A blustery March 25th marked the beginning of the Great Lakes shipping season and the opening of the Soo Locks. The first lake freighter to enter the Locks was the Edwin H. Gott from Great Lakes Fleet Inc. The Gott, named for the former US Steel chairman and CEO, entered the Locks at 11:05 a.m. […]
The domestic steel mills are resorting to adjustments in supply as a weapon against the chronic short lead times which are helping to push flat rolled steel prices lower and lower. The heavy lifting is being done by the integrated steel mills, especially by U.S. Steel which has taken three blast furnaces down over the […]
Steel Market Update saw an interesting report on the impact of lower scrap prices to the steel industry. The report was produced by metals and mining analysts, Timna Tanners of Bank of America Merrill Lynch Research for her clients. A question Steel Market Update receives on a regular basis is what is the marginal cost […]
Essar Steel Algoma announced a return to profitability with a net income of CDN$26.8 million for the third quarter ending December 31, 2014, after reporting a net loss of CDN 38.6 million for the same period of 2013. Steel shipments for the quarter increased 4.7 percent year over year to 618,538 tons. Average realized sales […]
USW Local 2251 reports that Essar Steel Algoma is terminating 55 positions due to a decline in plate steel orders. According to a report by Soo Today, most of the employees have not completed their probationary period. The job cuts follow an announcement Jan. 23 confirming a contract for 1500 tonnes of plate for construction […]
Flat rolled steel prices continued to drop this week as the domestic steel mills struggled with holes in their order books due to growing inventories at the service centers, a sharp drop off in pipe and tube orders associated with the energy markets, and the continued flow of imported steel (which is part of the […]
Now that Essar Steel Algoma has its liquidity problems under control, the company is embarking on a CDN $350-$400 million investment plan in its steel mill located in Canada that will span the next 5 to 7 years. The plan includes optimizing operating capability, enhancing product quality, modernizing production lines and expanding the company’s product […]
Low oil prices and the proliferation of pipe and tube imports at below market prices are causing manufacturers to idle mills and lay off workers. The latest round of layoffs comes from Tenaris which announced it will lay off 500 employees in Conroe, Texas and in Blytheville, Arkansas. “The energy industry’s present circumstances have driven […]
US Steel announced Monday it will idle its US Steel Tubular Operations in Lorain, Ohio. In a letter to employees, US Steel said the layoffs are a “result of a decline in tubular market conditions, which is impacting demand for the plant’s products.” Layoffs affecting 614 employees will begin around March 8 and continue through […]
Flat rolled steel prices began to stabilize this past week after having peaked in the middle of August at $675 per ton (hot rolled) and then slowly sliding to a low of $630 per ton during the week ending November 1, 2014. The SMU HRC average actually rose slightly to $635 per ton this past […]
Steel Market Update is beginning to see weakness in demand based on the results of our last two flat rolled steel market surveys. The manufacturing companies are the first to report the weakness and service centers are beginning to follow. Our Premium (and free trial) level members can review the Power Point presentation that we […]
Essar Steel Algoma reported CDN $85.2 million EBITDA for second quarter FY 2015 ending September 30, 2014. Net income was CDN $52.9 million compared to a net losses of CDN $80.8 million in Q1 FY 2015 and CDN $110.1 million in the same period in 2013. Shipment volume increased 28 percent from the previous quarter […]
Essar Steel Algoma announced a “turnaround performance” in their second quarter FY 2015 guidance for the period ending September 30, 2014. The company expects second quarter steel shipments to equal 680,000-690,000 tons with EBITDA of CDN $75-85 million, compared to 530,000 tons and CDN $12.4 million EBITDA in Q1. Second quarter EBITDA projections far exceed […]
Essar Steel’s Canadian entities have been struggling with financing this year and now that Essar Steel Algoma problems appear resolved, Essar Steel Minnesota LLC (ESML) finds itself in dire need of capital. The $1.8 billion taconite plant under construction in Nashwauk, Minn., failed to raise the $361 million in equity needed in time to secure […]
Consolidation may not be over yet. We saw a report this evening out of Minnesota about how Essar Steel Minnesota has failed to secure financing to complete the $1.8 billion taconite pellet facility. The company’s India parent company was so over-leveraged it was put on the top ten watch list by Credit Suisse one year […]
