Steel: Think Global!

Story 1: The India-born steel mogul, Lakshmi N Mittal's LNM group will invest 100 million US dollars in China to set up a cold-rolled and coated steel plant to tap the communist nation's booming market, a report said today. LNM plans to set up a cold-rolled and coated steel plant in the city of Yingkou, northeast China's Liaoning province, in the next two years, according to a Memorandum of Understanding recently reached between LNM and the management committee of the Yingkou city economic and technological development zone. Go here to read more about this story.

Story 2: As part of its omnibus spending bill, Congress has approved a two-year extension of the Emergency Steel Loan Guarantee Program and sent it on to the White House.

The renewal is good news for bankrupt Weirton Steel Corp., which plans to claim a $145 million federally guaranteed loan package if it's able to emerge from Chapter 11 as a stand-alone company. Weirton won conditional approval in November for the loan, which is a key component of its reorganization plan. Fleet Capital Corp. has agreed to supply the money, $128 million of which would be insured against default by the federal government. The West Virginia Economic Development Authority also has agreed to lend Weirton $5.6 million to supplement that package. Read more here.

Story 3: Moscow Mechel Steel Group is intending to carry out the primary placement of its stocks on the US stock market by offering 30% stocks to the investors. To this effect, Mechel will increase its stock capital by placing 115,000,000 additional common stocks with 10 rbl par each. The placement will be made by close offer in favor of Deutsche Bank Trust Company Americas. The stocks will be transferred to the account of the nominal holder - Moscow Deutsche Bank for the purpose of ADR issue. The ADRs will be released by Deutsche Bank Trust Company Americas outside Russia. Read more here.

Story 4: Steel companies are passing on double-digit price increases to their customers, prompting protest from buyers, including General Motors Corp. (GM, news), about both the pace of the run-up and the addition of supplemental surcharges to existing contracts, Friday's Wall Street Journal reported.

While the increases are most intense in the U.S., prices are rising around the world. In China, steel prices rose 20% for some products in the past year, while prices for exported Japanese steel increased 13%. South Korea-based Posco (PKX, news) this week said it would raise domestic prices of hot and cold-rolled steel products 14% starting Feb. 9. Prices in Europe are flat compared with a year ago, but are expected to rise this year, according to independent New York-based analyst Charles Bradford. Read more here.

Why did I put these four stories together in the same article? Because thinking 'globally' is the ONLY way to get a clear picture about what is happening in most industries, but especially in global industries like steel. We need to do more of this as we devise future industry-based ED strategies, including our work with clusters.