PublishedweeklybySteelBusinessBriefing,thesteelindustrysqualitynewsservice01September(Issue3410)

TopNews
SouthernEuropeancoilandplatepushingupwards
Domestic coil producers in southern Europe are aiming for 2030/t price increases this month (see page 4), while import offers are also expected to rise (see page 6). Italian coil base prices had already reached around 550560/t ($706719/t) exworks for HRC and 600620/t forCRClastweek.Restocking,currentlythemain source of demand, is expected to continue through September. Coil import offers are also expected to rise some 20/t over the next few weeks. Chinese HRC was last week offered at around530550/tcfr.Platepricestoocouldrise thismonth.InnorthernEurope,commodityplate isalreadyat680/tandpushingfor700/t.While southern European prices are unlikely to reach 700/t,sourcessuggesttheymaygetclose.

SBBWorldSteelPriceTracker
01Sept10=231

Jan2000=100

Turkishscrapsoftensforholiday TCPsoldtoThailandsSSI
Slow buying during Ramadan caused Turkish scrap import prices to fall by some $510/t last week(seepage6).Europeanofferswereat$385 390/t cfr for HMS 1&2 80:20 compared to US offers of around $395/t cfr. However, steel mills donotthinkthisisasignthatpricesareseeinga downturn, rather it is just a seasonal effect. The scrap market is still strong and demand should pickupagainaftertheholidays,theysay. Tata Steelowned Corus Strip Products UK (see page 8) has signed an MoU to sell its Teesside Cast Products (TCP) steelworks in the UK to Thai steelmaker, Sahaviriya Steel Industries (SSI). It hopes to restart production in H1 2011 and to raise production to close to the plants 3.5m t/y capacity. Corus is understood to have included a cokeofftakeguaranteeaspartofthedeal.TCPis valuedataround322m($500m).

Source:SBBPriceTrackers

SBBSteelPriceTrackers
01Sept 231pts* $664/t $624/t 7daychange +1 +20

World HRCworld Rebarworld

*yr2000=100

EditorsComment
WhatnextforSeverstalNA?
In early August it emerged that Severstal had asked a number of companies to bid for its Sparrows Point, Wheeling and Warren flats plants in the USA. The mills had struggled to remain costefficient. Sparrows Point has been described as one of the highestcost mills in the US, in part becauseofitsneedforimportedironore. But the question remains as to who might buy the mills. Nucor has already said it has considered and rejected the idea of buying Sparrows Point, while ArcelorMittal was forced to sell the plant for antitrust reasons. The three mills are unionised and this could also discourage buyers. The sale is further complicated by Severstals desire to sell all the facilities to a single buyer: smaller bidders, such as Renco Group, may struggletoraisethenecessary$500m1bn. But if the mills are sold separately, buyers could still stay away. Wheeling and Warren would require serious investment to bring themuptothelevelofotherUSmills. Sparrows Point has the advantage of its location near Baltimore on the east coast. But this also makes it potentially the most costefficient of the three mills for Severstal. Since the plants hot end was idled in July, Severstal has supplemented the plants stockpiles with imported Russianslab.Observershavesuggestedthis strategycouldremaininplaceifabuyerfor the mill is not found, though the company insistsitplanstoreturntosteelmaking. Thepartiesinvolvedarenottalkingopenly. But if Severstal cannot find a buyer for all three mills, it could find itself struggling to restoreitsUSplantstoprofitability. TomasGutierrez WorldSteelReview t.gutierrez@sbb.com

LateNews
Spotsheetpricesrise,asUSmarket learnsofcominghikes ArcelorMittalincreasessectionsprices inEurope ArcelorMittalsRuhrortrodmilltostart upin2011/2012 Contents GlobalIndustryNews................................. SteelPriceHeatMap.................................. WorldMarketsWatch................................ Theironorespotmarket............................ Profile:TataSteelEurope............................
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01September2010(Issue3410)SteelBusinessBriefing2010

