Saturday, April 30, 2005
Auto firms face steel costs hit
Canoe.ca
GENEVA -- Rising steel prices are causing major automakers to brace for an increase in the cost of building vehicles, a development that likely will force them to trim expenses even further. Automakers largely avoided drastic cost increases during recent steel-price hikes because of long-term contracts with producers and the large quantities they buy around the world.
But top executives for two of the world's largest automakers say even extended contracts and other factors may not protect them from current rising prices. Steel prices have risen roughly 30 per cent in the past few months, thanks to a weak U.S. dollar and intense demand from China.
'We have contracts in place, but steel costs are a problem,' John Devine, General Motors Corp.'s chief financial officer, said yesterday in an interview at the Geneva International Motor Show.
He noted prices of other materials used in car production, such as aluminum, are up, too.
However, Devine said he didn't anticipate higher material costs to result in more expensive vehicles for consumers.
'The cost structure and revenue structure are two different things,' he said. 'We have to find a way of offsetting it, and that's what we're going to do.'
What makes the timing so bad for automakers like GM, Ford Motor Co. and DaimlerChrysler AG's Chrysler Group is they've already slashed expenses by billions in recent years in the wake of increasing competition and tight profit margins, if not losses.
The situation is tough for auto suppliers too, who are under pressure from automakers to lower their costs.
U.S. President George W. Bush revoked protective tariffs on steel in December, but so far that has not helped prices to stabilize.
GENEVA -- Rising steel prices are causing major automakers to brace for an increase in the cost of building vehicles, a development that likely will force them to trim expenses even further. Automakers largely avoided drastic cost increases during recent steel-price hikes because of long-term contracts with producers and the large quantities they buy around the world.
But top executives for two of the world's largest automakers say even extended contracts and other factors may not protect them from current rising prices. Steel prices have risen roughly 30 per cent in the past few months, thanks to a weak U.S. dollar and intense demand from China.
'We have contracts in place, but steel costs are a problem,' John Devine, General Motors Corp.'s chief financial officer, said yesterday in an interview at the Geneva International Motor Show.
He noted prices of other materials used in car production, such as aluminum, are up, too.
However, Devine said he didn't anticipate higher material costs to result in more expensive vehicles for consumers.
'The cost structure and revenue structure are two different things,' he said. 'We have to find a way of offsetting it, and that's what we're going to do.'
What makes the timing so bad for automakers like GM, Ford Motor Co. and DaimlerChrysler AG's Chrysler Group is they've already slashed expenses by billions in recent years in the wake of increasing competition and tight profit margins, if not losses.
The situation is tough for auto suppliers too, who are under pressure from automakers to lower their costs.
U.S. President George W. Bush revoked protective tariffs on steel in December, but so far that has not helped prices to stabilize.
U.S. steel imports fell in March
The flow of foreign steel into the United States slowed in March as the market inched closer to balancing supply and demand, according to the U.S. Commerce Department.
"The good news for the steel market in 2005 is that the long period of inventory adjustment appears to be coming to and end, as some analysts report that shipments and imports have been below actual consumption for some time," David Phelps, president of the American Institute for International Steel, Inc. said.
In March, the United States imported 2.52 million tons of steel, down 6.3% from 2.69 million tons in February and down 3.7% from March 2004.
"Current import market conditions suggest that imports will continue to moderate in coming months as a result of international prices flattening, reducing opportunities for trade especially in commodity grade products," Phelps said.
Canada, at 487,000 tons, led the list of countries sending steel last month into the U.S. market, followed by Mexico at 386,000 tons. Russia showed the biggest increase in shipments, up 112% from a month ago at 268,000 tons.
"The good news for the steel market in 2005 is that the long period of inventory adjustment appears to be coming to and end, as some analysts report that shipments and imports have been below actual consumption for some time," David Phelps, president of the American Institute for International Steel, Inc. said.
In March, the United States imported 2.52 million tons of steel, down 6.3% from 2.69 million tons in February and down 3.7% from March 2004.
"Current import market conditions suggest that imports will continue to moderate in coming months as a result of international prices flattening, reducing opportunities for trade especially in commodity grade products," Phelps said.
Canada, at 487,000 tons, led the list of countries sending steel last month into the U.S. market, followed by Mexico at 386,000 tons. Russia showed the biggest increase in shipments, up 112% from a month ago at 268,000 tons.
Thursday, April 28, 2005
Chinese Investment in steel sector drops sharply
People's Daily Online
Fixed asset investment in China's steel sector, the biggest in the world, tumbled in the first quarter of this year as a result of the State's macro economic controls, an industry organization said yesterday.
The steel sector's fixed asset investment [was] down 1.4 per cent from the same period of last year, according to statistics from the China Iron and Steel Association.
This is in sharp contrast to the staggering growth of 106.4 per cent in fixed asset investment in the steel sector in the first quarter of last year.
The steel sector was the only one of China's main industrial sectors to experience a fixed asset investment decline from January to March this year, said officials from the steel association.
Fixed asset investment in China's steel sector, the biggest in the world, tumbled in the first quarter of this year as a result of the State's macro economic controls, an industry organization said yesterday.
The steel sector's fixed asset investment [was] down 1.4 per cent from the same period of last year, according to statistics from the China Iron and Steel Association.
This is in sharp contrast to the staggering growth of 106.4 per cent in fixed asset investment in the steel sector in the first quarter of last year.
The steel sector was the only one of China's main industrial sectors to experience a fixed asset investment decline from January to March this year, said officials from the steel association.
Sunday, April 24, 2005
Chinese Steel mills urged to regroup, prices to drop
China View (www.chinaview.cn) English Edition
BEIJING, April 24 (Xinhuanet) -- Steel mills in China will face a hard time soon and the prices will see a sagging tendency as the government has decided to slow down the growth of the industry to ensure a sustained and coordinated development of the national economy.
An executive meeting of the State Council, chaired by Premier Wen Jiabao on April 20, approved a new development policy for the industry, which called on the steel mills to adjust product structure, reduce energy and resource consumption and enhance the competitiveness of their products by using new and high technologies.
The steel mills are also urged to regroup and adopt measures to prevent [...] overexpansion of their production capacity.
Statistics showed there are currently more than 800 iron and steel firms in China. The Shanghai-based Baosteel is the largest one. Last year, it produced 12 million tons of steel. Other major steel producers include Beijing-based Shougang Iron and Steel, theWuhan Iron and Steel in central China's Hubei Province, the Maanshan Iron and Steel in Northeast China's Liaoning Province, the Tangshan Iron and Steel in North China's Hebei Province.
Industry insiders predict that the new state policy is expectedto help lower the prices of steel, further cutting the profits of the steel enterprises.
The industry is estimated to lose 3 billion yuan (362.76 million US dollars) in profits this year after the State Administration of Taxation abolished the export tax rebate policy for billet on April 1.
The losses may rise further to 4.7 billion yuan (568.3 million dollars) if the administration decides to lower the export drawback policy for steel from 13 percent to 11 percent starting May 1.
Steel prices in the Chinese market dropped dramatically recently following a price hike in the first three months of this year as the domestic demand for steel declined after the government adopted the macro-control policy to ensure a "soft landing" of the nation's overheating economy.
BEIJING, April 24 (Xinhuanet) -- Steel mills in China will face a hard time soon and the prices will see a sagging tendency as the government has decided to slow down the growth of the industry to ensure a sustained and coordinated development of the national economy.
An executive meeting of the State Council, chaired by Premier Wen Jiabao on April 20, approved a new development policy for the industry, which called on the steel mills to adjust product structure, reduce energy and resource consumption and enhance the competitiveness of their products by using new and high technologies.
The steel mills are also urged to regroup and adopt measures to prevent [...] overexpansion of their production capacity.
Statistics showed there are currently more than 800 iron and steel firms in China. The Shanghai-based Baosteel is the largest one. Last year, it produced 12 million tons of steel. Other major steel producers include Beijing-based Shougang Iron and Steel, theWuhan Iron and Steel in central China's Hubei Province, the Maanshan Iron and Steel in Northeast China's Liaoning Province, the Tangshan Iron and Steel in North China's Hebei Province.
Industry insiders predict that the new state policy is expectedto help lower the prices of steel, further cutting the profits of the steel enterprises.
The industry is estimated to lose 3 billion yuan (362.76 million US dollars) in profits this year after the State Administration of Taxation abolished the export tax rebate policy for billet on April 1.
The losses may rise further to 4.7 billion yuan (568.3 million dollars) if the administration decides to lower the export drawback policy for steel from 13 percent to 11 percent starting May 1.
Steel prices in the Chinese market dropped dramatically recently following a price hike in the first three months of this year as the domestic demand for steel declined after the government adopted the macro-control policy to ensure a "soft landing" of the nation's overheating economy.
Nucor profits triple in quarter
Northwest Indiana Times
Nucor Corp., the second-largest U.S. steel producer, said profit more than tripled in the first quarter as prices rose. Steel producer Allegheny Technologies Inc. had its most profitable quarter in six years, and Reliance Steel & Aluminum Co. said earnings jumped 55 percent.
Nucor Corp., the second-largest U.S. steel producer, said profit more than tripled in the first quarter as prices rose. Steel producer Allegheny Technologies Inc. had its most profitable quarter in six years, and Reliance Steel & Aluminum Co. said earnings jumped 55 percent.
Saturday, April 23, 2005
Alcoa defends cost-cutting as sign of the times
Pittsburgh Post-Gazette
[emphasis mine ... Michael]
Alcoa shareholders received a lesson in global competition yesterday as union members clashed with Chairman and Chief Executive Officer Alain Belda at the aluminum maker's annual meeting at the Westin Convention Center, Downtown.
United Steelworkers union members at Alcoa's Cressona plant in Schuylkill County complained about concessions on health care and other issues the company has sought during 15 months of contract talks.
One worker charged that despite Alcoa's vaunted cost-cutting regimen, Belda made enough last year to provide basic health-care benefits for 4,600 workers or pension benefits for 8,000. 'It doesn't seem to be like we are reducing and controlling costs,' the worker said.
Belda, who was paid $6.3 million last year, emphasized that Alcoa must be competitive globally. All over the world, people are willing to work 'with less rules, less problems, less costs ... and that's what we're dealing with,' particularly at U.S. plants, he said.
'Everyday you wake up, there's somebody out there saying 'I want your job.' That's true for me. That's true for you,' Belda said.
Alcoa, which employs about 131,000 in 43 countries, announced plans last month to eliminate 2,000 jobs over the next 12 months.
