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World Bank expects iron ore prices to halve

World Bank in its latest quarterly Commodity Markets Outlook said that iron ore prices are expected to see further big falls of up to 46% this year due to increases in output from Australia and Brazil.

The report said “Metals prices are projected to decline by 17% in 2015 due to increases in new production capacity and slowing demand growth in China.”

It said “The largest decline is for iron ore, expected to fall by 46% due to significant increases in new capacity from Australia and Brazil, followed by tin prices falling 30%.”

The bank says metals markets are adjusting by the closure of high-cost operations and reduced investment. It said “Risks to the metal price forecasts include slower demand in China and likely tightening environmental regulations to contain pollution.”

It added that steel output is down in China, where half the world’s steel is produced, and little growth is anticipated.

Source : Business Insider
Bijlage:
voda
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quote:

Bernardo schreef op 23 juli 2015 21:41:

Worden we ook niet vrolijker van
Nee, maar misschien wel realistisch?
Bernardo
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voda schreef op 23 juli 2015 22:14:

[...]
Nee, maar misschien wel realistisch?
sector geeft duidelijk het zelfde beeld als olie bijvoorbeeld. Echte stijging zit er niet in. Denk het misschien beter is sectoren te selecteren die de draai omhoog al gemaakt hebben. Deze sector ligt duidelijk nog op zijn gat
ttroo
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Opvallend. Hoe lager de iron price, hoe hoger de produktie. Het kan niet anders, dat er bij een aantal duurdere iron ore producers klappen gaan vallen. Het is nu veel meer de weg van de langste adem, waarbij een flink aantal producers nog beperkt zuurstof hebben.
[verwijderd]
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ttroo schreef op 24 juli 2015 11:35:

Opvallend. Hoe lager de iron price, hoe hoger de produktie. Het kan niet anders, dat er bij een aantal duurdere iron ore producers klappen gaan vallen. Het is nu veel meer de weg van de langste adem, waarbij een flink aantal producers nog beperkt zuurstof hebben.
Olie is goedkoop, men kan dus, lijkt mij, nu goedkoper produceren...afhankelijk van de opslagcapaciteit
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Miljardenverlies Anglo American, schrapt 53.000 banen - Update

(Update van 'Miljardenverlies Anglo American door dalende grondstofprijzen' om nieuwe informatie toe te voegen en alinea's te herschrijven)


AMSTERDAM (Dow Jones)--Anglo American plc (AAL.LN) heeft in de eerste helft van 2015 een miljardenverlies gemaakt, te wijten aan de alsmaar dalende grondstofprijzen waardoor de mijnbouwer een eenmalige afschrijving van $3,5 miljard moest doen op de waarde van het Braziliaanse ijzererts-project Minas-Rio. De mijnbouwer kondigde vrijdag verder aan 53.000 banen te zullen schrappen in de komende jaren.

Het verlies kwam uit op $3 miljard. In het eerste halfjaar van 2014 werd nog een winst behaald van $1,46 miljard.

In de periode daalden de ijzerertsprijzen met 41%, de prijzen voor platina met 19%, die van koper met 18% en die van cokeskool met 15%.

Diamanten, waarmee de winstgevendheid vorig jaar nog gespekt werd, hielpen Anglo American in 2015 niet. De omzet bij de divisie De Beers daalde met 21% tot $3 miljard ondanks een stijging van 7% van de prijzen. De Beers heeft de productie guidance dan ook verlaagd naar 29 miljoen karaat, van 31 miljoen.

"In de eerste zes maanden van 2015 zagen we aanzienlijke prijsdalingen voor onze producten te midden van een volatiel marktklimaat en de economische onzekerheid binnen bepaalde kernmarkten", zei chief executive Mark Cutifani vrijdag.

In een presentatie aan beleggers maakte hij bekend dat het bedrijf de komende jaren 53.000 banen zal schrappen, omgerekend zo'n 35% van het totale personeelsbestand van Anglo American. Dit is inclusief banen bij activiteiten die men al van plan was te verkopen. Er verdwijnen 6.000 administratieve banen, wat $500 miljoen aan kostenbesparingen op zou moeten leveren, aldus Cutifani.