GlobalIndustryNews
SBBsWorldSteelReview

IronandSteelmaking
JapansSanyoSpecialSteelplanstocommissionanew54,000t/yhotforgingpressatitsHimejiplantin late2011. Saudi Arabias Al Tuwairqi Holdings plans to start up Pakistans first private 1.3m t/y integrated steel plant,TuwairqiSteelMills,inQ42010. Japans Kobe Steel says it has lost 100,000 t of crude steel production due to mechanical problems at blastfurnaceNo.2atitsKakogawaworks.IthopestomakeupthelossesinOctoberApril. Turkish company, DHT Holding, has raised crude steel capacity at its meltshop in Baku, Azerbaijan, to 480,000t/y. Algerianbusinessgroup,Cevital,hasproposedanewsteelmakingplantinBellara,eastofAlgiers,which couldcost$3.2bnandbecommissionedby2014. Eastern Chinas Ningbo I&S plans, which is managed by Baosteel, to idle one of its two blast furnaces from1SeptemberuntiltheendofDecember.Ithas4mt/yofcrudesteelcapacityacrossbothfurnaces.

Numbersoftheweek
Turkeyproduced3.7mtonnesofcrudesteelfor flat products in the first seven months of 2010, 59%morethaninthesameperiodof2009. Japanexported21.5mtofsteelproductsinthe first half of 2010, 67% more than the year before.Exportsofflatproductswereup86%y oy to 15m t, while longs were up 90% to 2.5mt. Canada produced 6.4m t of crude steel in H1 thisyear,up53%yoybutstilldown25%from 2008,accordingtogovernmentstatistics. US mills produced 1.7m s.t in the week ended 21August,upveryslightlyfromtheweekbefore. Capacity utilisation was at 71.5% compared with69.8%aweekearlier. China exported 229,324 t of welded pipe in July,down18%mombutup15%yoy. Russiaexported15.4mtofsteelproductsinH1 this year, 12% more than in H1 2009. Imports wereup75%yoyto2.3mt. InAprilJuly2010Indiaimported3.7mtofsteel products, 66% more than the same period in 2009. Indias net steel trade deficit reached 2.6m t in AprilJuly compared with 4.1m t in theyearto31March2010.

Flats
Turkishflatsmaker,Erdemir,saysitplanstoresumeplateproductionon1October.Ithas300,000t/yof platerollingcapacity. GermanysSalzgitterhascontractedSMSSiemagtobuilda25,000t/ydirectstripcasteratitsPeinesite.

Longs
SlovakiaSteelMillsexpectstocommissionitsnew600,000t/yrebarandwirerodmillinStrazskeinearly 2011. Russianbilletmaker,RostovSteelPlant,planstostartanew730,000t/yrebarandwirerodmillin2011. ArcelorMittal plans to raise its tire cord capacity at its Vespasiano and Itauna plants in Brazil by 30% withinfiveyears.

Tubes&Pipes
EasternChinasJiangsuYulongSteelPipeplanstocommissiona250,000t/ylinepipemillinthewestern provinceofXinjianganda170,000t/yplantineasternJiangsuprovincebytheendof2011. ArcelorMittalTubularProductsplanstostartupits600,000t/yseamlesspipemillprojectinJubail,Saudi Arabia,in2012.

Stainless&Special
JapansNipponSteel&SumikinStainlesshastripleditscapacityforduplexgradestainlessplateto36,000 t/y.

RawMaterials
ChinasXinjiangCokingCoalGroup,aBaosteelsubsidiary,planstoproduce7mt/yofcokingcoalwithin threeyears. XstratahasacquiredWestAfricafocusedironorecompany,SphereMinerals,whichisdevelopinga6m t/yironoreprojectatAskafanda30mt/yjointventureatGulbelAouj,bothinMauritania. ChinasSinosteelTradinghassignedanMoUwithHongKongbasedNorthAsiaResourcestocooperate onthelattersironoreminingoperationsinMongolia. OmansShadeedIron&Steel,ownedbyIndiasJindalSteel&Power,planstostartupitsnew1.5mt/y HBIplantinJanuary2011.

01September2010(Issue3410)SteelBusinessBriefing2010 2

GlobalIndustryNews
Downstream
Russianminerandsteelmaker,Mechel,planstoopenarepresentativeofficeinKiev,Ukraine.

SBBsWorldSteelReview

StocksWatch
EuropeandistributorsstocksfellinJuneto 64.8daysoflongsand59.9daysofflatsfrom 68.1daysand65.4daysrespectivelyinMay. StocksofHRC,CRCandheavyplateatthe JapaneseportsofTokyoandOsakawereup 9%momattheendofJulyto146,000tled byan18.5%increaseinOsaka.