Belda warned several times that failure to address cost issues could put Alcoa in the same position as General Motors. The carmaker, which pays more than $5 billion annually for health-care costs, this week reported a first-quarter loss of $1.1 billion.
[emphasis mine ... Michael]
Alcoa shareholders received a lesson in global competition yesterday as union members clashed with Chairman and Chief Executive Officer Alain Belda at the aluminum maker's annual meeting at the Westin Convention Center, Downtown.
United Steelworkers union members at Alcoa's Cressona plant in Schuylkill County complained about concessions on health care and other issues the company has sought during 15 months of contract talks.
One worker charged that despite Alcoa's vaunted cost-cutting regimen, Belda made enough last year to provide basic health-care benefits for 4,600 workers or pension benefits for 8,000. 'It doesn't seem to be like we are reducing and controlling costs,' the worker said.
Belda, who was paid $6.3 million last year, emphasized that Alcoa must be competitive globally. All over the world, people are willing to work 'with less rules, less problems, less costs ... and that's what we're dealing with,' particularly at U.S. plants, he said.
'Everyday you wake up, there's somebody out there saying 'I want your job.' That's true for me. That's true for you,' Belda said.
Alcoa, which employs about 131,000 in 43 countries, announced plans last month to eliminate 2,000 jobs over the next 12 months.
Belda warned several times that failure to address cost issues could put Alcoa in the same position as General Motors. The carmaker, which pays more than $5 billion annually for health-care costs, this week reported a first-quarter loss of $1.1 billion.
ThyssenKrupp to Cut Steel Production by 10% to Maintain Prices
Bloomberg.com
ThyssenKrupp AG, Europe's fourth- largest steelmaker, plans to cut steel production by 10 percent to maintain prices at current levels, as imports and inventories of the metal increased since the beginning of the year.
Higher customers inventories and imports, mainly to southern Europe, put pressure on prices, the Duisburg, Germany-based steel company said in a faxed statement.
The stock fell 1.4 percent [on the Frankfurt exchange after the news came out].
ThyssenKrupp posted a record profit in the 2004 fiscal year, when it raised steel prices four times.
ThyssenKrupp AG, Europe's fourth- largest steelmaker, plans to cut steel production by 10 percent to maintain prices at current levels, as imports and inventories of the metal increased since the beginning of the year.
Higher customers inventories and imports, mainly to southern Europe, put pressure on prices, the Duisburg, Germany-based steel company said in a faxed statement.
The stock fell 1.4 percent [on the Frankfurt exchange after the news came out].
ThyssenKrupp posted a record profit in the 2004 fiscal year, when it raised steel prices four times.
Friday, April 22, 2005
Copper Falls on Speculation China's Consumption Growth May Slow
Bloomberg
Copper prices in New York fell for the first time in a week on speculation China's government will step up efforts to slow the economy, curbing demand for metals from the world's biggest consumer.
China's Premier Wen Jiabao has been trying to damp demand for commodities to avoid overheating the economy. Efforts so far have failed to slow growth, as industrial production surged 16 percent in the first quarter. Rising demand from China helped send copper prices to a 16-year high on April 12.
Copper prices in New York fell for the first time in a week on speculation China's government will step up efforts to slow the economy, curbing demand for metals from the world's biggest consumer.
China's Premier Wen Jiabao has been trying to damp demand for commodities to avoid overheating the economy. Efforts so far have failed to slow growth, as industrial production surged 16 percent in the first quarter. Rising demand from China helped send copper prices to a 16-year high on April 12.
Labels: Copper
Steel is 'strong, lean and green', But prof warns of higher energy prices, soaring debt
Northwest Indiana News
The crisis-induced consolidation of the steel industry in recent years has helped to make the steel industry 'strong, lean and green,' though it is still threatened, said professor Timothy Considine, who delivered the results of his industry research Thursday.
Consolidation and restructuring as a result of falling prices from 1997 to 2003 left the steel industry with fewer, but stronger firms, Considine said in a briefing hosted by the Congressional Steel Caucus and the American Iron and Steel Institute.
His report noted that the steel industry cut energy consumption 17 percent from 1990 to 2002. It also improved labor productivity by 5.7 percent per year on average since 1990, outstripping the manufacturing industry average of 3.9 percent.
This productivity reduced the labor hours per ton of steel from about five hours in 1990 to less than three in 2003.
But Considine, a professor of natural resource economics at Penn State University, warned that higher energy prices, soaring national debt and East Asian overproduction could throw the steel industry back into decline.
The steel industry was boosted back into recovery and record profits last year as China's demand for steel became voracious. International steel producers have struggled to supply enough steel to meet China's demand, but their efforts may lead to overproduction if China loses its appetite for steel, he said.
A decline in Chinese demand may lead to a repeat of the dumping of steel in the U.S. market that occurred from 1997 through 2002, he said.
'If [international steel producers] are not selling it in China, they will look overseas to sell it,' he said.
The crisis-induced consolidation of the steel industry in recent years has helped to make the steel industry 'strong, lean and green,' though it is still threatened, said professor Timothy Considine, who delivered the results of his industry research Thursday.
Consolidation and restructuring as a result of falling prices from 1997 to 2003 left the steel industry with fewer, but stronger firms, Considine said in a briefing hosted by the Congressional Steel Caucus and the American Iron and Steel Institute.
His report noted that the steel industry cut energy consumption 17 percent from 1990 to 2002. It also improved labor productivity by 5.7 percent per year on average since 1990, outstripping the manufacturing industry average of 3.9 percent.
This productivity reduced the labor hours per ton of steel from about five hours in 1990 to less than three in 2003.
But Considine, a professor of natural resource economics at Penn State University, warned that higher energy prices, soaring national debt and East Asian overproduction could throw the steel industry back into decline.
The steel industry was boosted back into recovery and record profits last year as China's demand for steel became voracious. International steel producers have struggled to supply enough steel to meet China's demand, but their efforts may lead to overproduction if China loses its appetite for steel, he said.
A decline in Chinese demand may lead to a repeat of the dumping of steel in the U.S. market that occurred from 1997 through 2002, he said.
'If [international steel producers] are not selling it in China, they will look overseas to sell it,' he said.
Mittal rejects 'unreasonable demands' of Polish steel unions at the Czestochowa steel mill
Yahoo! News
Mittal Steel Company has rejected demands made by Polish unions at the Czestochowa steel mill, which the global steel giant said were the sole obstacle to its acquisition of the steel works in southern Poland.
"After six weeks of negotiations, the trade unions are still insisting upon a privatisation bonus of 7500 zlotys (1,800 euros, 2,500 dollars), minimum 15 years of employment guarantee and 500 zlotys increase of the average salary in the company," Mittal said in a statement on Thursday.
"The demands of the unions have been to a large extent unreasonable, particularly in light of the fact that without privatisation the company is facing the threat of bankruptcy," the statement said.
Meeting the demands of the unions would cost Mittal "in excess of 100 million euros", according to the statement.
"These kinds of demands... do not make good economic sense and would further deteriorate the financial situation of Huta Czestochowa," said the steel giant, while offering the Polish unions salary increases of 150 zlotys, a privatisation bonus of 2,500 zlotys, and job guarantees until December 2010. Employees over the age of 55 have been given a 10-year job guarantee.
Mittal Steel Company has rejected demands made by Polish unions at the Czestochowa steel mill, which the global steel giant said were the sole obstacle to its acquisition of the steel works in southern Poland.
"After six weeks of negotiations, the trade unions are still insisting upon a privatisation bonus of 7500 zlotys (1,800 euros, 2,500 dollars), minimum 15 years of employment guarantee and 500 zlotys increase of the average salary in the company," Mittal said in a statement on Thursday.
"The demands of the unions have been to a large extent unreasonable, particularly in light of the fact that without privatisation the company is facing the threat of bankruptcy," the statement said.
Meeting the demands of the unions would cost Mittal "in excess of 100 million euros", according to the statement.
"These kinds of demands... do not make good economic sense and would further deteriorate the financial situation of Huta Czestochowa," said the steel giant, while offering the Polish unions salary increases of 150 zlotys, a privatisation bonus of 2,500 zlotys, and job guarantees until December 2010. Employees over the age of 55 have been given a 10-year job guarantee.
Tuesday, April 19, 2005
World crude steel production in March 2005 up 6.5% than March 2004
worldsteel.org
Brussels, 18 April 2005 World crude steel production for the 61 countries reporting to the International Iron and Steel Institute was 92.9 million metric tonnes (mmt) in March. This is 6.5% higher than for March 2004.
China produced 27.5 mmt of crude steel in March, up 24.1% on the same month in 2004. Total production for the Asian region was 46.0 mmt, a rise of 15.2% on March 2004. Asian crude steel production is 131.1 mmt for the first quarter of 2005, a rise of 13.8% compared to 2004.
Brussels, 18 April 2005 World crude steel production for the 61 countries reporting to the International Iron and Steel Institute was 92.9 million metric tonnes (mmt) in March. This is 6.5% higher than for March 2004.
China produced 27.5 mmt of crude steel in March, up 24.1% on the same month in 2004. Total production for the Asian region was 46.0 mmt, a rise of 15.2% on March 2004. Asian crude steel production is 131.1 mmt for the first quarter of 2005, a rise of 13.8% compared to 2004.
China to reduce tax rebate for steel exports to 11 pct - report
AFP via Yahoo! UK & Ireland Finance
BEIJING (AFX) - China's State Council has approved a proposal to reduce the tax rebate for exports of steel products to 11 pct from 13 pct, the China Business News reported.
The tax rebate reduction will take effect on May 1, the report said, citing an unidentified official from the Ministry of Finance.
Analysts said lowering the rebate will slow Chinese exports of steel products and ease domestic steel shortages.
The move follows the cancellation of a 13 pct tax rebate for billet steel exports which took effect on April 1, the report added.
In an attempt to deal with its shortage of metal resources, China started abolishing or reducing tax rebates for exports of copper, aluminium and nickel in the fourth quarter last year.
China also abolished an eight pct tax rebate for electrolytic aluminum and alloy iron on Jan 1 this year.
BEIJING (AFX) - China's State Council has approved a proposal to reduce the tax rebate for exports of steel products to 11 pct from 13 pct, the China Business News reported.
The tax rebate reduction will take effect on May 1, the report said, citing an unidentified official from the Ministry of Finance.
Analysts said lowering the rebate will slow Chinese exports of steel products and ease domestic steel shortages.