Door Dow Jones Nieuwsdienst; +31 20 5715 200; amsterdam@wsj.com

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ArcelorMittal South Africa flags massive loss

Published on Fri, 24 Jul 2015 96 times viewed

Reuters reported that Africa's biggest steel maker ArcelorMittal South Africa flagged as much as 14-fold wider half-year loss on Thursday, citing tough trading conditions and higher finance costs.

ArcelorMittal said the headline loss was expected to come in at between 25 to 30 cents per share in the six months to the end of June compared with a loss of 2 cents a year earlier.

Steel makers across the world are suffering from weak prices due to a global oversupply of the metal. ArcelorMittal's rival, Evraz Highveld Steel and Vanadium , has applied for protection from creditors and plans to reduce its 2 200 jobs by about a half.

Source : Iol.co.za
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Frederic steel relocating to Woodlawn

cincinnati.com reported that Frederick Steel Co LLC plans to move from the Cincinnati neighborhood of Carthage to Woodlawn, where it will invest USD 8.2 million in a new 110,000-square-foot facility. Frederick Steel, which makes and sells rebar used in construction, is a subsidiary of Springfield, Ohio-based Benjamin Steel.

The company plans to locate to a 12-acre site at 630 Glendale-Milford Road. The owner of the property had been considering bringing a storage facility to the site instead, HCDC Inc. vice president Harry Blanton told The Enquirer. HCDC formerly was called the Hamilton County Development Co. Inc. and is the official economic development agency for the county.

“Compared to what was going to happen, it’s definitely a big plus,” Blanton said.

In addition to the 41 jobs Frederick Steel will relocate from its Carthage location, the company plans to create six new, full-time positions over a three-year period. With the new positions, the company will have an annual payroll of $2.1 million.

The Hamilton County Commissioners recently approved an enterprise zone agreement for Frederick Steel. Under the agreement, the company will receive a 75 percent tax abatement for a six-year period.

The new investment includes $6 million for the new construction, $2 million for new machinery and equipment, and $150,000 for furniture and fixtures, according to a letter from HCDC economic development specialist Dustin Montgomery to the commissioners.

Benjamin Steel was once the structural steel division of Carthage-based Byer Steel Group. Benjamin Steel acquired Frederick Steel in December 2013.

Source : cincinnati.com
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Severstal’s Karelsky Okatysh inks pact to supply magnesia pellets to SSAB

Karelsky Okatysh, Russia’s leading plant for iron ore mining and processing (part of PAO Severstal), signed a three-year contract to supply magnesia pellets to Swedish-Finnish group SSAB, starting from September 2015.

Finnish metallurgical conglomerate Rautaruukki (part of SSAB since 2014) has been collaborating with Karelsky Okatysh since the plant was first opened. To date, Karelsky Okatysh has only supplied non-fluxed pellets to its Finnish partner. However, new demand emerged for pellets with a specific magnesium content, following the shutdown of all of Rautaruukki’s sinter plants several years ago.

Work to develop pellets with a higher magnesium content has been ongoing for two years. Specialists from Karelsky Okatysh and Rautaruukki, and researchers from the University of Oulu, worked together to test the physical, chemical and metallurgical properties of the new product. Trial smelts tested for all of the specified requirements of Finnish metallurgists. These were successfully produced by experts from Kostomuksha ore smelting plant. The product, which has passed all laboratory and industrial testing, is now in production.

The supply of magnesium for magnesia pellet production is another example of a productive Russian-Finnish partnership. Magnesium is supplied from the Mondo Minerals concentrating plant, also located in Finland. Magnesium there is a by product of talc from magnesite ore.