Trade
IndiahasinitiatedADinvestigationsintoimportsofstainless200seriesstripfromChina,theUSAandthe UAEand400seriesstripfromtheEU,KoreaandtheUSA.

Freight
Indiansteelmaker,JSW,hasbegunconstructiononarailways,thefirstofthree,designedtofacilitatethe transportofironoreintheBellarydistrictofthewesternprovinceofKarnataka.

Finance&Management
Chinesesteelmaker,Shougang,planstoformanautomotivejointventure,BeijingAutomobileCo.,with anunnamedautomaker. MostofSwedishspecialsteelmaker,Ovako,hasbeenboughtbyprivateinvestmenthouse,Triton,for an undisclosed sum. Current owner, Westflische Drahtindustrie (Pampus), will retain Ovakos rodandwireoperations. Jinan I&S failed to call a shareholders meeting before a deadline on 24 August, delaying its merger with Laiwu Steel. The merger was encouraged by the government of Shandong provinceshortlyafterArcelorMittalshowedaninterestinbuyingintoLaiwusteel. Shareholders in US steelmaker, Gerdau Ameristeel, have approved the 100% buyout by BrazilsGerdau,whichpreviouslyowned66.3%ofthecompany. Brazilian flats and iron ore producer, CSN, says it will invest R$250m (US$141.6m) in environmentalprojectsoverthenextthreeyears. US tube distributor, McJunkin Red Man, has bought fellow distributor, Dresser Oil Tolls & Supply. Brazilian pig iron producer, Cosipar, has denied rumours that it could be sold to Russian minerandsteelmaker,Mechel. KoreasPoscosaysitisstillconsideringbuyingallofThailandsThainox,ofwhichitcurrently owns15%,eventhoughdiscussionsareonhold. Latin American steel conglomerate, Ternium, has concluded the purchase of a majority stake in both Colombian processor, Ferrasa, and Panamanian longs distributor, Ferrasa Panam. The Zimbabwean government has invited new bids for up to 70% of stateowned steelmaker,Zisco. Chinese property developer, Shanghai WanYe, has agreed to buy 60% of a 3m t/y iron ore projectinnorthernIndonesiasMalukuprovince. German cold roller, Gustav Theis, is currently looking for new investors after overcoming insolvency.
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01September2010(Issue3410)SteelBusinessBriefing2010

SBBSteelPriceHeatMap
SBBsWorldSteelReview

PriceshopeforSeptemberwarmth
NorthAmericaflats
US domestic coil spot prices were level last week at around $580590/s.t ($639650/t) for HRC, $680700/s.t for CRC and $730780/s.t for HDG. US plate prices were down some $10/s.t to $750780/s.t fob mill, in spite of a numberofmillsrecentlyraisingtheirlistprices byatleast$40/s.t.

Europeflats
Southern European coil prices increased in Augustandmillshopetopushpricesafurther 2030/t this month. Last week coil prices were at around 530550/t ($673698/t) ex works for HRC and 600620/t for CRC. In northernEurope,plateproducersaretryingto pushSeptemberpricesup2050/t.

CISflats&longs
CIS coils export prices continued to rise last month with HRC at $580620/t fob Black Sea. TheCISbilletexportmarketwasflatlastweek but with some signs of prices firming this month(seepage6).

NorthAmericalongs
TSIs*rebarreferencepricefortheUSAwasup $4/s.tlastweekto$591/s.t($651/t)aftermills announced $25/s.t price increases earlier in August.

Europelongs
South European domestic rebar and wire rod prices increased 2030/t in August on the backofrisingscrapprices.Rebarwaslastweek at around 480500/t ($609634/t) delivered whilemeshqualitywirerodwasat490510/t. Scrap also pushed north European merchant baruptoaround500550/texworks.

Chinaflats&longs
ChineseHRCspotpricesfellagainlastweekto RMB3,5213,547/t($517521/t)ontheShang haispotmarket.CRCwasalsodowntoaround RMB 4,2314,359/t. Hebei I&S and Shagang havekeptSeptemberpriceslevelfromAugust. HebeisrebarandwirerodareatRMB3,607/t and RMB 3,632/t. Shagangs rebar is listed at RMB3,530/twhilewirerodisatRMB3,658/t. Allpricesexclude17%VAT.

