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Russia’s Micex Falls 2nd Day; Sberbank, Norilsk, Gazprom Decline
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=anPYLe5sDKrA
By Alex Nicholson
Oct. 27 (Bloomberg) -- Russia’s 30-stock Micex Index slid for a second day, retreating 0.3 percent to 1,520.88 at the start of trading in Moscow. OAO Sberbank, OAO GMK Norilsk Nickel and OAO Gazprom declined.
To contact the editor responsible for this story: Alexander Nicholson at anicholson6@bloomberg.net
Last Updated: October 27, 2010 02:32 EDT
RusAl first half net profit up $97 mln to $1.365 bln after reassessment
http://en.rian.ru/business/20101027/161100712.html
10:18 27/10/2010
RusAl, the world's largest aluminum producer and owner of a 25 percent stake in Russian mining giant Norilsk Nickel, posted a first half 2010 net profit of $1.365 billion to IFRS, the company said on Wednesday.
Net profit rose $97 million following a reassessment of RusAl's share in associates' profits after Norilsk Nickel published its 2010 interim first half IFRS results on October 7, the company said in a statement.
RusAl's net profit margin rose to 25.7 percent from 23.8 percent.
Profit before tax totaled $1.551 billion compared to an earlier $1.454 billion, while the share of associates' profits increased to $555 million from an earlier $458 million.
The figures include RusAl's stake in Norilsk Nickel.
MOSCOW, October 27 (RIA Novosti)
http://rt.com/Business/2010-10-27/russia-steel-market.html/print
27 October, 2010, 10:12
Russian steel producers are concentrating on domestic demand, with tax breaks for key users, including the carmaking industry, boosting their bottom line while global demand remains subdued.
Severstal has opened two new Moscow region plants to supply car manufacturers with processed steel, with Evraz is upgrading its Urals plant, while MMK President and Chairman Victor Rashnikov says his company plans to invest up to $3 billion in the country to boost capacity.
“We are planning to produce ten million tons of rolled metal this year. We are going to increase the output by some 20% by 2011 and by another 20% the year after. Our aim is to restore the pre-crisis output."
Recent changes in tax law have made it more profitable for Russian companies to sell processed metal to domestic consumers rather than exporting it. In addition, the state has offered tax breaks to foreign carmakers if they buy supplies from Russian producers. It's part of the government's plan to encourage manufacturers to produce cars from start to finish with locally sourced materials.
Dmitry Kolomytsyn, executive director at Morgan Stanley, says that is bolstering the position of local steelmakers.
“The Russian market is recovering, has recovered enough, and will show enough strength next year to consume more finished steel, and therefore make the Russian steelmakers more competitive compared to the global steelmakers.”
Selling processed steel in Russia can be three times as profitable as sending it abroad. But the market is being distorted by government intervention. Worldwide the demand for steel has yet to recover from the financial crisis and prices remain weak. So producers here have little reason not to take advantage of the situation.
MMK revisits plans for development of the Prioskolskoye iron ore deposit
http://www.businessneweurope.eu/dispatch_text13311
Renaissance Capital
October 27, 2010
Event: Yesterday (26 Oct) MMK signed an agreement with Hatch Engineering and Consulting (the Russian division of Canada-based Hatch) on a pre-feasibility study of the Prioskolskoye iron ore project. The deposit's iron ore reserves and mine life are estimated at 2bnt and 60 years. MMK plans to build an iron ore beneficiating plant with the capacity to process 25mn tpa of raw iron ore, and to launch the production of pellets and direct reduced iron (DRI) at the deposit.
Action: The news is positive for MMK, in our view.
Rationale: The agreement with Hatch is MMK's first step towards the development of the Prioskolskoye deposit, which may meet with a positive market reaction. MMK has only 30% self-sufficiency in iron ore, including slag processing, while its remaining needs are supplied primarily by ENRC. The Prioskolskoye project may secure close to 90% iron ore self- sufficiency for MMK in the long term, on the company's estimates, while DRI may be supplied to EAF-based steel-making facilities in Russia and Turkey (Atakas site). The high-grade raw iron ore (36-40% Fe) of the Prioskolskoye deposit and favourable geological conditions in the Kursk Magnetic Anomaly region should enable MMK to build a mine comparable to NLMK's Stoilensky GOK and Metalloinvest's Lebedinsky GOK in terms of efficiency. We note that if MMK decides to go ahead with the Prioskolskoye project, it may require significant investment commitments. The initial stage of the project may take four-to-five years, including the development of infrastructure, and will require $3-4bn of capex. However, efficient upstream integration has become a key success factor for steel mills across the globe, so we think MMK's announcement may find investor support.
Boris Krasnojenov
Russia's RusHydro power output down 16% on year in Jan-Sep
http://www.hydroworld.com/index/display/news_display.1290202615.html
Prime-Tass English-language Business Newswire
October 26, 2010
The consolidated electric power output of Russian state-controlled hydropower monopoly RusHydro decreased 16% on the year to 55.569 billion kilowatt-hours (kWh) in January-September, the company said in a statement Tuesday.
The company attributed the decrease to a drop in output at the Sayano-Shushenskaya hydropower plant, which was seriously damaged in a deadly explosion in August 2009, and a drop in output of the cascade at the Volzhsko-Kamskaya GES hydropower plant.
RusHydro's output, excluding output of the Sayano-Shushenskaya hydropower plant, decreased 2% on the year to 48.026 billion kWh.
The company expects its combined output to fall to 70.5 billion kWh in 2010, said George Rizhinashvili, deputy chairman of the company's management board.
In 2009, RusHydro increased electric power output 1.7% on the year to 81.608 billion kWh, it said earlier.
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Prime-Tass English-language Business Newswire
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