Essar Steel Algoma has received permission from the Ontario Superior Court of Justice for a recapitalization and refinancing plan that was approved by shareholders in a September 10, 2014 meeting. The Plan of Arrangement allows for a capital infusion of up to $100 million from the Essar Global Fund Ltd to complete scheduled capital improvements […]
On Monday, Nucor announced their intention to acquire Gallatin Steel and its approximately 1.8 million tons of hot rolling capacity. Today, AK Steel and Steel Dynamics (SDI) completed the purchase of the Severstal North America assets. The biggest pieces of the Severstal deal are the Dearborn steel mill, which went to AK Steel, and the Columbus […]
On Monday, Nucor announced their intention to acquire Gallatin Steel and its approximately 1.8 million tons of hot rolling capacity. On Tuesday, AK Steel and Steel Dynamics (SDI) completed the purchase of the Severstal North America assets. The biggest pieces of the Severstal deal are the Dearborn steel mill, which went to AK Steel, and the […]
We will conduct our early August steel market analysis (survey) beginning first thing on Monday morning. If you receive an invitation to participate please take a few minutes to click on the link which will take you to SurveyMonkey.com where you can interact with our questionnaire. If by chance you would rather direct someone else […]
With the announcement of the sale of Russian owned Severstal North America assets to AK Steel (Dearborn, Mountain State Carbon & Joint Ventures) and Steel Dynamics (Columbus) for $2.325 billion, the market is now asking what, or who, is next. There are two mills that are being mentioned. One, Gallatin Steel, a hot rolled mini-mill […]
Essar Steel Algoma would like to stress that it is has not filed for bankruptcy or commenced insolvency proceedings in Canada or the U.S. according to a clarification document received by SMU. After reaching an agreement with its parent company for an infusion of cash, deleveraging of its balance sheet, and refinancing of its senior […]
Essar Steel Algoma has filed for Chapter 15 bankruptcy protection at the U.S. Bankruptcy Court in Delaware and the Ontario Superior Court of Justice as part of its restructuring efforts. The filing under Chapter 15 in the U.S. is a recognition proceeding,” said a spokesperson for Essar Steel Allgoma. “The sole purpose of the US […]
In the last issue of Steel Market Update I warned that there are lots of rumors swamping the steel market as negotiations for Severstal NA heat up (or are perhaps already over) and Gallatin entertains bids on their mill (half owned by Gerdau and half ArcelorMittal). The other mill issue is the Chapter 15 (Canadian […]
Essar Steel Algoma Inc., announced on Wednesday that Esssar Global Fund Limited, will provide $300 million of equity infusion along with planned refinancing of Algoma’s senior secured debt. The following press release from Essar Steel Algoma contains details of the agreement. SAULT STE. MARIE, ONTARIO, July 16, 2014 – Essar Steel Algoma Inc. (“Algoma”) announced […]
SAULT STE MARIE – ESSAR Steel Algoma Inc. announced today the Company and USW Local 2724, the union representing the Company’s technical, professional and front line management employees, have ratified a collective agreement. Members of Local 2724 voted today in favour of the new agreement which comes into effect August 1, 2014 for a twenty […]
Steel Market Update spent an extraordinary amount of time on today’s price ranges and averages. There has been a lot written recently about demand supporting prices and the lack of supply supporting prices. However, the deeper we dug the more questions we began to ask about what is real and what is a little murky. […]
Essar Steel Algoma and USW Local 2742 have reached a tentative agreement for the Company’s salaried employees. The agreement has been unanimously recommended by the USW bargaining committee, said Essar Steel in a statement on Friday. Special Membership meetings will be held on Tuesday, June 24, 2014 and voting will be held on Wednesday, June […]
I was asked a number of times today – in a couple of different ways – why Steel Market Update has not adjusted our Price Momentum Indicator from Neutral where it has been for about one month to Lower. The reality is we have been watching spot flat rolled pricing quite closely to see at […]
The Canadian International Trade Tribunal has decided that imports of hot-rolled carbon steel plate from six countries “has not caused but is threatening to cause injury to the domestic industry.” The complaint was issued by Essar Steel Algoma against plate steel originating in or exported from Brazil, Denmark, Indonesia, Italy, Japan and the Republic of […]
We have been getting mixed messages regarding the Ecorse or USS Great Lakes steelmaking operations. Our sources have been advising us that there have been plans to bring the furnaces and #2 BOP back up over this past weekend (did not happen) and then again today (still not up). Other sources close to the situation […]