The move follows the cancellation of a 13 pct tax rebate for billet steel exports which took effect on April 1, the report added.
In an attempt to deal with its shortage of metal resources, China started abolishing or reducing tax rebates for exports of copper, aluminium and nickel in the fourth quarter last year.
China also abolished an eight pct tax rebate for electrolytic aluminum and alloy iron on Jan 1 this year.
Monday, April 18, 2005
Aluminum Use in U.S., Canada Rose 6.7% in Jan.-Feb., Group Says
Bloomberg.com: Canada
April 18 (Bloomberg) -- Aluminum use rose 6.7 percent in the U.S. and Canada in the first two months of this year compared with the same period last year, The Aluminum Association said.
The two nations consumed 4.27 billion pounds of the metal, used in produces from beverage cans to aircraft, the Washington- based industry group estimated in a report e-mailed on April 15. The association based its estimate on import and production data.
April 18 (Bloomberg) -- Aluminum use rose 6.7 percent in the U.S. and Canada in the first two months of this year compared with the same period last year, The Aluminum Association said.
The two nations consumed 4.27 billion pounds of the metal, used in produces from beverage cans to aircraft, the Washington- based industry group estimated in a report e-mailed on April 15. The association based its estimate on import and production data.
Demand for Continued Power Supply to Bangladeshi Steel, Re-rolling Mills Rejected
www.bangladesh-web.com
State Minister for Power Iqbal Hassan Mahmood has again rejected the demand for uninterrupted power supply to the country?s steel and re-rolling mills, reports UNB.
He said it is quite impossible to ensure uninterrupted power supply to any industry in the existing situation when the country is facing huge shortage of electricity.
State Minister for Power Iqbal Hassan Mahmood has again rejected the demand for uninterrupted power supply to the country?s steel and re-rolling mills, reports UNB.
He said it is quite impossible to ensure uninterrupted power supply to any industry in the existing situation when the country is facing huge shortage of electricity.
ITC DETERMINES TO RETAIN ANTIDUMPING AND COUNTERVAILING DUTY MEASURES ON CERTAIN HOT-ROLLED FLAT-ROLLED CARBON-QUALITY STEEL PRODUCTS FROM BRAZIL, JAP
Wow, that was such a long title it probably will get cut off. Let me repeat it here.
ITC DETERMINES TO RETAIN ANTIDUMPING AND COUNTERVAILING DUTY MEASURES ON CERTAIN HOT-ROLLED FLAT-ROLLED CARBON-QUALITY STEEL PRODUCTS FROM BRAZIL, JAPAN, AND RUSSIA
NEWS RELEASE 05-039; April 14, 2005
The U.S. International Trade Commission (ITC) today determined that revoking the existing countervailing duty and antidumping duty orders on certain hot-rolled flat-rolled carbon-quality steel products from Brazil and Japan or terminating the suspended antidumping investigation on certain hot-rolled flat-rolled carbon-quality steel products from Russia would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.
As a result of the Commission's affirmative determinations and the Department of Commerce's recent affirmative findings, the existing orders on imports of these products will remain in place.
ITC DETERMINES TO RETAIN ANTIDUMPING AND COUNTERVAILING DUTY MEASURES ON CERTAIN HOT-ROLLED FLAT-ROLLED CARBON-QUALITY STEEL PRODUCTS FROM BRAZIL, JAPAN, AND RUSSIA
NEWS RELEASE 05-039; April 14, 2005
The U.S. International Trade Commission (ITC) today determined that revoking the existing countervailing duty and antidumping duty orders on certain hot-rolled flat-rolled carbon-quality steel products from Brazil and Japan or terminating the suspended antidumping investigation on certain hot-rolled flat-rolled carbon-quality steel products from Russia would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.
As a result of the Commission's affirmative determinations and the Department of Commerce's recent affirmative findings, the existing orders on imports of these products will remain in place.
Byrd lauds keeping steel-import duties
Byrd again!
See our Big Byrd article a few weeks back.
The Charleston Gazette - News
Sen. Robert C. Byrd, D-W.Va., last week praised the U.S. International Trade Commission for its decision to continue imposing import duties on nations that subsidize their steel exports or dump steel on U.S. markets at prices below costs of production.
Last month, Byrd testified before the ITC, asking commissioners to retain duties on certain foreign imports of hot-rolled steel products.
The ITC voted 4-2 on Thursday to retain duties on steel imported from Brazil, Japan, Russia and several other countries for the next five years.
Cheap foreign steel contributed to the bankruptcies of more than 40 steel companies in the past 10 years and led to the layoffs of tens of thousands of steelworkers, including workers in the Northern Panhandle.
But Lewis Leibowitz, a lawyer for steel-consuming industries organized as the Consuming Industries Trade Action Coalition (CITAC), criticized the commission.
“Steel consumers in the United States need access to stable, adequate supplies of globally priced steel,� Leibowitz said. “The ITC decision ensures that they will continue to suffer from high prices, long lead times and quality problems.�
CITAC’s Steel Task Force believes the ITC should consider the impact of import duties on consumers and the economy as a whole.
Byrd stressed that continued import duties are a key to preserving our domestic steel industry.
“Steel is essential to our economic well-being, and that is particularly true in West Virginia,� he said. “Our steelworkers are from Weirton and Wheeling, from Follansbee and Beech Bottom, from Huntington, from Parkersburg, and from elsewhere in the state.
“They deserve to have a fair opportunity to compete. To do that, it is up to the federal government to ensure that our trade laws are enforced. We cannot allow our trade laws to be broken by foreign trading partners who refuse to play by the rules.�
See our Big Byrd article a few weeks back.
The Charleston Gazette - News
Sen. Robert C. Byrd, D-W.Va., last week praised the U.S. International Trade Commission for its decision to continue imposing import duties on nations that subsidize their steel exports or dump steel on U.S. markets at prices below costs of production.
Last month, Byrd testified before the ITC, asking commissioners to retain duties on certain foreign imports of hot-rolled steel products.
The ITC voted 4-2 on Thursday to retain duties on steel imported from Brazil, Japan, Russia and several other countries for the next five years.
Cheap foreign steel contributed to the bankruptcies of more than 40 steel companies in the past 10 years and led to the layoffs of tens of thousands of steelworkers, including workers in the Northern Panhandle.
But Lewis Leibowitz, a lawyer for steel-consuming industries organized as the Consuming Industries Trade Action Coalition (CITAC), criticized the commission.
“Steel consumers in the United States need access to stable, adequate supplies of globally priced steel,� Leibowitz said. “The ITC decision ensures that they will continue to suffer from high prices, long lead times and quality problems.�
CITAC’s Steel Task Force believes the ITC should consider the impact of import duties on consumers and the economy as a whole.
Byrd stressed that continued import duties are a key to preserving our domestic steel industry.
“Steel is essential to our economic well-being, and that is particularly true in West Virginia,� he said. “Our steelworkers are from Weirton and Wheeling, from Follansbee and Beech Bottom, from Huntington, from Parkersburg, and from elsewhere in the state.
“They deserve to have a fair opportunity to compete. To do that, it is up to the federal government to ensure that our trade laws are enforced. We cannot allow our trade laws to be broken by foreign trading partners who refuse to play by the rules.�
Cray XD1 Supercomputer Delivers Unmatched Performance When Running LSTC's LS-DYNA Simulation Software
This is mostly an advertising news release, but it was interesting (at least to me) for one of the listed applications - simulating metal stamping. I assume they mean simulating metal deformation in a stamping application, because straight stamping holes in steel wouldn't need this kind of computer power.
Most people here won't know it, but in a previous career I was a systems programmer, and one of the computer systems I supported was a front-end processor for a Cray. In those days, Crays didn't do their own input/output to "slow" devices like line printers, card readers and networks, so a smaller, "cheaper" computer like mine did all the legwork. At that time, Crays were multi-million dollar machines that only universities, research institutes and spy agencies could afford. This one, it seems, goes for "only" $100,000. My how things have changed!
Yahoo! Finance - Press Release
SEATTLE, WA and LIVERMORE, CA--(MARKET WIRE)--Apr 18, 2005 -- Global supercomputer leader Cray Inc. and Livermore Software Technology Corp. today announced that the Cray XD1(TM) Opteron(TM)/Linux-based supercomputer has significantly outperformed all other systems running LSTC's popular LS-DYNA computer-aided engineering (CAE) code, according to benchmark results reported by Cray, Hewlett-Packard, IBM and other high-performance computing (HPC) vendors. In addition, LSTC announced that it has certified LS-DYNA for operation on the Cray XD1 system.
In several tests designed to measure how well systems perform when using LS-DYNA to solve industrial problems, the Cray XD1 supercomputer delivered superior turnaround times -- a key requirement for CAE users committed to shortening their product design cycles -- compared to results reported for alternative systems.
Dr. John Hallquist, president, LSTC, said "The Cray XD1 supercomputer makes our code even more valuable to the engineers who use it to simulate collisions, structural deformations and failures, metal stamping, armor penetration and other complex, real-world materials problems. Now those engineers have a solution that provides optimal performance, functionality and scalability."
Most people here won't know it, but in a previous career I was a systems programmer, and one of the computer systems I supported was a front-end processor for a Cray. In those days, Crays didn't do their own input/output to "slow" devices like line printers, card readers and networks, so a smaller, "cheaper" computer like mine did all the legwork. At that time, Crays were multi-million dollar machines that only universities, research institutes and spy agencies could afford. This one, it seems, goes for "only" $100,000. My how things have changed!
Yahoo! Finance - Press Release
SEATTLE, WA and LIVERMORE, CA--(MARKET WIRE)--Apr 18, 2005 -- Global supercomputer leader Cray Inc. and Livermore Software Technology Corp. today announced that the Cray XD1(TM) Opteron(TM)/Linux-based supercomputer has significantly outperformed all other systems running LSTC's popular LS-DYNA computer-aided engineering (CAE) code, according to benchmark results reported by Cray, Hewlett-Packard, IBM and other high-performance computing (HPC) vendors. In addition, LSTC announced that it has certified LS-DYNA for operation on the Cray XD1 system.
In several tests designed to measure how well systems perform when using LS-DYNA to solve industrial problems, the Cray XD1 supercomputer delivered superior turnaround times -- a key requirement for CAE users committed to shortening their product design cycles -- compared to results reported for alternative systems.
Dr. John Hallquist, president, LSTC, said "The Cray XD1 supercomputer makes our code even more valuable to the engineers who use it to simulate collisions, structural deformations and failures, metal stamping, armor penetration and other complex, real-world materials problems. Now those engineers have a solution that provides optimal performance, functionality and scalability."
