Anglo-Dutch steelmaker Corus said on Wednesday negotiations were continuing over the sale of its primary aluminium smelters in Germany and the Netherlands.
We haven't changed our minds. We're still reviewing the strategic options in relation to those plants, Jean-Sebastian Jacques, Group Director, Strategy at Corus told Reuters on the sidelines of a steel conference. As soon as we have something more specific, we'll disclose it to the market, Jacques said.
He declined to give a time frame.
India's Tata Steel won a bidding battle in January 2007 to buy Corus. As Tata is focused on steel, industry analysts had expected the primary aluminium plants to be sold.
The smelters in Delfzijl in the Netherlands and Voerde in Germany have combined capacity to produce around 250,000 tonnes of primary aluminium annually.
Including secondary production from scrap, they have total output of more than 300,000 tonnes of aluminium a year.
Corus said in December it signed a non-binding letter of intent to sell the two smelters to U.S. company American Industrial Acquisition Corp for an undisclosed sum.
High German and Dutch power costs have long troubled Corus' European aluminium operations and many in the market think these costs have slowed the sale of the smelters.
Jacques declined to comment but said energy was an issue for the whole of Europe: The energy situation in Europe is a challenging one for the steel industry and it can be a challenging one for aluminium as well.
In October 2005, Corus reached a power supply deal for its Voerde aluminium plant in Germany, saving it from closure.
Energy is an important feature. It will have many, many impacts across the whole industry, he said.
China is another factor which could have a significant impact on the industry, Jacques said.
China is a big, big source of uncertainty, which could have impact of raw material and steel prices, he said.
An export tax on Chinese billet exports has brought shipments out of the country almost to a halt, causing a squeeze in the global supply, boosting prices.
The supply/demand situation is tight but we see Chinese imports picking up ... There's clearly a risk there, Jacques said, referring to an oversupply of Chinese material in Europe.
Everybody enjoys very high prices today, but I'd be cautious going forward, he said.
In order to shield from sky-high raw material costs Corus is considering to buy operating mines and invest in green-field projects to increase its self-sufficiency, Jacques said.
We'll look at all the options, he said.
(Reporting by Humeyra Pamuk and Michael Hogan; editing by Christopher Johnson)
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