Risingrapidly

Pricesstable

Fallingrapidly

LatinAmericaflats&longs
Brazilianmillshavecutcoilpricesby1020%to fendoffimports.DomesticHRCwaslastweek available at no more than R$2,2502,310/t ($1,2781,314) delivered. Costa Rican rebar prices were at around $1,000/t delivered in spiteofweakdemand. nb:Africadatan/a; *TSI=TheSteelIndex

MiddleEastlongs
Rebar producers in the UAE have increased theirpricesAED125/tthismonthtoAED2,270 2,275/t ($618620/t). Spot prices were last week heard at around AED 2,350/t. Saudi Arabian rebar prices were steady last week at aroundSAR2,900/t($773/t).

EastAsiaflats&longs
Taiwans Chung Hung Steel has raised its coil prices by TWD 250/t to TWD 20,55020,750/t ($642648/t)forHRCandTWD26,00026,550/ tforCRC.TokyoSteelinJapanhasraisedboth flat and long prices by 1,0003,000/t from August, bringing rebar to 55,000/t ($652/t), HRC to 64,000/t and Hbeams to 72,000/t. Japans Kyoei Steel has lifted rebar prices by 5,000/tthismonthto60,00065,000/t.

01September2010(Issue3410)SteelBusinessBriefing2010

MarketsWatch
SBBsWorldSteelReview

LatestEconomic&BusinessNews
TheUSdepartmentofcommercereviseditsGDPgrowthfiguresforQ2toaseasonallyadjusted1.6%year onyear from a previous estimate of 2.4%. Nevertheless, this was still higher than predictions by a Dow Jones poll of economists, which forecast 1.3% yoy growth. In Q1 GDP grew by 3.7% yoy. Investment bank,MorganStanley,lowereditsforecastforJulyDecemberGDPgrowthfrom33.5%to22.5%yoy. Theeuroarea industrial orders index wasup2.5%monthonmonthand22.6%yoyinJune.InMaythe indexhadrisen4.1%mom.IntheEU27itwasup2.4%momand22.5%yoy. TheUK economy grewby1.2%qoqand1.7%yoyinQ2,thehighestquarterlygrowthsincethestartof 2001,accordingtorevisedfiguresfromNationalStatistics. Indianindustrialproductioninsixcoreindustries,whichincludesfinishedsteel,wasup4.5%qoqinApril Juneaccordingtothelatestgovernmentdata.Infrastructureoutputwasup3.9%yoyinJuly. Taiwaneseindustrialproductionwasup20.7%yoyinJulyaccordingtonewstatisticsfromtheMinistryof EconomicAffairs.TheministryalsoreviseditsJunefigurestoshowa24.7%yoyincrease.

Otherforecasts,stockpredictions
Significant increases in iron ore supply are likely to exert downward pressure on iron ore prices until 2020, according to Steel Business Briefings new Forecaster Iron Ore. Major increases in the short term will come from MauritaniaandSouthAfrica,whileWest Africanprojectswillcomeintoplayafter that. The international iron ore trade, currently at around 1bn t/y, is likely to increase by around one third over the nextfiveyears,thereportadds. The electricity costs of European steelmakers could increase significantly over the coming years, according to analysts. The gradual closure of nuclear power stations in Germany and its commitment to source 40% of its electricity from renewable sources by 2030couldpushupprices,theysay.

SteelMarketAnalysis
Globalmarketsuncertain,aslargeeconomieswaver While scrap and iron ore spot prices weakened a little last week, a number of producer list pricesarerising.Itwouldappearthatwithsteeldemandandsentimentnotasstrongasmany expected at the end of August (going into September), spot raw material prices declined. Consumption in China remains quite uncertain and that has impacted spot iron ore prices in particular. To add to the lack of clarity, contract iron ore and coking coal quarterly prices are set to fall. TheJuneAugustaverageTSI62%Fespotreferencepricewasdownbyjustover12%:thusthe Vale and Rio Tinto Q4 contract prices are expected to fall by something similar, depending on freightcosts. Meanwhilewithfearsofadoublediprecessioncontinuing,theUSeconomytoomaynotbeas firmassometradersandanalystshadanticipatedafewmonthsago.Scrapsurchargedflatand long product prices may rise in the coming weeks, as may some strip producer prices. Inventories are low, but there are doubts on how long the producers can hold prices in a soft market. Similarly in Europe, there are concerns about announced producer price increases. With raw material costs having risen yearonyear, some rebar prices have been lifted by 2030/t, and ArcelorMittal is looking for 5070/t more for sections from September. In addition, as many analysts now believe the EU economy, led by Germany, is stronger than that of the USA, producers are likely to be encouraged to lift coil prices by up 3050/t in Q4. ThyssenKrupp, SalzgitterandVoestalpineareallsaidtoberunningatgoodcapacityutilisationrates,reflecting firmautomotivedemand. In Asia, producers are also keen to hike prices, but increases so far seem small, and traders report not much improvement in demand. Though Chinese exports to Europe were strong in July,tightermarginsarelikelytomeanarenewedfocusonnearermarkets,includingIndia.Q4 istraditionallythestrongestseasonintheregion.
01September2010(Issue3410)SteelBusinessBriefing2010

