Are BlueScope shareholders happy? Just recently on 13th August BlueScope revealed the Joint Venture with Nippon Steel Corporation and as stated in this article - the share price jumped and the debt levels of BlueScope were reduced drastically! Now the iron ore and coal prices have eased also for internal purchases! Lets have at look at a few details: The biggest one is that BlueScope didn't reveal this new merger due in October as detailed in 1. below? Plus the fact that both of these steel companys made a combined loss of $29 million dollars! But nothing compared to BlueScopes $1 Billion! The productive or profitable parts of BlueScope (Asia) has been sold off! What's left? Who's going to be the boss?
- Nippon Steel Corporation as stated by the BlueScope release is a giant in the steel industry! But not only a giant - but about to become the second largest steelmaker in the WORLD! This is because two of Japans biggest steelmakers are merging in October 2012! Here is the story from Bloomberg:
BlueScope Nippon JV - more than one player?
Bloomberg reported that Nippon Steel Corporation and Sumitomo Metal Industries Limited, which will merge in October 2012 to become the world's second largest steelmaker, widened first year loss estimates on a combined JPY 240 billion in impairment charges.
Nippon Steel faces a JPY 155 billion loss in the six months ending September 30th 2012 due to a JPY 120 billion impairment charge at its unprofitable plants in Hirohata and Sakai in western Japan.
Sumitomo Metal widened its loss estimate to JPY 128 billion from JPY 8 billion on charges for its Wakayama mill.
The two companies left their current profit forecasts unchanged at JPY 10 billion each and will give a full year earnings outlook after the combination is completed on October 1st 2012.
Japanese steelmakers, facing falling prices and intense competition, are paring costs and streamlining to challenge rivals in China and South Korea. The combined company will maintain operations at the Hirohata, Sakai and Wakayama steelworks.
- The other half of the BlueScope story is the share price! Why is it falling again? Above is the latest details from TenBagsFull Share Market Community on BlueScopes ASX share price! Why is it in decline again even after a great gain to 40cents! Don't forget it was $12 plus in October 2008 but has never really clawed its way back!
When BlueScope closed its Number 6 Blast Furnace, it was one of the most technologically advanced in the world and we have plentiful supplies of good quality ore and coking coals at reduced prices. What to do with this most advanced blast furnace! Scrap it! Start developing mini blast furnaces in WA and QLD near the coal & iron ore supply - plus with all the rare earth minerals, nickel, etc - specialised steel materials could be developed. An article by Dr Geoffrey Brooks is professor of engineering mathematics at Swinburne University of Technology in the Business Spectator was right on the mark with his comments. BlueScope management is more interested in the company politics than the manufacturing industry!
You can read another version of his report HERE.
The shareholder meeting will be very interesting - The Roofer predicts a 2nd strike - and the board will be ditched! Strikes seem to be arm in arm with BlueScope and its workers! Something has to give!