Source : Strategic Research Institute
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Steel minister assures support to small and secondary steel producers

Orissa Diary reported that Ministry of Steel will soon meet all the small and secondary steel producers to understand and mitigate their concerns. This was stated by the Union Steel & Mines Minister Shri Narendra Singh Tomar in his inaugural address at Steel Mart-2015 in Chandigarh

Mr Tomar said, “Future of steel industry is bright as it has an important role to play in the Make in India campaign under the leadership of Shri Narendra Modi. I am happy that the steel sector contributes more than 2 % in GDP and it also creates 600000 jobs. Hence from the view of employment also this sector is significant”.

He said “It is matter of pleasure and pride that India has obtained third place in the world in production of Steel. We are moving in the direction of becoming the second largest producer by 2020. The contribution of private sector will be significant towards this end and govt is committed to extend all possible help for facilitating private sector. As for the PSUs, by March 2016, SAIL's capacity should become 23 million tonnes (MT) per annum, RINL's capacity has also increased to 6.3 million tonnes per annum, which shall be further enhanced in coming years. SAIL’s capacity would also be enhanced to 50 MT by 2025.”

Mr Tomar added “Besides, Govt of India is also working on enhancing the capacity through green field projects in 4 states. In this regard, MOUs have already been signed for the states of Chhattisgarh and Jharkhand. Under this plan, using Special Purpose Vehicle(SPV) route, a steel plant of 3 million tonne annual capacity would be created initially, which would later be enhanced to 6 MT in each of the four states. Thus a capacity of 24 MT would be added through this route.”

He said “Consumption of Steel in India is 59 kg per capita, whereas world average is 216 kg per capita. This is an opportunity and we need to focus on marketing and creating awareness about utility of Steel. This will not only ensure quality and safety for customers but also help the industry.”

Source : Orissa Diary
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Nucor reports results for second quarter and first half of 2015

Nucor Corporation announced onsolidated net earnings of $124.8 million, or $0.39 per diluted share, for the second quarter of 2015. By comparison, Nucor reported net earnings of $67.8 million, or $0.21 per diluted share, in the first quarter of 2015 and net earnings of $147.0 million, or $0.46 per diluted share, in the second quarter of 2014. Second quarter of 2015 diluted net earnings per share of $0.39 was above our guidance range of $0.20 to $0.25 per diluted share due to better than forecasted performance in the steel mills segment.

In the first half of 2015, Nucor reported consolidated net earnings of $192.6 million, or $0.60 per diluted share, compared with consolidated net earnings of $258.1 million, or $0.80 per diluted share, in the first half of last year.

Nucor's consolidated net sales decreased 1% to $4.36 billion in the second quarter of 2015 compared with $4.40 billion in the first quarter of 2015 and decreased 18% compared with $5.29 billion in the second quarter of 2014. Average sales price per ton decreased 8% from the first quarter of 2015 and decreased 13% from the second quarter of 2014. Total tons shipped to outside customers were 6,055,000 tons in the second quarter of 2015, a 7% increase over the first quarter of 2015 and a decrease of 5% from the second quarter of 2014. Total second quarter steel mill shipments increased 9% over the first quarter of 2015 and decreased 2% from the second quarter of 2014. Second quarter downstream steel products shipments to outside customers increased 12% over the first quarter of 2015 and decreased 3% from the second quarter of 2014.

In the first half of 2015, Nucor's consolidated net sales decreased 16% to $8.76 billion, compared with $10.40 billion in last year's first half. Total tons shipped to outside customers decreased 7% from the first half of 2014, while average sales price per ton decreased 10%.

The average scrap and scrap substitute cost per ton used in the second quarter of 2015 was $271, a 16% decrease from $324 in the first quarter of 2015 and a decrease of 29% from $384 in the second quarter of 2014. The average scrap and scrap substitute cost per ton used in the first half of 2015 was $297, a decrease of 24% from $391 in the first half of 2014.

Overall operating rates at our steel mills increased to 73% in the second quarter of 2015 as compared with 65% in the first quarter of 2015 and decreased from 79% in the second quarter of 2014. Steel mill utilization decreased to 69% in the first half of 2015 from 77% in the first half of 2014.