MarketsWatch
SBBsWorldSteelReview

Longs
Billet:CISbilletexportoffersremainedflatlastweekataround$540560/tfobBlackSea,thoughbuyers said they were not prepared to pay more than $540/t fob. Market sources suggest prices will remain stablefor the restoftheyear, with somechance ofprice increasesthis month. Southeast Asian billet import offers have continued to firm. Taiwanese billet was last week offered at $600610/t cfr SoutheastAsia,whileregionalmillswereofferingbilletat$610620/tcfr. Rebar & rod: Turkish rebar export offerswerelevellastweekataround$585595/tfobasmillsawait theendofRamadan.SoutheastAsianrebarimportpriceswereintheregionofbilletofferslastweek.A shipmentofKoreanrebarwasrecentlybookedat$600/tcfrHongKongandTurkishrebarat$605/tcfr Singapore.Marketsourcessuggesteitherbilletpricesmustcomedownorrebarwillgoup. Sections: Taiwanese Hbeam producer,TungHo,lastweekraiseditspricesbyTWD500/tto25,100/t ($782/t),citinghigher scrapprices.Meanwhile, onthe Shanghai spot market Hbeam pricesdropped RMB50/ttoRMB3,4533,590/t($507527/t),excluding17%VAT.

SouthernEuropeanHRC, domesticvsimports
650 600 550 500 450 400 350 300
4 Jan10 18 Jan10 1 Feb10 15 Feb10 1Mar 10 15 Mar 10 29 Mar 10 12 Apr 10 26 Apr 10 10 May10 24 May10 7 Jun10 21 Jun10 5 Jul10 19 Jul10 2Aug10 16 Aug10 30 Aug10

HRC,SouthernEurope domestic, /texworks HRC,SouthernEurope import, /tCIF

Source:SBBPriceAnalyser

Flats
Coil: South European coil import offers are expected to rise this month. Chinese HRC was last week offered at around 530550/t ($672698/t) cfr and Mediterranean producers were offering at around 510/tcif.Importofferstotheregioncouldreach560/tcifthismonth,whileHDGofferscouldpushas highas700/tcfrfrom630670/tcfrattheendofAugust.SoutheastAsianCRCimportoffershavealso increased.TaiwaneseCRCwasofferedataround$760770/tcfrlastweek,whileKoreanofferswereat $760780/t cfr. Chinese export offers have also risen. Anshan I&S has raised its HRC export offers to Japanby$45/tto$680/tcfr.InBrazil,millshavereducedtheircoilexportpricesforOctoberNovember deliverytoaround$575600/tfobforHRCand$660670/tfobforCRC. Plate:SoutheastAsianshipplateimportpriceshaverisenonimprovedsentiment.Ukrainianshipplate was recently booked at $725/t cfr Singapore, while Indonesian ship plate was booked at $710/t cfr. Japanese mills finally concluded a price with domestic buyers for H1 deliveries of ship plate, winning priceincreasesof18,00020,000/t($213236/t).

RawMaterials
Iron ore: Indian iron ore exports to China were low last week because of a shortage caused by Karnataka states ban on exports. Consequently prices remained stable at around $154156/t cfr for 63.5/63% Fe fines althoughonetransactionofthisgradewasheardat$159.5/tcfr. The Steel Indexs ironorereferencepricefor62%Fefinesfinishedlastweekat$142.9/dmtcfrChina,$4.6/dmtlessthan theweekbefore. Scrap: Turkish scrap import prices were down slightly again last week. Offers were down $10/t to around $385395/r cfr for HMS 1&2 80:20, though offers are expected to return to $400/t cfr after Ramadan.Transactionswerelastheardat$375/tcfrforHMS 1&2 70:30and$385/tcfrforshredded. Germanscrappricesincreasedby2030/tinAugust.E40grade(shredded)roseto251.8/t($319)ex scrapyard,E3(oldheavyscrap)wasupto251.6/t,andE2/E8(newarisings)reached275.7/t.Japans TokyoSteelraiseditsH2scrap buyingpriceslastweekby5001,000/tto31,00033,500/tdepending onlocation.