Sunday, April 17, 2005
IMF wants more flexible yuan
CNN.com
WASHINGTON (Reuters) -- China should adopt a more flexible exchange rate system while its economy is strong -- a move that would give Beijing more policy tools and improve Asia's currency flexibility, the International Monetary Fund's Asia director said on Sunday.
David Burton said the IMF believed that despite Chinese fears its currency would rise in value, hurting exports and employment as a result, freeing the renminbi would be 'desirable'.
'In the short run, given the sort of pressures on the renminbi, it certainly would mean it would appreciate, but we think that flexibility is the right thing for China,' Burton told Reuters.
He said the timing and nature of any Chinese currency move was hard to predict and 'something that has to be decided at a very high level politically in China.' But he also said 'many conditions are quite favorable' for moving now.
'It's always best to do these things from a position of strength -- that's one of the lessons from international experience,' Burton said in an interview on the sidelines of the IMF and World Bank spring meetings of financial leaders.
WASHINGTON (Reuters) -- China should adopt a more flexible exchange rate system while its economy is strong -- a move that would give Beijing more policy tools and improve Asia's currency flexibility, the International Monetary Fund's Asia director said on Sunday.
David Burton said the IMF believed that despite Chinese fears its currency would rise in value, hurting exports and employment as a result, freeing the renminbi would be 'desirable'.
'In the short run, given the sort of pressures on the renminbi, it certainly would mean it would appreciate, but we think that flexibility is the right thing for China,' Burton told Reuters.
He said the timing and nature of any Chinese currency move was hard to predict and 'something that has to be decided at a very high level politically in China.' But he also said 'many conditions are quite favorable' for moving now.
'It's always best to do these things from a position of strength -- that's one of the lessons from international experience,' Burton said in an interview on the sidelines of the IMF and World Bank spring meetings of financial leaders.
Commodity prices surging across the board
HoustonChronicle.com
WASHINGTON - It's not just gasoline. Prices for many other commodities, from roofing lumber to copper to coffee beans, are surging, many to levels not seen in decades. And demand is more global than ever.
'Never has there been a commodities boom like it,' declared the Financial Times, a British business daily.
Increases of a dime or a quarter collectively add up to inflation. Usually, price increases in some sectors of the economy are offset by decreases in others.
But the across-the-board rise in commodity prices makes it more expensive to make and deliver products. That's fueling fears of inflation and of higher interest rates to curb it.
The boom in commodities grew quietly and steadily over the three years that the global economy has been growing. Copper is trading on mercantile exchanges at its highest levels in 16 years, aluminum prices hit a 10-year high in March and iron-ore producers this month raised the price they charge many steel mills, which use the ore to make steel, by 71.5 percent.
Historically, commodity prices rose or fell together depending on the strength of the world economy, which was driven largely by the U.S. economy, along with Japan and Western Europe.
But some economists think today's commodities boom reflects new forces, mainly the emergence of China and, to some extent, India as global consumers.
WASHINGTON - It's not just gasoline. Prices for many other commodities, from roofing lumber to copper to coffee beans, are surging, many to levels not seen in decades. And demand is more global than ever.
'Never has there been a commodities boom like it,' declared the Financial Times, a British business daily.
Increases of a dime or a quarter collectively add up to inflation. Usually, price increases in some sectors of the economy are offset by decreases in others.
But the across-the-board rise in commodity prices makes it more expensive to make and deliver products. That's fueling fears of inflation and of higher interest rates to curb it.
The boom in commodities grew quietly and steadily over the three years that the global economy has been growing. Copper is trading on mercantile exchanges at its highest levels in 16 years, aluminum prices hit a 10-year high in March and iron-ore producers this month raised the price they charge many steel mills, which use the ore to make steel, by 71.5 percent.
Historically, commodity prices rose or fell together depending on the strength of the world economy, which was driven largely by the U.S. economy, along with Japan and Western Europe.
But some economists think today's commodities boom reflects new forces, mainly the emergence of China and, to some extent, India as global consumers.
Labels: Copper
Honda marries car making with soybean processing
What a neat idea ..
Detroit Free Press
MARYSVILLE, Ohio (AP) -- Honda Motor Co. expects to set an export record this year -- in the soybeans it returns to Japan in containers that arrived with instrument dials, transmission gears and other spare parts.
In the shadow of its auto plant, the company every hour processes 550 bushels of soybeans that end up as tofu and soy sauce.
The automaker, which expects to sell a record 1 million bushels this year, is looking for markets in Australia and says potential customers in Europe and Thailand have expressed interest in shipments of the crop.
Honda began shipping soybeans in 1986 as a way to reuse cargo containers that were returning to Japan empty. The crop was plentiful in Ohio, there was a market for them in Japan, and the shipments were a way for the automaker to invest in a state it has operated in since 1983.
Between 250 and 280 farmers grow the soybeans for Honda on 32,000 acres in Ohio and Michigan. The region produces soybeans that are especially high in protein, a quality desired by Honda's Japanese customers because soybeans are a substitute for meat.
The growers are paid as much as $1.10 more a bushel than the $6.15 they would get on the open market.
Some of the soybeans are grown on Honda property, including in the infield of an auto test track.
Detroit Free Press
MARYSVILLE, Ohio (AP) -- Honda Motor Co. expects to set an export record this year -- in the soybeans it returns to Japan in containers that arrived with instrument dials, transmission gears and other spare parts.
In the shadow of its auto plant, the company every hour processes 550 bushels of soybeans that end up as tofu and soy sauce.
The automaker, which expects to sell a record 1 million bushels this year, is looking for markets in Australia and says potential customers in Europe and Thailand have expressed interest in shipments of the crop.
Honda began shipping soybeans in 1986 as a way to reuse cargo containers that were returning to Japan empty. The crop was plentiful in Ohio, there was a market for them in Japan, and the shipments were a way for the automaker to invest in a state it has operated in since 1983.
Between 250 and 280 farmers grow the soybeans for Honda on 32,000 acres in Ohio and Michigan. The region produces soybeans that are especially high in protein, a quality desired by Honda's Japanese customers because soybeans are a substitute for meat.
The growers are paid as much as $1.10 more a bushel than the $6.15 they would get on the open market.
Some of the soybeans are grown on Honda property, including in the infield of an auto test track.
Bonneville and Grand Coulee Dams Hit Dry Spell
It took a while to figure out what this story had to do with aluminum ... but it's there
Los Angeles Times via Yahoo! News
In 1941, folk singer Woody Guthrie wrote a paean to the Columbia River's Grand Coulee Dam, enthusing that power generated by the New Deal monument 'is turning our darkness to dawn.'
But this summer, the Pacific Northwest's mightiest river could leave California in the dark. A stubborn drought has reduced water levels behind the Columbia's network of power-producing dams by a third, leaving less electricity available for export to the south.
And that prospect is making California's power grid operators nervous.
California and the Pacific Northwest have a long history of mutual power dependence, dating to President Franklin D. Roosevelt's creation of the Bonneville Power Administration in 1937.
Roosevelt created the BPA to operate the massive Bonneville and Grand Coulee dams, as well as other hydroelectric dams on the Columbia River and its tributaries. The president envisioned the BPA as a kind of Western version of the Tennessee Valley Authority, the government corporation that dammed rivers and delivered electricity and industry to the rural South during the Depression.
During the next seven decades, the BPA, a self-financing federal government agency, has marketed power from 31 dams and other sources. The agency has been an engine of growth in what had been rural areas of Oregon and Washington, providing below-market-price power to aircraft manufacturers, aluminum smelters, computer makers and farmers.
I gather this happened before, in 2000/2001. At the time, the BPA suggested shutting down the aluminum smelters for 2 years. That went over well ... but in fact, it seems from my reading that some plants did close down.
From another article
Excluding alumina, electricity is the single largest costs of producing aluminum, and it is the cost that varies most significantly among smelters. The average price for power to the world's aluminum industry is generally believed to be a little below $20 per MWhr. Current prevailing power prices in the Northwest place this region in the highest 10% of electricity prices facing smelters in the world. At these prevailing prices, smelters in the Pacific Northwest can operate competitively only if aluminum prices are very high. Thus, the key to restoring competitiveness for GNA's smelters is to reduce their power cost.
Here's a forecast paper: Forecasting Electricity Demand Of The Region’s Aluminum Plants
And a 2003 summary of what happened, with the tongue in cheek subtitle of How the Aluminum Industry Saved the West
Other links: Bonneville Power Administration
What seems to be different this time compared to 2000/2001 is that the world price for Aluminum is (much) higher. It is now about 25% higher than in 2000 and about 50% higher than the trough of 2002/2003. So there may not have to be plant closures, and perhaps the aluminum smelters will be able to afford higher (spot market) electricity rates.
Los Angeles Times via Yahoo! News
In 1941, folk singer Woody Guthrie wrote a paean to the Columbia River's Grand Coulee Dam, enthusing that power generated by the New Deal monument 'is turning our darkness to dawn.'
But this summer, the Pacific Northwest's mightiest river could leave California in the dark. A stubborn drought has reduced water levels behind the Columbia's network of power-producing dams by a third, leaving less electricity available for export to the south.
And that prospect is making California's power grid operators nervous.
California and the Pacific Northwest have a long history of mutual power dependence, dating to President Franklin D. Roosevelt's creation of the Bonneville Power Administration in 1937.
Roosevelt created the BPA to operate the massive Bonneville and Grand Coulee dams, as well as other hydroelectric dams on the Columbia River and its tributaries. The president envisioned the BPA as a kind of Western version of the Tennessee Valley Authority, the government corporation that dammed rivers and delivered electricity and industry to the rural South during the Depression.
During the next seven decades, the BPA, a self-financing federal government agency, has marketed power from 31 dams and other sources. The agency has been an engine of growth in what had been rural areas of Oregon and Washington, providing below-market-price power to aircraft manufacturers, aluminum smelters, computer makers and farmers.
I gather this happened before, in 2000/2001. At the time, the BPA suggested shutting down the aluminum smelters for 2 years. That went over well ... but in fact, it seems from my reading that some plants did close down.
From another article
Excluding alumina, electricity is the single largest costs of producing aluminum, and it is the cost that varies most significantly among smelters. The average price for power to the world's aluminum industry is generally believed to be a little below $20 per MWhr. Current prevailing power prices in the Northwest place this region in the highest 10% of electricity prices facing smelters in the world. At these prevailing prices, smelters in the Pacific Northwest can operate competitively only if aluminum prices are very high. Thus, the key to restoring competitiveness for GNA's smelters is to reduce their power cost.