Total steel mill energy costs in the second quarter of 2015 decreased approximately $4 per ton compared with the first quarter of 2015 due to increased production volumes and lower unit costs for electricity and natural gas. Total steel mill energy costs in the second quarter of 2015 decreased approximately $4 per ton compared with the second quarter of 2014 due primarily to lower natural gas unit costs. Energy costs for the first half of 2015 decreased $1 per ton from the first half of 2014.

Source : Strategic Research Institute
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Reliance Steel & Aluminum Co reports second quarter results

Reliance Steel & Aluminum Co has reported its financial results for the second quarter ended June 30, 2015.

Second Quarter 2015 Financial Highlights

Sales were $2.42 billion, down 7.4% from $2.62 billion in the second quarter of 2014 and down 7.3% from $2.61 billion in the first quarter of 2015.

Tons sold were down 2.1% from the second quarter of 2014 and down 2.4% from the first quarter of 2015, with the average selling price per ton sold down 6.0% from the second quarter of 2014 and down 5.2% from the first quarter of 2015.

Net income attributable to Reliance was $90.2 million, down 6.5% from $96.5 million in the second quarter of 2014 and down 11.0% from $101.3 million in the first quarter of 2015.

Earnings per diluted share were $1.20, down 1.6% from $1.22 in the second quarter of 2014 and down 7.7% from $1.30 in the first quarter of 2015.

Non-GAAP earnings per diluted share were $1.21, down 6.9% from $1.30 in both the second quarter of 2014 and the first quarter of 2015.

A pre-tax LIFO credit, or income, of $32.5 million, is included in cost of sales compared to a pre-tax LIFO charge, or expense, of $5.0 million in the second quarter of 2014 and a credit of $7.5 million in the first quarter of 2015.

The effective tax rate was 32.6%, compared to 36.6% in the second quarter of 2014 and 31.7% in the first quarter of 2015.

Cash flow from operations was $292.5 million, up from $40.7 million in the second quarter of 2014, and net debt-to-total capital was 33.9% at June 30, 2015.

Reliance repurchased $200.0 million of its common stock, or 4.4% of December 31, 2014 shares outstanding, in the first half of 2015. The Company repurchased an additional $61.5 million of shares in July 2015, to-date.

A quarterly cash dividend of $0.40 per share was declared on July 21, 2015 for shareholders of record as of August 14, 2015 and will be payable on September 11, 2015.

Mr Gregg Mollins, President and Chief Executive Officer of Reliance said “I am extremely pleased with our operational performance in the second quarter of 2015, which is a testament to the quality of our management in the field as well as to our business model," "Despite ongoing industry headwinds that further pressured metals pricing in the 2015 second quarter, we were able to increase our FIFO gross profit margin to 25.7%, up from our strong 2015 first quarter level of 25.4%. We believe our long-standing practice of focusing on small, quick turnaround orders, our focus on inventory turnover and our increased investments which provide higher levels of value-added processing to our customers, has allowed us to experience this margin consistency in a difficult business environment. We believe that customer demand is relatively strong and will continue to slowly improve, even though our second quarter demand levels were somewhat lower than we had anticipated. Currently, we see ongoing strength and opportunities for growth in the aerospace end-market and through our toll processing operations related to the automotive market. Although still below peak demand levels, we also continue to be encouraged by momentum in our non-residential construction businesses."
Mr. Mollins continued, "Pricing for all commodity types remained weak primarily due to the historically high levels of imports in the marketplace, resulting in a 5.2% decline in our average selling price per ton sold compared to the prior quarter. Although price changes impact our earnings levels, we believe our disciplined focus on managing all controllable aspects of the business continues to mitigate the negative impact from the difficult market conditions we are currently experiencing. We reduced our FIFO inventory by $163.0 million during the second quarter of 2015, a key area of focus for Reliance. Using our tons on hand at June 30, 2015, our inventory turnover rate was 4.6 times based on first half 2015 shipment volumes, compared to 4.3 times in the prior quarter, approaching our goal of 4.75 turns. This contributed to significant cash flow generation that we were able to use for growth initiatives, shareholder returns and debt reduction."