01September2010(Issue3410)SteelBusinessBriefing2010

TheWeekinFocus
SBBsWorldSteelReview

TheWeekinFocus
Theironorespotmarket IndianironoreexportstoChinaenteredthelimelightearlierthisyearasmanyminersbegantosetcontract pricesaccordingtospotmarketindices.TheironoretradebetweenIndiaandChinaisthelargestsinglespot marketglobally,andthereforerelevanttoironoreconsumers,nomatterwhethertheybuyspotorcontract. Ironorepricingisakeyissueforsteelmakersasitcompriseswelloverathirdoftotalcosts. Many steel mills complain that it is unfair to base contract prices on a trade which was marginal and susceptible to political and seasonal constraints. The monsoon season restricts freight every year, while Naxaliteinsurrections,localattemptstoencouragesteelmakinginIndiaandmovestocrackdownonillegal mininghavealsoaffectedtheironoretrade. Indianironoreexportscontinuetobetroubled This summer Indias exporters of iron ore have suffered further constraints. The state government of Karnataka, which previously exported most of the 40m t/y it produces, suspended iron ore exports from statecontrolledportson26July,thoughtheseportswerealreadyshutforthemonsoonseason.On28July, thestategovernmentstoppedissuingoretransportpermits,causingacompletehaltinironoremovement outofthestate.ThestateofOrissahasalsobeencrackingdownonillegalmining,furtherhamperingsupply. AsthelatestissueofSteelBusinessBriefingsRawMaterialsXtrapointsout,thereisnoendinsightforthe ironorebaninKarnataka.Alocalmininglobbyhasgonetocourtovertheissue.Butthecourtdidnotpass any verdict at a hearing on 20 August. Though further hearings have been scheduled, miners fear that no resolution will be possible. Even if the law was revoked, the state could introduce further measures to restricttheironoretrade. Chinasayingno Ironoreconsumersfearedthatthesecomplicationswoulddriveupthepriceofironoreandspotpricesdid riseforawhile.TheSteelIndexsreferencepricefor62%Fefinesreachedahighof$183.2/dmtcfrChinain Aprilbeforefallingback.Thenitroseaggressivelyagainfrom$117.8/dmtinmidJulyto$147.8/dmtinmid August.However,thepriceisnowfallingbackslightlyandanewdynamicissaidtobeenteringthemarket. IronorepriceriseshavebeenconstrainedasChinesebuyersshunIndianimports.Theyareconcernedthat Indiawillnolongerbeareliablemarketfromwhichtosourceironoreiftheissuesarenotresolved.Instead, they are said to be choosing to alternative sources, such as Australia and Brazil, to make up the shortfall. SomehavealsoraiseddoubtsastothestrengthofChinesedemand.Manyspotsteelproductpriceshave falleninspiteofhighermilllistprices.SourcessuggestthatChinesetradersaretakingpositionsbutmillsare notbuying. Inaddition,Chineseironoreproductionreachedanalltimehighof101.6mtonnesinJune,andwasstillup 27%yoyinJulyat97.6mt.AswellasincreasingChinesesteelproduction,thisgrowthhasbeendrivenby higherironorespotprices.Manyhighcostminersneedanimportpriceofover$120/ttooperateprofitably. Forwardpricescouldfall Q4 contract iron ore prices will already be lower than the previous quarter as the iron ore average index priceforJuneAugust(whichwillsetthepriceaccordingtoValeandRioTintospricingformula)is12%lower thanthepreviousthreemonths. IfcontractpricesinQ4arelowerthanspotpricesthiscouldremovesomesupportforhighspotprices.The endofthemonsoon seasoncould alsoincreasesupply and lowerprices.Forwardswapsforironorehave alreadyfallen.On24AugustQ4swapsfellfrom$132/tto$129/t.
01September2010(Issue3410)SteelBusinessBriefing2010 7

