According to the latest Metals Activity Report from US based Metals Service Center Institute, US and Canadian metals service centers rebounded in April from unseasonably low levels in March, with year over year shipment increases in nearly all metals categories.

Inventories of both metals remained at levels well below total stocks at the end of April 2007 and were down, as well, from inventories reported at the end of March 2008, with one important exception, the Metals Activity Report from the Metals Service Center Institute shows.

The one exception was inventories of steel products in the United States, which rose slightly, to 12.4 million tons or 2.6% above US steel stocks at the end of March. Metals customers appear to buy only when they need product and service centers have maintained inventories closely aligned with demand.

Shipments of steel products from US service centers rose 3.3% in April, to 4.65 million tons as compared with April 2007. For the year to date, shipments of 17.7 million tons were down 2.8% from volume during the first four months of 2007. Month end inventories of 12.4 million tons were 15.1% lower than April 2007 stockpiles and, at current shipping rates, represented a 2.7 month supply.

Steel product shipments from Canadian metals service centers totaled 328,400 tons, a 6.6% increase from shipments in April 2007. Steel shipments for the first four months of 2008 totaled 1.28 million tons, a decline of 0.7% from the same period a year ago. Steel inventories held by Canadian service centers at the end of April totaled almost 1.1 million tons, or 15.2% below year earlier levels and, at current shipping rates, equal to a 3.3 month supply.

The Metals Activity Report, based on data from metals service centers in the United States and Canada, is produced by the Metals Service Center Institute and a third party econometrics and strategy firm, McCoy, Scott & Co.

Founded in 1909, the Metals Service Center Institute has more than 420 members operating from about 1,200 locations in the US, Canada, Mexico, and elsewhere in the world. Together, MSCI members constitute the largest single group of metals purchasers in North America, amounting each year to more than 65 million tons of steel, aluminum, and other metals, with about 300,000 manufacturers and fabricators as customers.

India’s steel industry is surging ahead, entering into global deals and taking the country’s economy to new heights. The Indian government plans to invest over $350 billion in steel industries related to infrastructure and construction.

The Indian government estimates that steel production would grow at a CAGR of 16 per cent to touch 124.06 MT by 2011-12. India’s steel production capacity is estimated to be 200 MT by 2020.

Following are some of the major steel sector plans currently in underway in India and abroad:

• Arcelor Mittal, the world’s largest steelmaker, plans to set up two greenfield steel projects in India each with a capacity of 12 million ton per annum (MTPA).
• Acerinox SA, the world’s 2nd biggest stainless steelmaker, is joining hands with Japan’s Nisshin Steel to build a steel plant in India.
• Tata Steel , the world’s fifth largest steel maker, plans to double its capacity by 2015, by adding another 35 MT capacity.
• India’s largest steel manufacturer SAIL  is planning to increase its annual production of 12 MTPA to 24.98 MTPA by 2011-12.
• Sinosteel Corp, China’s 2nd biggest iron ore trader, plans to invest $4 billion to build a 5 MT greenfield steel plant.
• Kalyani Steels will set up an integrated steel and power project in West Bengal, at a cost of $1.63 billion.
• $365.7 million investment coming in steel is coming up in Karnataka.
• Mesco Steel plans to invest around $2.8 billion in two steel plants — a brownfield expansion and the other a greenfield project — in Orissa.
• Vedanta Resources plans to enter the Indian steel sector with a 5 MT plant at an investment of about $6.02 billion in Orissa.
• State-owned Steel Authority of India Ltd (SAIL) will invest $5.006 billion in West Bengal. This is almost two-fifths of the $13.27 billion spread planned by SAIL.
• Tata Steel has acquired the Anglo-Dutch steelmaker Corus to become the world’s 5th largest steelmaker, adding 19 MT of steel-making capacity.
• Essar Global has acquired Canada’s Algoma Steel for $1.63 billion and US-based Minnesota Steel.
• Naveen Jindal-promoted Jindal Steel & Power Ltd (JSPL) has bagged the $2.1 billion contract for developing one of the world’s largest iron ore deposits, El Mutun. The project includes a 2 MT steel plant in Bolivia.
• JSW Steel  has acquired Jindal United Steel Corporation, Saw Pipes USA and Jindal Enterprises LLC at Baytown, Texas, for $940 million.
• India’s Steel Strips  Wheels Ltd. has received an order from French car maker Renault SA worth $27.56 million to supply around 1 million steel wheel rims for over 5 years.

Russian steel major Severstal announced that it has reached a binding agreement to purchase WCI Steel based at Warren in Ohio State of US. The acquisition is subject to customary closing conditions, including the receipt of all necessary government and regulatory approvals and is expected to close in late Q2 or early Q3 of 2008.