Here's a forecast paper: Forecasting Electricity Demand Of The Region’s Aluminum Plants
And a 2003 summary of what happened, with the tongue in cheek subtitle of How the Aluminum Industry Saved the West
Other links: Bonneville Power Administration
What seems to be different this time compared to 2000/2001 is that the world price for Aluminum is (much) higher. It is now about 25% higher than in 2000 and about 50% higher than the trough of 2002/2003. So there may not have to be plant closures, and perhaps the aluminum smelters will be able to afford higher (spot market) electricity rates.
Saturday, April 16, 2005
IG Metall union calls for German steel industry workers to launch warning strike
It seems there's some tough sledding ahead in the steel business these days ...
AFX
SPROCKHOEVEL, Germany - IG Metall called for 85,000 German steel industry workers to launch a warning strike on Tuesday after the third round of wage talks ended inconclusively yesterday.
ThyssenKrupp AG and Salzgitter AG, Germany's two largest steel producers, said the union had not informed them of its plans for industrial action and that as a result they did not know whether steel production would be affected.
An IG Metall spokesman referred to the proposed 1.9 pct wage increase as a 'provocation' in light of record earnings by German steel producers.
The union wants salaries to increase by 6.5 pct.
and
New York (MarketWatch) -- Earle M. Jorgensen Co. fell below its offering price in its stock market debut Friday, as the swooning metal sector took the steel tube distributor along with it.
and
The End of the Steel Boom
The Motley Fool
Steel yourself for this: The boom times might be over in the steel sector.
You would need more than steel girders propping up your portfolio these days if the steel sector made up any significant portion of it. After enjoying insane demand for steel products in everything from construction to cars, it looks as though capacity may have been reached for demand. Indeed, it could have exceeded demand, and when one considers worldwide production levels, it's tough to draw any other conclusion.
AFX
SPROCKHOEVEL, Germany - IG Metall called for 85,000 German steel industry workers to launch a warning strike on Tuesday after the third round of wage talks ended inconclusively yesterday.
ThyssenKrupp AG and Salzgitter AG, Germany's two largest steel producers, said the union had not informed them of its plans for industrial action and that as a result they did not know whether steel production would be affected.
An IG Metall spokesman referred to the proposed 1.9 pct wage increase as a 'provocation' in light of record earnings by German steel producers.
The union wants salaries to increase by 6.5 pct.
and
New York (MarketWatch) -- Earle M. Jorgensen Co. fell below its offering price in its stock market debut Friday, as the swooning metal sector took the steel tube distributor along with it.
and
The End of the Steel Boom
The Motley Fool
Steel yourself for this: The boom times might be over in the steel sector.
You would need more than steel girders propping up your portfolio these days if the steel sector made up any significant portion of it. After enjoying insane demand for steel products in everything from construction to cars, it looks as though capacity may have been reached for demand. Indeed, it could have exceeded demand, and when one considers worldwide production levels, it's tough to draw any other conclusion.
Friday, April 15, 2005
Industrial Output Up 0.3 Percent in March
Yahoo! News
WASHINGTON - Output at the nation's factories, mines and utilities rose by 0.3 percent in March despite the first decline in manufacturing activity in six months, the government reported Friday.
The overall 0.3 percent increase in industrial production was in line with economists' expectations although they had not anticipated the decline in factory production.
Production at U.S. factories edged down 0.1 percent last month as auto plants cut back on production. It was the first factory decline since a 0.4 percent drop last September.
WASHINGTON - Output at the nation's factories, mines and utilities rose by 0.3 percent in March despite the first decline in manufacturing activity in six months, the government reported Friday.
The overall 0.3 percent increase in industrial production was in line with economists' expectations although they had not anticipated the decline in factory production.
Production at U.S. factories edged down 0.1 percent last month as auto plants cut back on production. It was the first factory decline since a 0.4 percent drop last September.
Trade Panel Votes to Keep Steel Tariffs
Yahoo! News
WASHINGTON - Tariffs should be kept on some steel imports for five years, a U.S. trade panel voted Thursday, a victory for the industry that wants to maintain the protection as it struggles to rebound from bankruptcies.
The duties were implemented in 1999 to prevent a flood of low-priced hot-rolled steel from the three foreign markets. The three countries dumped about 7 million tons of hot-rolled steel in 1998, trade officials said, part of an unprecedented surge into the American market.
A second wave of steel imports from 11 other countries led to additional tariffs in 2002, which President Bush lifted in late 2003.
"This decision is a victory for our steel industry. It will help protect the livelihood of our steelworkers, their families and their communities," said Sen. Jay Rockefeller, D-W.Va.
Automakers, suppliers and domestic manufacturers that use steel said the tariffs were causing higher prices and harming their ability to stay competitive.
Ford Motor Co. said in a statement that the decision "seriously impacts steel consuming manufacturers as well as our entire economy." The automaker predicted that the United States "will continue to see constrained supplies of steel and prices that are artificially high."
Rep. Mike Rogers, R-Mich., said the ruling was unfair and could lead to suppliers shifting their business overseas in order to remain competitive. A trade panel of the House Energy and Commerce Committee plans to hold hearings on the issue soon, he said.
"This decision is the wrong decision, at the wrong time, for the wrong reasons," Rogers said.
The U.S. steel industry has rebounded and reorganized since the tariffs were first ordered and the sector turned a profit in 2004 for the first time in years.
WASHINGTON - Tariffs should be kept on some steel imports for five years, a U.S. trade panel voted Thursday, a victory for the industry that wants to maintain the protection as it struggles to rebound from bankruptcies.
The duties were implemented in 1999 to prevent a flood of low-priced hot-rolled steel from the three foreign markets. The three countries dumped about 7 million tons of hot-rolled steel in 1998, trade officials said, part of an unprecedented surge into the American market.
A second wave of steel imports from 11 other countries led to additional tariffs in 2002, which President Bush lifted in late 2003.
"This decision is a victory for our steel industry. It will help protect the livelihood of our steelworkers, their families and their communities," said Sen. Jay Rockefeller, D-W.Va.
Automakers, suppliers and domestic manufacturers that use steel said the tariffs were causing higher prices and harming their ability to stay competitive.
Ford Motor Co. said in a statement that the decision "seriously impacts steel consuming manufacturers as well as our entire economy." The automaker predicted that the United States "will continue to see constrained supplies of steel and prices that are artificially high."
Rep. Mike Rogers, R-Mich., said the ruling was unfair and could lead to suppliers shifting their business overseas in order to remain competitive. A trade panel of the House Energy and Commerce Committee plans to hold hearings on the issue soon, he said.
"This decision is the wrong decision, at the wrong time, for the wrong reasons," Rogers said.
The U.S. steel industry has rebounded and reorganized since the tariffs were first ordered and the sector turned a profit in 2004 for the first time in years.
Thursday, April 14, 2005
Stelco comments on USWA letter of intent with Tricap
HAMILTON, ON, Apr 13, 2005 Stelco Inc. today commented on the Letter of Intent signed by the USWA and Tricap Management Limited ("Tricap") and announced this afternoon. Stelco was not a party to the letter.
The Company noted that a Court-approved capital raising process, where third parties were invited to participate, was run earlier this year. Tricap was invited to and had an opportunity to participate in the process that took place between October 2004 and February 2005, but declined to so.
Stelco is now pursuing a Court-approved stand-alone process to raise capital that will allow it to emerge from CCAA protection. The Stelco-driven process will seek to address all stakeholders concerns, not just those of the USWA.
Hap Stephen, Stelco's Chief Restructuring Officer, said, "We all want to see Stelco emerge from its restructuring as successfully and as quickly as possible. That can only be done within an objective process that provides certainty, involves recognized stakeholders, and addresses their interests.
"A Court-approved capital raising process is already in place. All interested parties have had the opportunity to take any concerns about that process to the Court. The Company with the assistance of its advisors are implementing that process with the interests of all stakeholders in mind. We will discharge our responsibility, proceed with the Court-approved process and report to all stakeholders accordingly."
The Company noted that a Court-approved capital raising process, where third parties were invited to participate, was run earlier this year. Tricap was invited to and had an opportunity to participate in the process that took place between October 2004 and February 2005, but declined to so.
Stelco is now pursuing a Court-approved stand-alone process to raise capital that will allow it to emerge from CCAA protection. The Stelco-driven process will seek to address all stakeholders concerns, not just those of the USWA.
Hap Stephen, Stelco's Chief Restructuring Officer, said, "We all want to see Stelco emerge from its restructuring as successfully and as quickly as possible. That can only be done within an objective process that provides certainty, involves recognized stakeholders, and addresses their interests.
"A Court-approved capital raising process is already in place. All interested parties have had the opportunity to take any concerns about that process to the Court. The Company with the assistance of its advisors are implementing that process with the interests of all stakeholders in mind. We will discharge our responsibility, proceed with the Court-approved process and report to all stakeholders accordingly."
Labels: stelco
Steelworkers, Brascan Offer Stelco Financing Plan
Yahoo! News
TORONTO (Reuters) - The United Steelworkers of America said on Wednesday it has signed a letter of intent with Brascan Corp. to offer a plan to recapitalize Stelco Inc. and bring Canada's biggest steelmaker out of bankruptcy protection.
The Steelworkers said the C$1.35 billion ($1 billion) financing plan includes an immediate C$500 million contribution to Stelco's pension plans and C$100 million to repay the company's creditors.
The remaining C$750 million would be retained within Stelco so the steelmaker can fund its capital expenditure program and general corporate purposes.
The Steelworkers union represents almost 5,000 of Stelco's roughly 8,900 employees.
Stelco, which entered bankruptcy protection in January 2004, is working on a plan to raise capital on equity and debt markets after snubbing several takeover offers to help it emerge from the Companies' Creditors Arrangement Act.
A spokeswoman for the Hamilton, Ontario-based steelmaker said Stelco is looking over details of the Steelworkers-Brascan plan and expects to release comments shortly.
A few hours later,
Stelco Rejects Offer From Steelworkers And Brascan
Stelco Inc. turned down a financing plan from the United Steelworkers of America and Brascan Corp. on Wednesday as the insolvent steelmaker said it has started working toward raising capital on its own.
Stelco said Brascan already had its a chance to step into the process when the company was entertaining takeover offers during a court-approved process that ended in February.
