Dr. Donald Fosnacht PhD

GLG News^SM Analyses by Donald Fosnacht(?)

How will consolidation impact Asian Steel?

May 29, 2007

Analysis of:Asia next stop in steel M&A wave: IISI head | www.reuters.com

World wide consolidation in steel appears to be inevitable and Asia is the next area of real opportunity for significant consolidation activity.  Some movement in this direction has occurred with the alliance of different companies under the Nippon Steel umbrella or the combination of NKK and Kawasaki Steel under JFE, but more is very likely in the future.  A consolidated Chinese industry would put tremendous pressure on suppliers of raw materials to the world's largest steel producing region and might change the dynamics of pricing on a long term basis.  In addition, as mentioned by the article author, China is investing in significant R& D capability and likely will become a dominant owner of intellectual property concerning steel technologies.  What scenarios are likely for China and its Asian neighbors?

Non-Ferrous and PGMs on the Duluth Complex in Minnesota

November 7, 2006

Analysis of:Chris Dundas, chairman, Duluth Metals Discusses Prospects | www.robtv.com

The growth of the Asian Market has set the course of metals pricing to new all time highs.  The market conditions have resulted in the exploration of new targets that include the so-called Duluth Complex in Northeast Minnesota just below the Canadian Border.  Exploration by companies such Polymet, Franconia Minerals, Teckcominco, and Duluth Metals has uncovered potentially very significant copper, nickel, cobalt, and precious metals resources that could become the next Sudbury for the non-ferrous industry.  The discussion by the Chairman of Duluth Metals gives some good background on the potential for Northeast Minnesota and the prospects of continued high metals prices for non-ferrous and precious metals such as gold and the platinum group of metals.  Scientifically, the metals are in the mining district.  It will be important to follow the developments in this US state because it could develop into a world-class non-ferrous mining district.

Could this new technology open doors to Al automotive sheet?

June 16, 2006

Analysis of:Multi-Alloy Casting is Called a Technology “Breakthrough” | www.33metalproducing.com

Aluminum producers continue to strive to be a larger part of the automotive market with their sheet offerings.  They have made some in-roads, but the necessity to have a combination of both excellent formability and dent resistance has prevented widespread adoption of aluminum in automotive body panels.  A new technology for casting aluminum alloys may allow aluminum sheet products to be produced that will have differing mechanical properties from the outside surface to the interior core of the metal.  This variation may allow multi-graded products with varying properties to meet the surface and strength required for automotive body panel applications, and thus, allow further penetration of aluminum into this large market to the detriment of steel sheet applications.

If Mittal does not succeed, what will be next?

June 16, 2006

Analysis of:Arcelor Holds Firm Against Mittal's Bid | www.33metalproducing.com

Lakshi Mittal and the Mittal organization crave continued growth for the Mittal steel business.  Mittal has made improvements in his offer to Arcelor and Arcelor has been very aggressive in trying to fend off their unwanted suitor through their own potential merger with the Russian steel giant Severstahl.  Whether Mittal is successful with this move or not, there is little doubt that it wants to continue to grow beyond its current size.  What will be the next logical targets if Arcelor is successful in defending its turf?

Would Thyssen-Krupp or Corus be able to fend off Mittal if they were targetted?

Mittal-Arcelor -- The Dance Continues

May 15, 2006

Analysis of:Mittal says it may revise Arcelor offer if bis is recommended | ap.yorknewstimes.com

Lakshi Mittal's desire to continue the steel expansion of his firm is still progressing.  His ultimate desire goes well beyond the acquisition of the Arcelor Group.  Already the largest steel maker, Arcelor likely will be only another stepping stone on the way to a 200 million ton steelmaker.

The current offer for Arcelor will have to be modified for the purchase to be successful.  His current bid of 25% cash and 75% Mittal stock likely is not adequate especially since it is unclear what control the stockholders will have in the combined venture since the majority holdings will still be in the Mittal Family.

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