According to the terms of the agreement, Severstal will acquire all outstanding equity of WCI for a total cash consideration of USD 140 million, implying an enterprise value of USD 327 million based on outstanding net debt as of April 30th 2008. WCI’s Board of Directors has recommended the transaction to its shareholders. Shareholders representing a majority of WCI’s diluted shares outstanding have irrevocably consented to the transaction. The acquisition has the full support of the United Steel Workers.

WCI’s total annual steel making capacity of 1.22 million tonnes is focused on high quality flat rolled steel for use in demanding applications. WCI Steel’s strength is built on “Custom Steel. Custom Service. Creative Solutions.” As an integrated producer of value added, custom steel products serving niche markets, WCI Steel emphasizes customer and technical service. WCI Steel currently produces 185 grades of flat-rolled custom and commodity steel products at its Warren, Ohio, facility. WCI Steel focuses on a wide range of custom flat-rolled steel products, including high carbon, alloy, ultra high strength, and heavy gauge galvanized steel and on developing closer, more responsive relationships with customers. Major customers are steel converters, processors, service centers, construction product companies, and pipe and tube manufacturers.

Mr Gregory Mason CEO of Severstal International and COO of OAO Severstal said “This acquisition is aligned with Severstal’s disciplined approach to growing our US business while creating shareholder value. It solidifies our position as the fourth largest steel producer in the US by raising Severstal’s total US capacity to just under 11 million tonnes per year. The addition of WCI to Severstal’s family will enhance our custom product capabilities and create opportunities to increase profitability in both the short and long-term.”

Mr Leonard M Anthony, president & CEO of WCI Steel said that “During the past few months, the Board of Directors has carefully evaluated strategic alternatives and has concluded that the sale of WCI Steel to Severstal is in the best interests of the shareholders and will enable the Warren, Ohio, facility to prosper in the future. All of us at WCI Steel are committed to working toward a smooth and rapid transition.”

Citi and Raymond James are acting as financial advisors to Severstal on this transaction. Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel to Severstal.

Moelis & Company is acting as exclusive financial advisor to WCI Steel, Inc. McDermott Will & Emery LLP acted as legal counsel to the Company, and Kaye Scholer LLP acted as legal counsel to the Special Committee of the Board of Directors.

About Severstal

OAO Severstal is an international metals and mining company with a listing on the Russian Trading System and the London Stock Exchange. Incorporated in 1993, the company focuses on high-value-added and unique niche products and has a successful track record of acquiring and integrating high-quality assets in North America and Europe. Severstal owns mining assets in Russia, thus securing its supplies of raw materials. In 2007, Severstal produced 17.5 million tons of steel. Revenues were $15.2 billion, and EBITDA was $3.7 billion. EPS was $1.92.

WCI Steel, the Warren-based maker of flat-rolled steel, has agreed to be acquired by OAO Severstal, a metals and mining company based in Moscow, the two companies announced today.

Severstal said it will pay $140 million for all of the equity outstanding of WCI in a cash transaction expected to close in the second or third quarter of this year. Severstal also agreed to assume more than $230 million of WCI’s debt and other obligations as part of the transaction.

Severstal, already the fourth-largest steel producer in the United States, said the acquisition will bring its annual U.S. production to just less than 11 million metric tons per year. WCI’s annual steelmaking capacity is 1.22 million metric tons. Worldwide, Severstal produced 17.5 million metric tons of steel in 2007 and reported revenues of $15.2 billion.

Shareholders controlling the majority of WCI’s stock, as well as the company’s board of directors, already have approved the transaction, as has the United Steel Workers union, WCI said.

WCI employs about 1,300 people, all in the Warren area.

About WCI Steel, Inc.

WCI Steel’s strength is built on “Custom Steel. Custom Service. Creative Solutions.” As an integrated producer of value-added, custom steel products serving niche markets, WCI Steel emphasizes customer and technical service. WCI Steel currently produces 185 grades of flat-rolled custom and commodity steel products at its Warren, Ohio, facility. WCI Steel focuses on a wide range of custom flat-rolled steel products, including high carbon, alloy, ultra high strength, and heavy-gauge galvanized steel and on developing closer, more responsive relationships with customers. Major customers are steel converters, processors, service centers, construction product companies, and pipe and tube manufacturers.

About Severstal

OAO Severstal is an international metals and mining company with a listing on the Russian Trading System and the London Stock Exchange. Incorporated in 1993, the company focuses on high-value-added and unique niche products and has a successful track record of acquiring and integrating high-quality assets in North America and Europe. Severstal owns mining assets in Russia, thus securing its supplies of raw materials. In 2007, Severstal produced 17.5 million tons of steel. Revenues were $15.2 billion, and EBITDA was $3.7 billion. EPS was $1.92.