Chinasironoreimports bycountryoforigin

Source:MacquarieBank

TheSteelIndex:ironore

62%Fefines,$/dmtcfrChina Source:TheSteelIndex

CompanyProfile
SBBsWorldSteelReview

TataSteelEurope
Whatisthecompany? TataSteelEurope(TSE)istheEuropeanarmofIndiansteelmaker,Tata,includingitsCorussubsidiary.Itis Europessecondlargeststeelmaker,withmajorsteelmakingfacilitiesintheUKandtheNetherlands.Italso hasoperationsacrossEuropeaswellasfacilitiesinNorthAmerica.TSEisheadquarteredinLondon. WhatdoesTataSteelEuropeproduce? TSEsCorusStripProductshasaround12mt/yofcrudesteelmakingcapacitybetweenitsPortTalbotplant inWalesandIJmuidenintheNetherlands.ItalsohasaninstalledcapacityinmainlandEuropeandtheUKof around13mt/yofHRC,9.1mt/yofCRC,3.3mt/yofHDG,1.2mt/yoftinplate,and600,000t/yofcoated sheet.ItalsohassomespecialsteelstripcapacityintheUSA.CorusLongProductshasaninstalledcapacity of2.5mt/yofblooms,800,000t/yofbilletand1mt/yofslabwhichcanberolledas1mt/yofplate,1.8mt/ yofsections,1mt/yofwirerodand300,000t/yofrails.Itsspecialsteeldivisionhasa1.2mt/ymeltshopand arollingcapacityof600,000t/yofengineeringsteelbarand80,000t/yofbrightbar.Inadditionitshastube makingoperationsintheUK. Whatisthecompanysfinancialposition? TataSteel,TSEsparent,reportedaftertaxprofitsof$393monrevenueof$5.9bninthequarterended30 June2010.Intheyearto31March2010itreportedlossesof$447monrevenuesof$22.8bn. Whyisthecompanyinteresting? On27AugustCorusStripProducts,partofTSE,signedanMoUagreeingtosellitsTeessideCastProducts (TCP) plant in the UK to Thai steelmaker, Sahaviriya Steel Industries (see page 1). The plant has been mothballedsinceFebruaryafterstrugglingtosellitsproduction.Aconsortiumofcompanieshadagreed an offtake agreement for 80% of TCPs slab until 2014. However, the agreement was broken by the consortiuminthemidstoftheeconomiccrisis. EarlierinAugustCorusStripProductsannounceda185m($289m)investmentinitsPortTalbotworks insouthWales.BlastfurnaceNo.4attheplantwillberebuilt,bringingironmakingcapacityattheplant to4.6mt/y.WorkwillstartinJuly2012. The company is rolling out a new operating structure which will unite its divisions into European hubs based on customer needs. This will better match production planning with demand and provide fast dependable delivery, the company says. As part of the UltraLow CO2 Steelmaking (ULCOS) project, TSE plans to commission an experimental 70,000 t/y blast furnace in IJmuiden, Netherlands, in January 2011 which could cut CO2 emissions by 20%,or80%withcarboncaptureandstorage.

Abriefhistoryof TataSteelEurope

2010 2009 2007 2006 2001 1962 1951 1917 1907

TSEagreesthesaleof TeessideCastProducts(TCP) intheUKaftertheplantis mothballedinFebruary Thecompanyannouncesa newinvestmentprogramme atitsPortTalbotworksin SouthWales Aconsortiumwhichwas buying80%ofTCPsslabpulls outofitsofftakeagreement TataSteelacquiresAnglo Dutchsteelmaker,Corus,for $12bn TheEuropeanCommission approvestheacquisitionof CorusbyTata Crudesteelproductionends inLlanwern TheLlanwernsteelworksin SouthWalesiscommissioned TheAbbeyworksinPort Talbot,laterCorusPort Talbotworks,isestablished TheTeessidesteelworksis founded TataSteelisfounded

CEO,KirbyAdams(left),whoinitiatedthemove to TSEs new operating structure, is stepping down to return to Australia where he has citizenship. From 1 October, KarlUlrich Khler (right), who was executive chairman at ThyssenKruppSteelbeforejoiningTSEthisyear, willtakeoverasCEO.

Formoreinformation,visit:
www.corusgroup.com

01September2010(Issue3410)SteelBusinessBriefing2010