Monday, April 5, 2010

Steel production mirrors demand recovery .......

ISHITA AYAN DUTT Kolkata, 4 April

In a sure sign of demand recovery, world crude steel production for 66 countries reporting to the World Steel Association (WSA) was 108 million tonnes in February, an increase of 24 per cent from the same month last year.
The capacity utilisation figures of WSA, representing 180 steel producers including 19 of the world’s 20 largest steel companies, boosts the optimism further. The world crude steel capacity utilisation ratio for the 66 countries in February 2010 was 79.8 per cent, a 15-month high since September 2008. Compared to February 2009, the utilisation ratio in February 2010 increased by 12 percentage points. That includes the bigticket acquisitions made by Indian steelmakers prior to the slowdown.
Steel producers — Tata Steel, Essar Steel and JSW Steel — have ramped up capacity utilisation at mills in North America and Europe.
JMehra, director Essar Steel, said the capacity utilisation at Algoma (Canada) was 80 per cent. Essar Steel acquired Algoma in 2007. However, owing to the downturn, the production of Algoma had to be adjusted to meet production requirement.
Corus, acquired by Tata Steel around the same time, was operating at 80 per cent capacity, said a company spokesperson. Recently, the Tata Steel management had indicated that before the end of the financial year,
capacity utilisation would be 100 per cent.
However, JSW Steel, which completed the takeover of its US mills in 200708, had improved capacity utilisation at arelatively low scale. Last year, during the downturn, the mills were operating at 15-20 per cent.
Jayant Acharya, director (sales and marketing), JSW Steel, said it was below 30 per cent and the cost of producing slabs had increased on the back of raw material cost while finished product prices had not increased to that level.
In the US, production in February 2010 was six million tonnes, an increase of 51.3 per cent compared to February 2009.
Though the global economy had overcome the downturn blues, it was still uncertain as to when the production would be normalised.
Mehra said the growth in the first quarter in the US was positive, but it would be difficult to forecast when Algoma would have 100 per cent capacity utilisation. “We have to see how it goes,” he said.

IMF draft ups 2010 world growth forecast, say reports

REUTERS Milan, 4 April
The world economy could grow 4.1 per cent this year, 0.2 points more than previously forecast, the International Monetary Fund (IMF) said in the latest draft of its World Economic Outlook, Italian news agency ANSA reported.
The US economy is now expected to grow 3.0 per cent this year, instead of the 2.7 per cent forecast in the IMF’s January report, according to ANSA and Italian newspapers which published the draft figures on Sunday.
The IMF is due to publish its next World Economic Outlook on April 21, business newspaper Il Sole 24 Ore said.
According to the draft, euro zone growth this year is now forecast to be 0.8 per cent, down 0.1 points from January’s estimate. In 2011, the figure was seen at 1.5 per cent, also down 0.1 points, the reports said.
Europe “is coming out of recession more slowly than other regions,” the draft said, because there are “various forces which are putting a brake on recovery,” including Greece, Il Sole 24 Ore said in its report on Sunday.
Europe’s biggest economy, Germany, is expected to report a 1.2 per cent rise in gross domestic product (GDP) in 2010 and 1.7 per cent in 2011, the draft says according to the reports. Those figures are down 0.3 points and 0.2 points respectively from the January forecast.

Indian ADRs gain $7 billion

Indian stocks trading on American bourses have added a whopping $7 billion to their cumulative market capitalisation past week, with private sector lender HDFC Bank emerging as the biggest gainer. The 16 Indian entities listed on the New York Stock Exchange and Nasdaq added a net of $7 billion to their market capitalisation for the week ended April 2. Among these 16 companies, listed as American Depository Receipts, HDFC Bank, which leads the pack of gainers, saw its valuation rising by $2.25 billion to $21.88 billion. Another private sector lender ICICI Bank saw its valuation climbing by $1.54 billion to $24.26 billion. PTI

My Comments:
I don't think I have to comment here can read and understand it....very simple make..I read this news in todays..BS.. and I have pasted the same here....I also read somewhere that LN Mittal, Tisco, JSL and Uttam Galva are ramping up the capacity....and this article one can read that Corus which was taken over by Tisco , and was cosidered as a drag for the Co, is working on 80% capacity....Great news isn't it, for Tisco and world economy!
IMF is also projecting more growth then expected.....what else we need......
I believe that if there are no big casualty like Lehman Brs I think we should inch higher for this year as well though the return on percentage term maybe not as big as last year but Midcap and Smallcap can outperform the market in big big way....which I have written here many times....that this can be the Year of Mid/Small cap or microcap/penny cap may end up seeing many penny stock(in which I put stock below Rs 10 category or below Rs 20..)giving big return....but one should  be LUCKY enough to be there in not all will move...

1 comment:

  1. Rajeevbhai, I am big believer of Tata Steel and will hold on to all of my holdings from a few decades. Their capacity, and the ownership of the most fundamental commodity that this world needs as we get to 10B people will do them a lot of good. Of course, it will never behave like a small cap or midcap giving 200% to 1000% in any given year (except when in deep undervaluation as in 2008-2009-2010). So, keeping that in mind, I will be adding other small/mid caps in this industry later this year.