The steelmaker snubbed several takeover offers to help it escape the Companies' Creditors Arrangement Act and later got court approval to work on its own plan for raising capital.
TORONTO (Reuters) - The United Steelworkers of America said on Wednesday it has signed a letter of intent with Brascan Corp. to offer a plan to recapitalize Stelco Inc. and bring Canada's biggest steelmaker out of bankruptcy protection.
The Steelworkers said the C$1.35 billion ($1 billion) financing plan includes an immediate C$500 million contribution to Stelco's pension plans and C$100 million to repay the company's creditors.
The remaining C$750 million would be retained within Stelco so the steelmaker can fund its capital expenditure program and general corporate purposes.
The Steelworkers union represents almost 5,000 of Stelco's roughly 8,900 employees.
Stelco, which entered bankruptcy protection in January 2004, is working on a plan to raise capital on equity and debt markets after snubbing several takeover offers to help it emerge from the Companies' Creditors Arrangement Act.
A spokeswoman for the Hamilton, Ontario-based steelmaker said Stelco is looking over details of the Steelworkers-Brascan plan and expects to release comments shortly.
A few hours later,
Stelco Rejects Offer From Steelworkers And Brascan
Stelco Inc. turned down a financing plan from the United Steelworkers of America and Brascan Corp. on Wednesday as the insolvent steelmaker said it has started working toward raising capital on its own.
Stelco said Brascan already had its a chance to step into the process when the company was entertaining takeover offers during a court-approved process that ended in February.
The steelmaker snubbed several takeover offers to help it escape the Companies' Creditors Arrangement Act and later got court approval to work on its own plan for raising capital.
Labels: stelco
Steel market may be cooler but it's still holding strong, observers say
Yahoo! News
TORONTO (CP) - The roaring steel market, fuelled by sales to China over the past year, is letting off some steam as global prices soften and demand drops.
"We're on the knife's edge here," says Michael Locker, president of New York-based steel consultants Locker Associates. "A lot of people are becoming pessimistic and saying that prices are going to go in the dumper. Certainly they've been weaker, but they're not terrible."
The second quarter continues to show signs of weakness, Cousins added, and troubles in the automotive sector are putting a crimp in prices.
But the steel market is also adjusting to an overhang of inventory, which could mean the softening prices are only temporary.
Locker said customers "way overbought on the anticipation last year that prices were going to continue to zip up. Now they're overloaded and they have to work down the inventory."
Cousins noted that, although prices have fallen, they are still far above the $250 US a ton that hot rolled sheet garnered in mid-2003.
TORONTO (CP) - The roaring steel market, fuelled by sales to China over the past year, is letting off some steam as global prices soften and demand drops.
"We're on the knife's edge here," says Michael Locker, president of New York-based steel consultants Locker Associates. "A lot of people are becoming pessimistic and saying that prices are going to go in the dumper. Certainly they've been weaker, but they're not terrible."
The second quarter continues to show signs of weakness, Cousins added, and troubles in the automotive sector are putting a crimp in prices.
But the steel market is also adjusting to an overhang of inventory, which could mean the softening prices are only temporary.
Locker said customers "way overbought on the anticipation last year that prices were going to continue to zip up. Now they're overloaded and they have to work down the inventory."
Cousins noted that, although prices have fallen, they are still far above the $250 US a ton that hot rolled sheet garnered in mid-2003.
Wednesday, April 13, 2005
Steel Beams Fall On Florida Man Waiting At Bus Stop
I know 99%+ of all loads are chained and tarped properly, but I gotta tell you, I still stay far away from these rigs on the highway, especially on incorrectly banked curves....
nbc6.net - News
FORT LAUDERDALE, Fla. -- A South Florida man remains hospitalized after steel beams from a passing tractor-trailer fell on him while he was waiting for a bus in Fort Lauderdale.
Officials said it appeared the steel beams shifted and fell off the bed of the tractor-trailer, hitting the bench where Jose Conte-Gomez and Mario Francini sat waiting for the bus.
Some pictures here. According to the article, the yellow straps you can see were placed there by the rescue people. I can't see in any of the pictures where the original hold-downs went. But the pictures aren't of great quality, so maybe that's why. Or maybe they were flung clear when they broke.
Scarey images, though.
nbc6.net - News
FORT LAUDERDALE, Fla. -- A South Florida man remains hospitalized after steel beams from a passing tractor-trailer fell on him while he was waiting for a bus in Fort Lauderdale.
Officials said it appeared the steel beams shifted and fell off the bed of the tractor-trailer, hitting the bench where Jose Conte-Gomez and Mario Francini sat waiting for the bus.
Some pictures here. According to the article, the yellow straps you can see were placed there by the rescue people. I can't see in any of the pictures where the original hold-downs went. But the pictures aren't of great quality, so maybe that's why. Or maybe they were flung clear when they broke.
Scarey images, though.
Tuesday, April 12, 2005
China's Currency Manipulation: A Major Cause of Widening Trade Gap
Another voice heard from ... China's economic distortion by currency manipulation is making a farce of the "level playing field"
China and some other Asian nations continue to keep the dollar artificially high so they can keep their exports to us far higher than they would be without such anti-market manipulations,� Vargo explained.
“After adjusting for relevant price changes,� Vargo continued, “the volume of Canadian and Mexican imports was up just 4 percent in February over the previous 12 months, and the volume of E.U. imports was up less than 2 percent.
“By contrast, China’s imports have increased by 51 percent during the same timeframe and have accounted for a whopping 44 percent of growth in overall goods imports to the U.S.,� Vargo noted.
“It’s most unfortunate that the dollar’s correction has been shouldered only by those economies that don’t artificially manage their currencies for export promotion. To correct this problem, the Administration, other governments and international institutions must work harder to persuade countries such as China to let their currencies be valued by market forces. The current situation hurts countries playing by the rules and dangerously fans neo-protectionist embers,� concluded Vargo.
Campaigning against China's currency manipulation has been going on for some time, see:
SENATORS ANNOUNCE BIPARTISAN EFFORT TO FORCE CHINA TO STOP CURRENCY MANIPULATION September 9, 2003
New Bipartisan Congressional Coalition Urges President to Increase Pressure on China to Float its Currency July 31, 2003
Here's something a little more recent ..
WalMart, The Coming War With China, & Currency Manipulation
I am not particularly tolerant of protectionism, but China's manipulation of exchange rates is playing a major part in creating very serious problems.
Yes, I know that much of the anti-WalMart fever is labor union efforts to beat up on one of the big union busters, but part of why WalMart is so big is that it is largely Red China's salesclerk. China's fixed exchange rate--when most other nations having floating exchange rates--is part of the problem.
Then there's this group, of which we are indirect members via our membership in the PMA
The China Currency Coalition is an alliance of industry, agriculture, and worker organizations whose mission is to support U.S. manufacturing by seeking an end to Chinese currency manipulation.
An interesting article, Currency Manipulation and Free Trade from Steelnet.org
Global commerce offers the United States significant opportunities to improve productivity and raise living standards. However, Chinese intervention in currency markets to maintain an artificially undervalued yuan is denying Americans many of the benefits of freer trade.
[...]
Exchange rates are prices, and the value of a nation’s currency is the most fundamental price in a globalized economy. Without assurances that other governments will not resort to manipulating exchange rates to advantage their producers, the gains from trade can be wiped out.
That is exactly what is happening to the United States.
China and some other Asian nations continue to keep the dollar artificially high so they can keep their exports to us far higher than they would be without such anti-market manipulations,� Vargo explained.
“After adjusting for relevant price changes,� Vargo continued, “the volume of Canadian and Mexican imports was up just 4 percent in February over the previous 12 months, and the volume of E.U. imports was up less than 2 percent.
“By contrast, China’s imports have increased by 51 percent during the same timeframe and have accounted for a whopping 44 percent of growth in overall goods imports to the U.S.,� Vargo noted.
“It’s most unfortunate that the dollar’s correction has been shouldered only by those economies that don’t artificially manage their currencies for export promotion. To correct this problem, the Administration, other governments and international institutions must work harder to persuade countries such as China to let their currencies be valued by market forces. The current situation hurts countries playing by the rules and dangerously fans neo-protectionist embers,� concluded Vargo.
Campaigning against China's currency manipulation has been going on for some time, see:
SENATORS ANNOUNCE BIPARTISAN EFFORT TO FORCE CHINA TO STOP CURRENCY MANIPULATION September 9, 2003
New Bipartisan Congressional Coalition Urges President to Increase Pressure on China to Float its Currency July 31, 2003
Here's something a little more recent ..
WalMart, The Coming War With China, & Currency Manipulation
I am not particularly tolerant of protectionism, but China's manipulation of exchange rates is playing a major part in creating very serious problems.
Yes, I know that much of the anti-WalMart fever is labor union efforts to beat up on one of the big union busters, but part of why WalMart is so big is that it is largely Red China's salesclerk. China's fixed exchange rate--when most other nations having floating exchange rates--is part of the problem.
Then there's this group, of which we are indirect members via our membership in the PMA
The China Currency Coalition is an alliance of industry, agriculture, and worker organizations whose mission is to support U.S. manufacturing by seeking an end to Chinese currency manipulation.
An interesting article, Currency Manipulation and Free Trade from Steelnet.org
Global commerce offers the United States significant opportunities to improve productivity and raise living standards. However, Chinese intervention in currency markets to maintain an artificially undervalued yuan is denying Americans many of the benefits of freer trade.
[...]
Exchange rates are prices, and the value of a nation’s currency is the most fundamental price in a globalized economy. Without assurances that other governments will not resort to manipulating exchange rates to advantage their producers, the gains from trade can be wiped out.
That is exactly what is happening to the United States.
Louie One-Note
National Association of Manufacturers Blog
Lou Dobbs has got to have the best gig on TV -- or anywhere, for that matter. He not only has his own nightly show, but he's managed to do the same story every night, 'the outsourcing of America.' Every time we see it, it reminds us of Jim Glassman's admonishment when he appeared on Dobbs' show: 'You went to Harvard, Lou -- you should know better.'
[...]
The truth is that through boom and bust we have competed against "cheap foreign labor" for at least the last century, and won.
Lou Dobbs has got to have the best gig on TV -- or anywhere, for that matter. He not only has his own nightly show, but he's managed to do the same story every night, 'the outsourcing of America.' Every time we see it, it reminds us of Jim Glassman's admonishment when he appeared on Dobbs' show: 'You went to Harvard, Lou -- you should know better.'
[...]