Source : Strategic Research Institute
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CAD 60 million investment in Essar Steel Algoma announcement likely

SooToday reported that it has learned the provincial government will be announcing a major investment in Essar Steel Algoma Friday.

The province will provide a $30 million grant for a major modernization plan for the steel plant. The province's grant is the largest made by any level of government toward the Sault's largest employer since the Second World War.

According to the Sault Star, the federal government will provide $30 million to Essar Steel Algoma in the form of a repayable loan for the modernization plan.

Essar Steel Algoma will be investing $180 million toward the $240 million modernization plan, which will be carried out over the next several years.

It includes a restart of the No. 6 blast furnace, modernization of facilities, ramping up production and reduction of costs.

Sault MP Bryan Hayes will be accompanied at Friday's announcement at Essar Steel Algoma by Gary Goodyear, Minister of State for the federal economic agency for Southern Ontario, while Sault MPP David Orazietti will be accompanied by Michael Gravelle, Minister of Northern Development and Mines.

Source : SooToday
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China starts anti dumping probe on CRGO steel imports from Japan, Korea and Europe

Japan Times reported that China said on Thursday that it has opened an anti-dumping investigation into imports of a grade of electrical steel from Japan, South Korea and the European Union.

The Commerce Ministry said the probe is aimed at determining if the imports of grain-oriented flat-rolled electrical steel have damaged the Chinese steel industry.

The start of the Chinese investigation follows the European Union’s decision in May to impose provisional anti-dumping duties on imports of the steel from China, Japan, Russia, South Korea and the United States. The European Union’s provisional decision was made following a complaint lodged in June 2014 by the European Steel Association.Under the decision, Chinese companies, including Baoshan Iron & Steel Co. and Wuhan Iron & Steel Co., have been slapped with anti-dumping duties of 28.7 percent, while two Japanese firms, JFE Steel Corp. and Nippon Steel and Sumitomo Metal Corp., have faced duties of 34.2 percent and 35.9 percent, respectively.

Source : Japan Times
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New iron ore mine auction rule changes the game for Indian steel industry

Business Standard reported that the rules of the game changed after the new mineral auction policy, according to the Mines and Minerals (Development and Regulations) Amendment Act, 2015. Earleir, most the steel companies planned to set up plants thinking that the state governments will award them captive mines. Now, they will have to bid for the mines. MoU race for resocurces is over

More than 37 steel projects worth INR 300,000 crore are stalled at the moment, according to government data. The MoUs for the mineral rich states of Jharkhand, Odisha and Chhattisgarh started pouring in from 2005. Some of the biggest projects involve major players such as Tata Steel, Bhushan Steel, and JSW Steel. Foreign players like Posco and ArcelorMittal too signed in. But few projects have taken off since.

While land and lack of captive raw material linkages have been the major contributors to the stalling of these projects, the question looming large is whether it makes sense for the companies to revive these projects at this point in time.

Mr Kameswara Rao of PriceWaterhouseCoopers said "The stalled projects have specific reasons, but two general issues dominate. One is low demand visibility along with some over-capacity, not just in India but across much of the globe. As a result, companies are delaying progressing their investments.”

A steel producer said “To set up a plant having capacity of one million tonne, the cost is INR 7,000 crore. Add to it, the interest cost, and it goes up to Rs 11,000 crore. The earnings before interest, taxes, depreciation and amortisation on the other hand, would be just about half. At this rate, no one is willing to make fresh investment.”

According to the Reserve Bank of India, five out of the top 10 private steel producing companies are under severe stress on account of delayed implementation of their projects due to land acquisition and environmental clearances, among other factors. In its Financial Stability Report released on June 25, the RBI has detailed other factors as well: Inadequate capital investment, shortage of iron ore, low-paced mechanisation of mines, lower level of capacity utilisation of coal washeries, dependence on imported coking coal and volatility in the currency market.

