Search

After its failed attempt to acquire Potash Corporation of Saskatchewan Inc., BHP said it is still interested in blockbuster acquisitions even though targets are becoming fewer and deals more difficult to negotiate. Article also discusses BHP's growth strategy and prospects.

After a string of failed blockbuster mergers, BHP Billiton is likely to pursue smaller acquisition targets to strengthen its core business. The miner is also expected to increase the value of its $4.2 billion stock buyback program.

Mining firm Vale S.A. may be planning an initial public offering for its fertilizer unit, possibly to take place in the first half of next year. Vale will invest $2.5 billion in fertilizer projects in North America, South America and Africa in 2011.

An investigation by the U.S. Commerce Department may find that China illegally subsidized $550 million in aluminum imported to the United States. A decision may lead to higher import duties.

Potash Corporation of Saskatchewan Inc. rejected BHP Billiton's offer to acquire the company for $38.6 billion or $130 a share. BHP says it will take the offer to Potash Corp.'s shareholders, but the potash producer could attract rival bids from other mining giants.

Caterpillar Inc.'s second-quarter profit surged 91% to $707 million from $371 million a year ago. Sales increased 31% to $10.41 billion. Caterpillar expects full-year per-share profit of between $3.15 and $3.85, compared to a previous forecast of between $2.50 and $3.25.

Alcoa Inc. reports a second-quarter profit of $136 million, compared with a loss of $454 million a year ago. Sales rose 22% to $5.19 billion from $4.24 billion last year. The aluminum producer expects demand to improve, although prices may continue to drop into the fourth quarter.

A drop in U.S. steel prices may signal a slowdown of manufacturing activity and decreased consumer spending. Steelmakers are beginning to cut production to stabilize prices.

In tough economic times, aluminum producer Alcoa Inc. has cut nearly $3 billion in costs by laying off workers, shutting down plants, and selling non-core assets. Alcoa will spend $1.5 billion to build a low-cost bauxite mine in the Brazilian Amazon jungle in the hope of becoming a more efficient producer once the economy picks up.

A recent surge in steel output in China and Eastern Europe raises concerns that oversupply may result in a global collapse of steel prices. Expected steel production of 1.5 billion metric tons in 2010 will surpass estimated demand of 1.3 billion metric tons.

ArcelorMittal swung to a first-quarter profit of $679 million, compared with a net loss of $1.06 billion a year earlier. Revenue jumped 23% to $18.65 billion from $15.12 billion.

Boosted by strong demand in emerging markets, ArcelorMittal swung to a fourth-quarter profit of $1.07 billion, compared with a net loss of $2.63 billion a year ago. Revenue dropped 16% to $18.64 billion.

For the six months ended December 31, BHP Billiton reports that profit more than doubled to $6.14 billion from $2.62 billion a year earlier. Revenue dropped 17% to $24.58 billion. The high prices of raw materials and metals are expected to boost the profit of other steel and mining firms such as Arcelor Mittal and Rio Tinto PLC.

Despite extensive cost cuts, Alcoa Inc. posted a fourth-quarter loss of $277 million, compared to a loss of $1.2 billion a year earlier. Most of the losses stem from one-time restructuring and tax charges.

In 2010, China's steel production is expected to increase 10% to about 600 million metric tons. The new output will not exceed demand and is likely to boost the global prices of steel, raw materials, and coal.

A group of U.S. steelmakers claims that the sector has been severely affected by the influx of $2.8 billion in subsidized steel from China. The U.S. International Trade Commission's ruling on Wednesday could result in duties imposed on future Chinese steel imports.

ArcelorMittal announced it will cut 10,000 jobs, mostly affecting workers in Europe and the U.S. The steelmaker also said it will increase production to raise capacity utilization to 70% by the end of the year from 61% in the third quarter.

Steelmakers -including Tata Steel, BaoSteel, and Posco- are asking the European Union to block Rio Tinto PLC and BHP Billiton Ltd.'s proposed iron-ore venture in Western Australia, claiming it will restrict competition and result in higher iron ore prices. Rio Tinto and BHP say the venture will generate savings of $10 billion in production costs.

Plummeting steel demand prompted steelmakers to idle production, but now some producers -including Arcelor Mittal- are moving to reduce capacity permanently through plant closures. It is estimated U.S. steel production was running at 50% capacity at the end of November compared to 78% capacity the year before.

Boosted by cost cuts, Alcoa Inc. reports a third-quarter profit of $77 million - a 71% drop from a year earlier. Analysts had predicted a loss. Revenue fell 33% to $4.6 billion from $7 billion. Article discusses prospects for the recovery of the aluminum sector, and Alcoa's earnings outlook for the near future.