The truth is that through boom and bust we have competed against "cheap foreign labor" for at least the last century, and won.
AK Steel adds Titanium Surcharge
AK Steel Corp. announced Monday a new surcharge on all stainless steel raw materials that include titanium, pointing to a nearly five-fold increase in the cost of titanium since early 2004.
The surcharge, effective on shipments on and after May 1, will be applied to all grades of stainless steel sheet, strip and plate products that contain a titanium addition.
The company said the charge will be calculated based on the percentage of titanium used by stainless steel grade, using a base rate of $3.50 per pound along with the average monthly price as published by Ryan's Notes, a publication that reports and sets prices for the metal industry.
The surcharge, effective on shipments on and after May 1, will be applied to all grades of stainless steel sheet, strip and plate products that contain a titanium addition.
The company said the charge will be calculated based on the percentage of titanium used by stainless steel grade, using a base rate of $3.50 per pound along with the average monthly price as published by Ryan's Notes, a publication that reports and sets prices for the metal industry.
Monday, April 11, 2005
Stelco reports results for the fourth quarter and year 2004
Stelco
For the year ended December 31, 2004, Stelco reported net earnings of $65 million ($0.63 per common share) compared with a restated net loss of $564 million ($5.62 per common share) for the year ended December 31, 2003.
Courtney Pratt, Stelco's President and Chief Executive Officer, said, "While our cash and financial positions have obviously improved during the past year, we had hoped for a more positive fourth quarter. As we indicated on March 8, 2005, the results for that period were adversely affected by repair and maintenance activity, the resulting impact on output and productivity, and the increased cost of such raw materials as coke, coal and scrap. Looking ahead, we anticipate a positive year in 2005 in terms of operating earnings and steel prices. As a consequence the Company is reaffirming its 2005 guidance issued on March 8, 2005. We remain focused on achieving the successful conclusion of our Court-supervised restructuring process in the coming months."
For the year ended December 31, 2004, Stelco reported net earnings of $65 million ($0.63 per common share) compared with a restated net loss of $564 million ($5.62 per common share) for the year ended December 31, 2003.
Courtney Pratt, Stelco's President and Chief Executive Officer, said, "While our cash and financial positions have obviously improved during the past year, we had hoped for a more positive fourth quarter. As we indicated on March 8, 2005, the results for that period were adversely affected by repair and maintenance activity, the resulting impact on output and productivity, and the increased cost of such raw materials as coke, coal and scrap. Looking ahead, we anticipate a positive year in 2005 in terms of operating earnings and steel prices. As a consequence the Company is reaffirming its 2005 guidance issued on March 8, 2005. We remain focused on achieving the successful conclusion of our Court-supervised restructuring process in the coming months."
Labels: stelco
Copper Reaches Record in London; China Stockpiles May Dwindle
Every few weeks we get one of these stories; I've stopped reporting them for the most part because they're boring, but you need to know it's still happening ...
Bloomberg.com: Canada
Copper futures reached a record on the London Metal Exchange on speculation demand will outstrip supply in China, the world's largest consumer.
Copper for delivery in three months climbed to $3,316 a metric ton, the highest since the contract began trading in its current form in 1986 and $8 more than the March 31 peak. The metal was up $23, or 0.7 percent, to $3,310 at 11:26 a.m. London time.
``It reflects continued tight supply situation in Asia,'' John Meyer, an analyst at Numis Corp., said in a telephone interview. ``In Europe, consumers have also been forced to return to the market after delaying purchasing.''
If you head over to the London Metals Exchange, a few minutes playing with their interactive graph maker produces this graph:
The dates across the bottom are this day (April 11th) in 2001 to today.
The numbers up the left side are US$/tonne.
Pretty scarey if you do a lot of copper or copper alloys (brass, BeCu, etc), especially if any significant amount of it is fixed price contracts.
Bloomberg.com: Canada
Copper futures reached a record on the London Metal Exchange on speculation demand will outstrip supply in China, the world's largest consumer.
Copper for delivery in three months climbed to $3,316 a metric ton, the highest since the contract began trading in its current form in 1986 and $8 more than the March 31 peak. The metal was up $23, or 0.7 percent, to $3,310 at 11:26 a.m. London time.
``It reflects continued tight supply situation in Asia,'' John Meyer, an analyst at Numis Corp., said in a telephone interview. ``In Europe, consumers have also been forced to return to the market after delaying purchasing.''
If you head over to the London Metals Exchange, a few minutes playing with their interactive graph maker produces this graph:
The dates across the bottom are this day (April 11th) in 2001 to today.
The numbers up the left side are US$/tonne.
Pretty scarey if you do a lot of copper or copper alloys (brass, BeCu, etc), especially if any significant amount of it is fixed price contracts.
Labels: Copper
High steel prices continue to dog U.S. manufacturers
Pittsburgh Business Times
Smaller firms might have to permanently pass on costs
The red-hot steel prices that propelled steelmakers to profitability in 2004 continue to suppress the fiscal well-being of many manufacturers.
"Things are worse now than ever in terms of prices for steel. The manufacturers for which the costs of steel and other metals comprise the biggest percentage of the overall cost of production are the most affected," said Cliff Shannon, president of SMC Business Councils in Churchill.
"If you are making relatively smaller, complex metal pieces for which the cost of metal is very much secondary to the cost of skilled labor and machining needed to meet exacting tolerances and specifications, material prices affect you much less."
Mr. Shannon said second- and third-tier manufacturers may be able to bolster their bottom lines by passing some of the increase along to their customers.
Jonathan Hall, president and CEO of Hall Industries Inc. in Ellwood City, Pa., noticed the price of steel beginning to climb three years ago. He said the increase was about 10 percent in the first two years, but topped 20 percent in 2004 with the cost of thick-plate products skyrocketing by more than 50 percent.
"The last three-year price trend has been hard, especially since we experienced a very stable market price for steel products during the previous five years," said Mr. Hall. "For the most part, we're trying to pass the price increases on to our customers. However, this is very difficult, if not impossible, on fixed-price contracts."
Hall Industries manufactures equipment for the mass transportation, aviation, architectural and bridge industries.
"Higher prices generally mean lower demand, depending on how elastic the particular product is to price," added Mr. Hall. "In today's market, some of the larger companies are requiring their vendors to adopt a 'no price increases' policy. In the current environment of steel price increases, we are seeing a lot of business being lost -- some to China."
Wayne Atwell, managing director at Morgan Stanley in Purchase, N.Y., said steel prices bottomed out in July 2003 and started to go up the next month. The increases were noted in all product lines with the biggest hike being reported for flat-rolled steel.
"Hot-rolled bottomed in June 2003 at $266 per ton, peaked in September 2004 at $816 and is now at about $689," said Mr. Atwell.
The higher prices for steel and scrap metal have been driven by a weak U.S. dollar, booming international demand from countries, such as China, and a tight supply of raw materials, primarily coal and iron ore, used to make the steel. Over the past month, iron ore prices have climbed by more than 70 percent. Over the past three quarters, coal prices have jumped 125 percent.
"This is the strongest pricing environment for steel in 50 years," said Mr. Atwell.
Smaller firms might have to permanently pass on costs
The red-hot steel prices that propelled steelmakers to profitability in 2004 continue to suppress the fiscal well-being of many manufacturers.
"Things are worse now than ever in terms of prices for steel. The manufacturers for which the costs of steel and other metals comprise the biggest percentage of the overall cost of production are the most affected," said Cliff Shannon, president of SMC Business Councils in Churchill.
"If you are making relatively smaller, complex metal pieces for which the cost of metal is very much secondary to the cost of skilled labor and machining needed to meet exacting tolerances and specifications, material prices affect you much less."
Mr. Shannon said second- and third-tier manufacturers may be able to bolster their bottom lines by passing some of the increase along to their customers.
Jonathan Hall, president and CEO of Hall Industries Inc. in Ellwood City, Pa., noticed the price of steel beginning to climb three years ago. He said the increase was about 10 percent in the first two years, but topped 20 percent in 2004 with the cost of thick-plate products skyrocketing by more than 50 percent.
"The last three-year price trend has been hard, especially since we experienced a very stable market price for steel products during the previous five years," said Mr. Hall. "For the most part, we're trying to pass the price increases on to our customers. However, this is very difficult, if not impossible, on fixed-price contracts."
Hall Industries manufactures equipment for the mass transportation, aviation, architectural and bridge industries.
"Higher prices generally mean lower demand, depending on how elastic the particular product is to price," added Mr. Hall. "In today's market, some of the larger companies are requiring their vendors to adopt a 'no price increases' policy. In the current environment of steel price increases, we are seeing a lot of business being lost -- some to China."
Wayne Atwell, managing director at Morgan Stanley in Purchase, N.Y., said steel prices bottomed out in July 2003 and started to go up the next month. The increases were noted in all product lines with the biggest hike being reported for flat-rolled steel.
"Hot-rolled bottomed in June 2003 at $266 per ton, peaked in September 2004 at $816 and is now at about $689," said Mr. Atwell.
The higher prices for steel and scrap metal have been driven by a weak U.S. dollar, booming international demand from countries, such as China, and a tight supply of raw materials, primarily coal and iron ore, used to make the steel. Over the past month, iron ore prices have climbed by more than 70 percent. Over the past three quarters, coal prices have jumped 125 percent.
"This is the strongest pricing environment for steel in 50 years," said Mr. Atwell.
ISG restarting idled steel mill to meet demand
Fort Wayne Journal Gazette
International Steel Group Inc. has restarted an idled plate steel mill in northwestern Indiana to meet the growing number of orders placed by its industrial and military customers.
The company has hired 65 new employees to operate the 110-inch plate mill in Burns Harbor, which produces carbon, high-strength low-alloy and alloy plate steel used by the rail, heavy equipment, agriculture and utility industries. The ISG Plate Division also is a major supplier of armored plate products used to protect the U.S. military forces serving in Iraq and elsewhere.
International Steel Group Inc. has restarted an idled plate steel mill in northwestern Indiana to meet the growing number of orders placed by its industrial and military customers.
The company has hired 65 new employees to operate the 110-inch plate mill in Burns Harbor, which produces carbon, high-strength low-alloy and alloy plate steel used by the rail, heavy equipment, agriculture and utility industries. The ISG Plate Division also is a major supplier of armored plate products used to protect the U.S. military forces serving in Iraq and elsewhere.
Sunday, April 10, 2005
Where did the links go?
Blogger is a great tool, but some days I just want to pull my hair out.