Source : Business Standard
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Chinese steel traders hit hard as downturn persists into fourth year

Global Times reported that China's steel trading industry has been in decline since late 2011. The situation has continued to ­deteriorate in 2015 as market demand has weakened and steel prices have fallen to new lows. Consequently, a large number of steel trading firms have closed down in recent years, but many traders have clung to the ­industry, trying to survive the storm.

Times used to be good for China's steel traders. The country's economy was booming. New skyscrapers and real estate developments were going up across the country, not to mention all of the infrastructure projects. And it all needed steel. Standing between the foundries and the construction contractors was a great place to be.

Ye Minghai, deputy general manager of Shanghai Shuangsheng Steel Trade Co, said "From 2004 to 2010, China's steel industry was particularly prosperous. Almost every steel trader I know could make a lot of money in those years."

But ever since the economy began to slow in 2011, China's steel traders have been hit hard as the real estate market went into a slump, dragging down steel prices. And it's only gotten worse this year.

Unable to deal with the nearly continuous drop in steel prices, many trading companies have gone under. Since 2012, the number of steel traders in China has fallen by almost half. It's even worse in Shanghai, one of the largest centers in China in terms of annual steel trading volume, where nearly 70 percent of steel traders have left the industry

In 2012, however, as the economy slowed and steel demand shrank, many domestic steel traders started cutting prices. That led to a vicious cycle in the steel market, causing prices to collapse. The price of hot rolled steel bars, a type of commonly used steel, fell from about 3,721 yuan per ton in December 2008 to around 1,900 yuan per ton in July 2015.

Usually, a steel trader serves as an intermediary between steel producers and customers, such as home builders. The traders pay steel producers for their products and then sell those products on to their customers sometime later. This works just fine as long as the traders have access to credit and their customers pay them in a timely manner. Traders need to borrow money from banks to pay the steel factories. When the industry was prosperous and the customers could repay in due time and the banks were eager to lend money. However, when the market went bad, customers owed money to traders which in turn made it hard for the, to repay the banks. Banks have since lost confidence in steel traders, Wu noted. They are no longer willing to lend to steel traders

Source : Global Times
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Almost 50 indicted in Ilva pollution disaster case

ANSA reported that almost 50 people were indicted Thursday in a case of alleged environmental disaster at the troubled Ilva steel works in Taranto. Among the 44 people sent to trial along with three companies was former Puglia governor Nichi Vendola, accused of leaning on a regional environment agency head for softer reports on the toxicity of emissions from Europe's biggest steel works.

Members of the Riva family that formerly owned the Ilva steelworks are also among those set to stand trial, along with politicians and current and former administrative officials. Former CEO Fabio Riva, the only defendant imprisoned in the case after his arrest in June, will stand trial along with his brother Nicola.

The politicians involved, aside from Vendola, include former councillor for youth policies, Nicola Fratoianni, and a regional councillor for Premier Matteo Renzi's Democratic Party, Donato Pentassuglia, who are both accused of facilitating crimes.

The ex-president of the province of Taranto Giovanni Florido and the former environmental councillor of the province Michele Conserva are also implicated.

Other names among the accused are of former Ilva managers and plant directors, as well as former town prefects, a lawyer for Ilva and ministerial workers who were involved in releasing environmental permits for the plant.

Meanwhile Ilva special commissioner Piero Gnudi told a Lower House hearing Thursday that environmental cleanup at the troubled steel works and restoring it to health and productivity is a reachable objective. Mr Gnudi also said one of the steelmaker's furnaces may have to shut down after a worker was killed there by a blast of molten metal last month. He said "We are trying to avert the closure but the problem exists.”

Italy in March passed a so-called save-Ilva decree allowing the cash-strapped steel manufacturer to get 400 million euros in State-backed loans from the national government's Cassa Depositi e Prestiti (CDP). The cabinet also approved a 260-million euro bridge loan. Extraordinary commissioners are now managing Ilva as the troubled plant goes through a massive environmental cleanup and financial turnaround project.

The Ilva decree says that 80% of the requirements must be met by August 2015, with the remaining 20% to be fulfilled by August 2016.

Source - ANSA
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