BHP Billiton reports a net profit drop of 62% to $5.88 billion for the year ended June 30, compared with a profit of $15.39 billion the previous year. Excluding charges, income dropped 30% to $10.72 billion, while revenue fell 16% to $50.21 billion. In the year, BHP had a record cash flow of $18.9 billion.

Affected by $1.2 billion in inventory write-downs and costs, steelmaker ArcelorMittal reports a second-quarter loss of $792 million from a profit of $5.84 billion a year earlier, and a 60% drop in revenue to $15.2 billion. In related news, Nippon Steel Corp. reports a first-quarter net loss of 42.25 billion yen from a profit of 82.76 billion yen a year earlier.

Aluminum maker Alcoa Inc. reports a second-quarter net loss of $454 million, and a 42% drop in revenue to $4.24 billion from last year's $7.25 billion. Alcoa has $851 million in cash reserves. Aluminum prices rose 9% in the quarter, and further price increases are expected in the third quarter.

Because of high production costs, steel makers such as Universal Stainless & Alloy Products Inc., Allegheny Technologies Inc., AK Steel Corp, and North American Stainless Inc. have boosted prices 5% to 6% in spite of weak demand. In past recessions, the practice of increasing production and lowering prices to buoy demand has resulted in excessively-low steel prices and bankruptcy for some producers.

U.S. regulators have approved Aluminum Corporation of China Ltd.'s (Chinalco) proposed acquisition of an 18% stake in debt-ridden Rio Tinto. The deal, valued at $19.5 billion, calls for the transfer of assets and convertible bonds to Chinalco. Chinalco and Rio Tinto have already obtained clearance from Australian and German regulators.

Affected by declining steel demand, ArcelorMittal reports a first-quarter net loss of $1.06 billion, and a 49% drop in sales to $15.12 billion. The steel producer is operating at about 50% capacity and will continue to shift production to lower production costs. ArcelorMittal plans to offer $3 billion in shares to lower its debt and shore up its finances.

U.S. Steel Corp. reports a first-quarter net loss of $439 million, and a 47% drop in sales to $2.75 billion. The company plans to offer 18 million shares of common stock and cut quarterly dividends to raise cash and reduce its debt. Capital expenditures in 2009 will be cut by $330 million. U.S. Steel expects a loss in its second quarter.

Byline: ROBERT GUY MATTHEWS MANUFACTURING Steel makers gird for lower prices Weak demand is likely to lead to increased losses in the world steel industry next quarter, which could prompt [...]

U.S. steelmakers have filed a lawsuit before the International Trade Commission against Chinese steelmakers accusing them of flooding the U.S. market with subsidized tubular and pipe steel causing steel prices to plummet and the U.S. steel market to crash. Chinese imports of subsidized steel tripled from 750,000 tons to 2.2 million tons between 2006 and 2008.

Affected by a 26% drop in the price of aluminum to $558 a metric ton and a 41% drop in sales, Alcoa Inc. reports a first quarter loss of $497 million or 61 cents a share. Sales for the quarter fell to $4.15 from $7 billion last year. Alcoa, which has $5.2 billion in unused revolving credit, said it raised $1.4 billion through a convertible-notes offering this quarter.

In an effort to capitalize on stimulus packages in the U.S., Europe, and China, some steel producers are bolstering production to meet an expected construction-related rise in demand. It is argued that excessive production is causing steel prices to drop once again when they had just begun to recover.

Steel giant ArcelorMittal reports a fourth-quarter net loss of $2.6 billion, and a drop in revenue of 21% to $22.09 billion. In the same quarter, the company reduced its net debt by $6 billion to $26.5 billion, and cut its steel production by 45% in response to plummeting demand. ArcelorMittal plans to reduce its workforce by an additional 9,000 workers to conserve cash.

U.S. Steel Corp. reports a rise in fourth-quarter net income to $308 million from last year's $35 million, and a slight rise in sales to $4.57 billion from a previous $4.54 billion. Affected by plummeting steel demand, the company expects to post operating losses. In related news, Nucor Corp. reports a 71% fourth-quarter net income drop to $105.9 million, and a drop in sales of 5.6% to $4.15 billion. Bogged down by charges, rival firm AK Steel reports fourth-quarter losses of $430.6 million.

Affected by plummeting sales, aluminum producer Alcoa Inc. posts a fourth-quarter net loss of $1.19 billion and a 19% drop in sales to $5.68 billion. In the quarter, Alcoa reported charges in the amount of $920 million. Last week, the company announced it would sell assets, cut costs by 50%, and reduce its workforce by 15%.

