for a 15.61% rise to BGN 432.54 per 1,000 cubic metres. It is due to make a final decision at its session today. The metal industry uses around 25% of Bulgaria’s natural gas supplies, with gas one of its major costs.
Source: Dnevnik (22.12.2009)

Global steel production up in Nov Global steel production rose for a third month in a row in November but edged down from October as Chinese output slowed, while improved demand prompted steelmakers to bet on a strong recovery in 2010. Crude steel output worldwide was 107,5-million tons in November, up 24,2 percent year-on-year, but down from 113,4 million in October, data from the World Steel Association showed. Members of the group represent 85 percent of total world output. Analysts said the slowdown was due to China, the world's top consumer and producer of the metal, whose production jumped by 37,4 percent year-on-year to 47,2 million tons in November, but was down from October's 51,7 million tons. Output in the European Union was up 10,8 percent year-on-year at 14,2 million tons, while in the United States, production was at 5,96 million tons, posting a rise of nearly 27 percent year-on-year.
Source: Other (22.12.2009)