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Major Events In May 2005 Over Ferrous Raw Materials (2)
May 11:

<Sumitomo Metals marks all-time profits with financial conditions further improved>
Sumitomo Metal Industries Ltd. (SMI) released its consolidated financial results for FY ended in March 2005, demonstrating further record renewal and marking three-year straight increase in profits: Sales 1,236.9 billion yen (BY; up 10.4% from the previous fiscal year), operating profit 182.8 BY (up 96.6%), recurring profit 173.2 BY (2.52-fold increase), and net income 110.8 BY (3.6-fold). In parallel, SMI largely improved financial conditions as ROS (or "Recurring profit ratio to sales") at a high 14.0%, "total liabilities ratio to networth" 1.8 time, and "networth ratio to total liabilities and networth" 25.1%.

<Nisshin Steel also hits record ordinary profits thereby setting to growth oriented strategy>
Nisshin Steel released consolidated results for FY ended in March 2005 with record high ordinary profit: Net sales535.7 BY (up 18.7% from the previous year), operating income 66.8 BY (up 87.1%), income before special items (ordinary profit) 60.1 BY (2.3-fold increase), and net income 24.1 BY (about 2.5 fold). The Company intends to shift its policy from financial strengthening to growth oriented strategy. Other financial parameters were ROS (or "Income before special items ratio to net sales") at 11.2%, "total liabilities ratio to networth" 0.67 time, and "networth ratio to total liabilities and networth" 40.5%.

<US steel prices keep on tracing downward trend>
Steel prices in the US domestic market are still staying on a downward trend. It will take three more months at least before it may come to a halt, or latest by autumn, according to the local market analysts. The US steel prices hit the peak in August - September 2004 then turned down straightly. Excessively high level of inventories is responsible, so they say. Inflow of steel products into the world highest market in the USA could have boosted inventories. Every commodity brand is said to have plunged by $150 or so from the peak levels.

<LME nickel prices set highest this year>
LME nickel prices soared to $16,995 per ton (or $7.71 per lb.) for settlement, and $16,200 (or $7.35 per lb.) for 3-month futures on May 9, both of which representing the highest of current year. Meanwhile the LME inventories at 5,664 tons (at May 6) represents a floor as 5,320 tons in March 1991.

May 12:

<China to abolish preferential treatment for processing trade effective from August 2005>
China's Ministry of Commerce in conjunction with the Customs Authorities will abolish the special treatment in favor of processing trade that virtually exempts Export Tax (equivalent to Value Added Tax) on those export commodities such as steel products processed from imported iron ore, pig iron, ferrous scrap, semi-finished steels, ingots, rare earth metals, phosphate rocks, etc. The abolishment will take effect on coming May 19 to be completed by July 31, 2005 - deadline for completing all trading work counting on the current system.

<US Cleveland-Cliffs also demonstrates good start with favorable Jan-Mar/05 results>
US iron ore supplier Cleveland-Cliffs, Inc. (CLF) posted excellent consolidated results (unaudited) for the Jan-Mar quarter of 2005: Revenue from iron ore sales $219.2 million (up 33.7% from the previous corresponding period), operating income $33.4 million (versus $3.3 million loss in the previous), and net income $25.2 million. Iron ore production for CLF's account was 4.8 Mt in the period versus 4.5 Mt in the comparable 2004 period. CLF's purchase of Western Australian Portman Limited has meanwhile ended up with CLF acquiring in excess of 80% Portman shares eventually.

May 13:

<Australian Mount Gibson to build up 3-Mt/a production capacity for 2006>
Australian iron ore supplier, Mount Gibson Iron (MGI) reportedly shipped in the first quarter (Jan-Mar) of 2005 a total of 509,000 ton of Tallering Peak iron ore with cash proceeds of $18 million. After a lapse of one year from the first shipment in February 2004, iron ore production and shipments have been well on their ways at an annual equivalent rate of 2 million tons (Mt) for 2005. The Company targets a 3-Mt/a capacity buildup for 2006.

<Five Japanese steel mills' cost burden on ordinary profit aggregates 479 billion yen for FY ended Mar/05>
Five Japanese blast furnace steel mills - released consolidated financial results for FY ended in March 2005 show combined total sales amounted to 9,409.2 BY (up 14.9% from the previous FY), operating profit 1,313.2 BY (up 85.7%), ordinary profit 1,281.3 BY, (up 120.2%) and net income 566.7 BY, (up 169.0%) with average ROS at 12.6% (versus 9.1% in the previous). Implications of raw material hike on ordinary profits of the five companies totaled 479 BY in the period (151.7 BY)

<Three Japanese major shipping companies all renew record profits for FY ended Mar/05>
The three Japanese major shipping companies of NYK Line, Mitsui O.S.K., and "K" Line released consolidated financial results for FY ended in March 2005 with combined total revenue 360.7 BY (up 15.6% from the previous FY), operating profit 441 BY (up 73.3%), ordinary profit 436.9 BY, (up 92.0%) and net income 229.3 BY, (up 86.1%) with average ROS 12.1% (versus 7.3% in the previous) and "networth ratio to total liabilities and networth" 27.4% (23.9%).

<JFE Holdings achieves record high ROS at 16.4%>
JFE Holdings' consolidated results for FY ended March 2005 turned out: net sales 2,803.6 BY (up 13.3% from the previous year), operating income 467.2 BY (up 84.2%), ordinary income 460.6 BY (UP 111.0%), and net income 160 BY (up 49.8%). ROS ("ordinary income to net sales") was 16.4% (versus 8.8% in the previous) and "networth ratio to total liabilities and networth" 26.5% (20.0%).

May 17:

<CVRD marks third largest single-quarter net earnings for Q1/05>
According to the operational results for the first quarter (January to March) of 2005 released by Brazilian resources company and world largest iron ore supplier, Companhia Vale do Rio Doce S.A. (CVRD), it marked historically third largest single quarter results, as: gross revenue US$2.328 billion (up 34.5% from the previous corresponding period), operating profit (adjusted EBIT) $795 million (up 36.4%) and net earnings $698 million (up 72.3%). Revenue from iron ore sales was $1,088 million (up 31.7%)
last modified : Mon 04 Jul, 2005 [10:20]
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