In an effort to reduce capital expenditures by 50%, aluminum producer Alcoa Inc. plans to cut 15,000 jobs -15% of its workforce-, close additional plants to reduce production by 18%, and sell unprofitable assets. The restructuring charges will cost the company between $900 and $950 million in its fiscal fourth quarter. This year, Alcoa hopes to save $1.8 billion in costs, with $450 million in annual savings in following years, and generate $100 million from the sale of assets.

Pointing towards a possible recovery of the sector, some steelmakers -especially in the U.S. and China- are trying out slight increases in the price of steel and reopening some steelmills that had been shut down because of plummeting demand. Some analysts think steel consumption will stabilize in the second half of 2009, and that the present rise in steel prices may reflect depleting inventories and not an actual increase in demand.

Citing a drop in demand, U.S. Steel Corp. plans to reduce its North American workforce by 13%, or 3,500 salaried and union workers. U.S. Steel has also undertaken production cutbacks including facility shutdowns in an effort to stabilize plummeting steel prices.

Citing a drop in ore prices and the state of the global economy, mining giant BHP Billiton has broken off negotiations to acquire rival Rio Tinto, for which it was offering $68 billion. BHP said the acquisition would raise its own debt too high, and a sale of assets to relief debt would be difficult under present economic conditions. After the announcement, in Tuesday trading, Rio Tinto's shares dropped 37% while BHP's rose 7%.

Byline: ROBERT GUY MATTHEWS In another sign of the troubles in the steel industry, the world's largest steel maker, ArcelorMittal, told a steel workers union that it could eliminate 16 [...]

Byline: ROBERT GUY MATTHEWS Steel makers are suspending and renegotiating contracts with their raw-material suppliers as they grapple with the sudden drop in demand for everything from cars and appliances [...]

The international economic slump has created a sharp downturn in demand for metal ores and minerals, and mining companies have responded by decreasing production to help buoy plummeting prices. Article discusses the production cutbacks, recent earnings, and recovery prospects of mining companies such as BHP Billiton, Companhia Vale do Rio doce, Xstrata PLC, Alcoa Inc., Merafe Resources Lindiwe Montshiwagae, North American Palladium Ltd., Blue Note Mining, OZ Minerals Ltd., and Rio Tinto.

BHP Billiton is weighing options to circumvent objections by European Union regulators to its planned $68-billion hostile takeover of rival mining company Rio Tinto. It is speculated that BHP Billiton's possible spin-offs and sale of assets may total as much as $12 billion.

Steel giant ArcelorMittal reports a 29% third-quarter net profit increase to $3.82 billion, and a 38% sales increase to $35.2 billion. In response to falling demand and prices, the company also announced it will more than double its planned production cuts to at least 35%.

Steelmakers gathered at the World Steel Association conference debate to what extent reduce production to counterbalance falling steel demand and prices. The metric ton of hot-rolled steel has dropped to $780 from $1000 earlier this year. On the average, it costs $650 to manufacture a ton of steel. It is expected that as price nears production cost, the industry will see a new wave of consolidation as small producers are absorbed by larger rivals.

Citing high production costs and dropping demand, aluminum manufacturer Alcoa Inc. plans to layoff 660 employees at its Rockdale smelter in Texas. The move will reduce the company's aluminum production by about 300,000 short tons a year. Alcoa's stock rose 5.6% to close at $22.58 on Tuesday at the New York Stock Exchange.

Mining giant Xstrata PLC has dropped its $10-billion acquisition offer for platinum producer Lonmin PLC opting instead to increase its stake in Lonmin to 24.9%, the maximum allowed before requiring approval from European antitrust regulators. Xstrata, which already owned 10.7% of Lonmin, bought an additional 22.2 million of Lonmin stock for $35.18 per share.

Byline: ROBERT GUY MATTHEWS Citing continuing power supply problems and decreasing demand for aluminum, Alcoa Inc. says that it will lay off 660 people by the end of the year [...]

Boosted by rising commodity prices, Australian mining giant Rio Tinto Ltd.'s first-half net profit more than doubled to $6.91 billion while revenue grew to $27.2 billion from $12.1 billion. Last week, rival BHP Billiton also posted record six-month profit of $9.4 billion. Article discusses how both companies' record financial results affect BHP's efforts acquire Rio Tinto.

Boosted by skyrocketing commodity prices, mining giant BHP Billiton Ltd. posted a 15% net profit increase to $15.39 billion for the fiscal year ended June 30, while revenue rose 25% to $59.47 billion. Article discusses Billiton's stock value, and ongoing negotiations to acquire rival Rio Tinto Ltd.

Skyrocketing petroleum, iron ore, copper, and coal prices are expected to boost mining giant BHP Billiton's full-year profit to a new record high. Billiton's rival and acquisition target Rio Tinto is also expected to post strong earnings. Article discusses how Rio Tinto's financial results may affect negatively Billiton's bid to acquire the company.