Articles in Category: Company News

In a surprise move, Andrew Harding, the head of iron ore at commodities miner Rio Tinto Group has been passed over as CEO to replace outgoing Sam Walsh on July 2 by relative newcomer to the group, Jean-Sebastien Jacques who only joined in 2011 and has headed up Rio’s copper and coal divisions, the Sydney Morning Herald reports.

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Harding has been with Rio for 25 years and had been expected to replace departing Walsh in part due to his experience in iron ore which is central to Rio’s existence. The miner generates about half its revenues and around 90% of its earnings from iron ore sales, just 9% from aluminum and copper and the balance from diamonds and other minerals.

Rio Tinto’s Future

The move is seen as part of future plans for Rio to reduce reliance on iron ore and to divest itself of coal assets. Although the firm would argue otherwise — its cost of production for iron ore is a fraction of what it was five years ago — the firm’s expansion into an already oversupplied market is seen by many as a dead end.

Rio Tinto increased iron ore production by 11% last year to 327.6 million metric tons, and that should rise another 7% to 350 mmt by the end of this year, the Telegraph’s Questor column reports. The miner is not alone as rivals BHP Billiton and Fortescue also ramp up production to offset falling prices.

Source Telegraph

Source: Telegraph

This year, the policy appears to have paid dividends as Chinese demand has risen on the back of a short-term boost from a huge government backed loan splurge at the start of the year, but there are signs the economy there is slowing again. Read more

smu-ad-2Our own Lisa Reisman (Executive Editor, MetalMiner) will be live and in-person at the SMU Steel Summit Conference 2016, August 29-31 at the Georgia International Convention Center in Atlanta, providing our steel price forecast to those in attendance. The conference will also feature four keynotes, including:

  • Alan Beaulieu (Principal, Institute for Trends Research)
  • Lourenco Goncalves (President and CEO, Cliffs Natural Resources)
  • Roger Newport (CEO, AK Steel)
  • Christopher Oakley (Vice President and Regional Executive, Federal Reserve Bank of Atlanta)

Other speakers include representatives from Big River Steel, IHS Global Insight, Cargill Metals, McNichols Co., Kloeckner Metals Corporation, Steel Market Development Institute, Steel Dynamics, Precoat Metals and more!

Learn more about the event and register here.

Last week at the SAP Manufacturing Industries Forum in Lombard, Ill., we got a glimpse into how Toyota Material Handling North America is helping its customers with information about the equipment they use and how TMHNA manages all of that collected user information using SAP’s Hana database management system.

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Alan Cseresznyak, CIO and Senior Vice President of TMHNA — the seller and dealer network of all Toyota forklifts and other material handling products on the continent — explained that part of TMHNA’s digital transformation has been helping its customers keep their forklifts and other machines efficiently running.

TMHNAforklifts_550_062016

Many people know Toyota by its cars and its production system but the company is innovating in its materials handing business as well. Source: TMHNA.

“We can identify which parts are breaking down,” Csersznyak said. “We could find out when a certain bolt is breaking loose. Using this data we can also earlier identify and correct manufacturing problems.”

TMHNA’s strategy for service mirrors its customer relationship management strategy.  Csesznyak said TMHNA already forecasts demand from its CRM system. Every single outstanding quotation is created from the CRM system. Profit margins for TMHNA, individual dealers, and other relationship information is all in the system.

Using SAP Hana and other tools, TMNHA desires to have the same type of setup as CRM system for maintenance, with sensors built into individual parts to create a better ability to capture whole unit operations data.

“The cost of getting maintenance done is not a major cost for any of our customers,” Cseresznyak said. “What they are looking for is more uptime. The more we know about individual maintenance, the more uptime we can provide. On the car side, they used to recommend an oil change every 3,000 miles, now it’s 7,500 miles because of better data.”

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TMHNA has its own engineering department and Cseresznyak said they will build their own sensors if need be.

“We don’t believe it’ll be a major cost on the forklift to purchase the sensors provided we can provide that uptime and superior customer service,” he said. “Devices for telematics used to be thousands of dollars. Now, we are adding a CalAmp device that’s under $200. Everything is becoming commoditized.”

They say there is nothing like competition to spur innovation and improve efficiency but the same could be said of adversity. Volkswagen is a case in point.

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After the biggest corporate scandal of the decade, VW finds itself in an invidious position. Last year it posted a $1.82 billion (€1.6 billion) net loss, its worst ever result in 78 years, as it recorded $18.3 billion (€16.2 billion) of charges to cover the cost of fixing diesel cars caught up in the emissions reporting affair.

Share Prices Down

Sales held up remarkably well when you consider the betrayal of trust the firm’s actions invited, but the share price remains 28% below its pre-scandal level after recovering from an initial 40% fall. Nevertheless, VW’s share of its home European market have fallen to a 10-year low and although sales rose slightly in May they rose more slowly than the 10 other top-selling marques across Europe according to an Financial Times article. From 12.9% market share in 2013, VW has fallen to 11.1% in May and spurred the board into action.

2013vwbeetletdi_565

Can VW turn its fortunes around? Perhaps with Electric Beetles? Source: VW

VW has announced a number of targets. First, an ambitious move into electric vehicles, saying the company will introduce 30 electric models by 2025 with annual sales of between 2 and 3 million units. To achieve this, VW is opening up the doors for collaboration with external parties, planning to spend $11.2 billion (€10 billion) on new technologies, acquisitions and venture capital investments. Read more

Brazilian mining company Vale SA will not financially support Samarco, a joint venture with BHP Billiton, if the company is not able to resume operations, Vale’s head of investor relations said on Thursday.

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Rogerio Nogueira told analysts at an event in Sao Paulo that he did not believe Samarco would need financial support, but that in the event its mine was unable to get permission to restart — there was a major disaster at the dam last year when a tailings dam failed last year —  Vale would not fund Samarco. The joint venture’s iron ore mine closed in November.

Vale received a favorable decision this week when a Brazilian judge ruled it would not have to defend itself against a $5.7 billion civil suit in the matter.

smu-ad-2For the second consecutive year, our own Lisa Reisman (executive editor, MetalMiner) will be presenting at Steel Market Update’s Steel Summit Conference in Atlanta. Lisa will provide an update on the latest in steel prices as well as a glimpse at our Monthly Outlook and metals forecasting product.

The event, taking place August 29-31 at the Georgia International Convention Center, brings together manufacturing companies, fabricators, wholesalers, service centers, trading companies, steel mills, toll processors and other companies in the steel industry for three days of illuminating discussion and tangible takeaways.

Learn more about the event here.

 

If at first you don’t succeed try try again, the old saying exhorting stubborn determination goes, and so it seems the case for metals consumers who believe they have been unfairly forced to pay higher metal costs than should have been the case.

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On this occasion, I speak not of aluminum consumers but of those buying its sister metal zinc. Last year a case for monopolistic and anti-competitive behavior was brought against the trading arms of JPMorgan Chase, Goldman Sachs and Glencore under antitrust law in New York citing the Sherman Act Section 1, and 2. Read more

Today in metals, a federal judge ruled that a zinc price-fixing lawsuit against Glencore and its New Orleans warehouse unit can move forward. Chinese giant Baosteel has cut prices for July deliveries as it feels the effects of heavy U.S. tariffs.

Glencore/Pacorini Will Face Zinc Warehouse Lawsuit

Executives at a metals warehouse firm owned by commodities group Glencore allegedly ordered workers to falsify documents in New Orleans to manipulate the zinc market, according to a complaint filed by zinc purchasers in a U.S. Federal Court. On Monday, a U.S. judge in Manhattan allowed a private antitrust lawsuit to go forward against two units of Anglo-Swiss Glencore Plc.

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The suit accuses Glencore and its Pacorini Metals USA warehouse company of trying to monopolize the market for special high grade (SHG) zinc, driving up its price.

Her 62-page decision cited allegations made in the complaint filed by zinc purchasers alleging that Pacorini Metals USA created false bills of lading, which are receipts given by transporters confirming shipment of goods. U.S. District Judge Katherine Forrest in Manhattan said that the zinc purchasers had alleged sufficient facts for the case to go forward.

Baosteel Cuts Prices

China’s biggest listed steelmaker, Baoshan Iron & Steel (Baosteel), has cut its main steel product prices for July delivery, the company said in a statement on Monday.

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Prices for hot-rolled coil and cold-rolled coil were lowered by $30.37 (200 yuan) and $27.32 (180 yuan) per metric ton, respectively, according to the statement.

Steel shipments from the U.S. were largely unchanged from March to April and Brazilian police have alleged negligence was responsible for the Samarco disaster.

AISI Reports April Steel Shipments

The American Iron and Steel Institute (AISI) reported today that for the month of April, U.S. steel mills shipped 7,379,330 net tons, a very small increase of 0.03% from the 7,377,392 nt shipped in March, and a 4.1% increase from the 7,087,864 nt shipped in April 2015. Shipments on the year-to-date are 28,847,471 nt, a 0.7% decrease vs. 2015 shipments of 29,046,995 nt for four months.

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A comparison of April shipments to March’s shows the following changes: hot-rolled sheets, up 2%, cold-rolled sheets, up 2% and hot-dipped galvanized sheets and strip, down 2%.

Brazilian Police: Samarco Dam Was a Disaster Waiting to Happen

Brazil’s federal police, on Thursday, accuse mining company Samarco, a joint venture between Vale SA and BHP Billiton, of willful misconduct in relation to a deadly dam burst last November, saying the company had ignored clear signs the dam was at risk of collapsing.

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Police said Samarco had skimmed on safety spending, focusing instead on increasing production despite obvious indications, such as cracks, that the dam was in danger of a breach.

It’s not an unreasonable question. Certainly in Europe, few if any steelmakers are making any money.

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Capacity utilization is woefully low forcing steelmakers to fight for sales and depriving them of any price-setting opportunities. Steelmakers and much of the media lay the blame on China’s doorstep. Although over half of China’s major producers made losses in 2015, exports soared by 20% to 112 million metric tons last year, more than the total output of the world’s second-largest producer, Japan.

Source: Financial Times

Source: Financial Times

Meanwhile, Europe’s steel demand is 25% lower than before the 2008 financial crisis according to the Financial Times and, although there has been some rationalization, it has been limited. Read more