Today Blogger started putting all my links, which were up until now in the left margin, at the bottom. But only on the front page.
So if you want to search the archives or the other cool links, scroll down to the bottom. Sorry.
Today Blogger started putting all my links, which were up until now in the left margin, at the bottom. But only on the front page.
So if you want to search the archives or the other cool links, scroll down to the bottom. Sorry.
NAM to Launch Satellite
There aren't that many manufacturing BLOGs (ours being amongst the first) but the NAM (National Association of Manufacturers) has been running a blog since about November of 2004.
On April 1st past they ran this article, which I managed to miss at the time, but am reprinting here now because I like April fools ... it's a chance for us all to make fun of ourselves.
NAM to Launch Satellite
The NAM today announced an ambitious plan to launch its own satellite by decade's end. In making the announcement, the NAM Board, meeting in Aventura, Florida, took note of the sheer ambition of the plan. 'We recognize this is a heroic effort', the Board said in a statement, 'but these times demand bold moves.'
The deal calls for NAM-member manufacturers to provide component materials at cost. As a result, this satellite will cost billions less than the off-the-shelf Best Buy or Wal-Mart models.
When fully operational, the satellite will beam pro-manufacturing programming -- both overt and subliminal -- around the globe 24 hours a day, 7 days a week. Using the latest 'smart' satellite technology, it will also be able to detect and block any programming from other satellites at odds with the NAM message.
The current blog entries can be found here.
On April 1st past they ran this article, which I managed to miss at the time, but am reprinting here now because I like April fools ... it's a chance for us all to make fun of ourselves.
NAM to Launch Satellite
The NAM today announced an ambitious plan to launch its own satellite by decade's end. In making the announcement, the NAM Board, meeting in Aventura, Florida, took note of the sheer ambition of the plan. 'We recognize this is a heroic effort', the Board said in a statement, 'but these times demand bold moves.'
The deal calls for NAM-member manufacturers to provide component materials at cost. As a result, this satellite will cost billions less than the off-the-shelf Best Buy or Wal-Mart models.
When fully operational, the satellite will beam pro-manufacturing programming -- both overt and subliminal -- around the globe 24 hours a day, 7 days a week. Using the latest 'smart' satellite technology, it will also be able to detect and block any programming from other satellites at odds with the NAM message.
The current blog entries can be found here.
China to adopt measures to cope with price hike of iron ore
People's Daily Online, English Edition
The Chinese government plans to cope with rising iron ore prices in the international market by strictly controlling real estate development and urban construction, the China Business Times reported Thursday.
During a meeting chaired by Chinese Premier Wen Jiabao on Wednesday, the State Council stressed the need to control the rapid development of the real estate industry and urban construction, as the two sectors play an important role in achieving the target, the paper said.
The government will also restrict exports of iron ore and abolish the export tax rebate policies that encouraged businesses to export billet and steel ingot, it said.
Meanwhile, the government will strengthen the coordination and management of industry and further readjust its structure and control production capacity.
The government will also encourage industrial businesses to adjust and change their growth pattern from energy and resource consuming to energy-saving, it said.
The Chinese government plans to cope with rising iron ore prices in the international market by strictly controlling real estate development and urban construction, the China Business Times reported Thursday.
During a meeting chaired by Chinese Premier Wen Jiabao on Wednesday, the State Council stressed the need to control the rapid development of the real estate industry and urban construction, as the two sectors play an important role in achieving the target, the paper said.
The government will also restrict exports of iron ore and abolish the export tax rebate policies that encouraged businesses to export billet and steel ingot, it said.
Meanwhile, the government will strengthen the coordination and management of industry and further readjust its structure and control production capacity.
The government will also encourage industrial businesses to adjust and change their growth pattern from energy and resource consuming to energy-saving, it said.
China's steel output up 23.7 percent in first quarter
People's Daily Online, English Edition
China's steel output climbed by 23.7 percent to 77.7 million tons in the first three months of this year, said an official Saturday in Beijing.
Jia Yinsong, deputy director of the economic operation bureau under the State Development and Reform Commission, said in the first three months, Chinese companies also produced 72.57 million tons of iron, up 27.3 percent, and 82.53 million tons of rolled steel, up 22.4 percent.
The total steel production capacity might reach 322 million tons this year, nearly 50 million or 18.4 percent more than last year, said Jia.
Although the steel sector still takes the lead in the whole secondary industry, steel and iron production is facing increasingly tough conditions as the prices of major raw materialsare rising by a big margin and the supply of coal, electricity and fuel remain tight amid a lack of transportation capacity, he said.
China's steel output climbed by 23.7 percent to 77.7 million tons in the first three months of this year, said an official Saturday in Beijing.
Jia Yinsong, deputy director of the economic operation bureau under the State Development and Reform Commission, said in the first three months, Chinese companies also produced 72.57 million tons of iron, up 27.3 percent, and 82.53 million tons of rolled steel, up 22.4 percent.
The total steel production capacity might reach 322 million tons this year, nearly 50 million or 18.4 percent more than last year, said Jia.
Although the steel sector still takes the lead in the whole secondary industry, steel and iron production is facing increasingly tough conditions as the prices of major raw materialsare rising by a big margin and the supply of coal, electricity and fuel remain tight amid a lack of transportation capacity, he said.
Saturday, April 09, 2005
China to Use 380,000 Tons of Steel to Build Olympic Stadiums
Bloomberg.com: Asia
China will use 380,000 metric tons of steel, or 0.1 percent of its output last year, to build stadiums and gymnasiums for the 2008 Olympic Games in Beijing, the China Iron and Steel Association said on its Web site.
Seven steelmakers [...] have been selected to supply the steel for these building projects.
Beijing slashed construction costs for its 2008 Olympics projects by as much as 6 billion yuan ($725 million) in response to a government clampdown on investments in steel, real estate and other industries aimed at slowing the economy.
Building of the bird's nest-shaped Olympic stadium was halted in August after critics said the design by Swiss architects Jacques Herzog and Pierre de Meuron used too much steel. The stadium was redesigned at the order of Beijing Mayor Wang Qishan, shaving the cost to 2.3 billion yuan from 3.9 billion yuan.
China will use 380,000 metric tons of steel, or 0.1 percent of its output last year, to build stadiums and gymnasiums for the 2008 Olympic Games in Beijing, the China Iron and Steel Association said on its Web site.
Seven steelmakers [...] have been selected to supply the steel for these building projects.
Beijing slashed construction costs for its 2008 Olympics projects by as much as 6 billion yuan ($725 million) in response to a government clampdown on investments in steel, real estate and other industries aimed at slowing the economy.
Building of the bird's nest-shaped Olympic stadium was halted in August after critics said the design by Swiss architects Jacques Herzog and Pierre de Meuron used too much steel. The stadium was redesigned at the order of Beijing Mayor Wang Qishan, shaving the cost to 2.3 billion yuan from 3.9 billion yuan.
AK Steel stock dropped nearly 5 percent following industry report
Dayton Business Journal
The North American average value of flat-rolled carbon steel dropped in March and the market continues to be soft, according to a study released by Meps International Ltd., a steel consultant group.
Meps said in its report that there's little chance of any significant upturn in demand, although improving weather conditions should spur the construction industry to avoid a serious price collapse.
Prices could slip mid-year because of lower consumption from the automobile industry, according to Meps.
Stock prices of other steel companies slipped Friday, with U.S. Steel, Nucor and Steel Dynamics all falling 3 percent.
[You can link to the MEPS web site from our links page ... Michael]
The North American average value of flat-rolled carbon steel dropped in March and the market continues to be soft, according to a study released by Meps International Ltd., a steel consultant group.
Meps said in its report that there's little chance of any significant upturn in demand, although improving weather conditions should spur the construction industry to avoid a serious price collapse.
Prices could slip mid-year because of lower consumption from the automobile industry, according to Meps.
Stock prices of other steel companies slipped Friday, with U.S. Steel, Nucor and Steel Dynamics all falling 3 percent.
[You can link to the MEPS web site from our links page ... Michael]
Thursday, April 07, 2005
Steel Prices
Sometimes a picture is worth a thousand words.
Data courtesy of MEPS.
Cost is in US $. These are mill prices for whole mother coils. Of course we pay more than this because all our steel is precision rolled and slit. But this is what has happened to the mill component of our price.
Data courtesy of MEPS.
Cost is in US $. These are mill prices for whole mother coils. Of course we pay more than this because all our steel is precision rolled and slit. But this is what has happened to the mill component of our price.
Tuesday, April 05, 2005
Steel-making alloy vanadium hits new all-time peak
LONDON (Reuters) - Vanadium hit all-time highs in Europe Monday and the metal, which as an alloy is widely used in steel-making, may be set to extend gains as supply tightens, traders said.
Key producers South Africa and China have less metal available at a time when the steel market is in the midst of a global boom.
Traders said ferro-vanadium had traded as high as $125 a kg, with the market probably around $115/130, up from just below $100 two weeks ago and $60/70 at the beginning of March.
Feedstock vanadium-pentoxide, which gets converted into the alloy, was trading at around $28 a pound.
South Africa is the world's largest producer of vanadium, accounting for around 17,000 tons of world output of some 43,000.
China produces 16,000 tons. But less has been available for export due to its booming steel industry.
Key producers South Africa and China have less metal available at a time when the steel market is in the midst of a global boom.
Traders said ferro-vanadium had traded as high as $125 a kg, with the market probably around $115/130, up from just below $100 two weeks ago and $60/70 at the beginning of March.
Feedstock vanadium-pentoxide, which gets converted into the alloy, was trading at around $28 a pound.
South Africa is the world's largest producer of vanadium, accounting for around 17,000 tons of world output of some 43,000.
China produces 16,000 tons. But less has been available for export due to its booming steel industry.
Monday, April 04, 2005
Critics Say Trade Deficit Argues for U.S. Quitting WTO
Newhouse News Service
WASHINGTON -- The dollar has plunged.
The trade deficit is reaching record highs.
Labor groups complain about losing high-paying jobs to Asia.
The confluence of events has created an opening for those who object to U.S. membership in the World Trade Organization. That membership is subject to the review of Congress every five years and happens to be up for consideration this year.
WTO opponents acknowledge that Congress will almost certainly vote to stay in the organization, which administers trade agreements for its 148 member countries. But they hope to use the platform to spur a broader debate about U.S. trade policies and the efficacy of the WTO.
WASHINGTON -- The dollar has plunged.
The trade deficit is reaching record highs.
Labor groups complain about losing high-paying jobs to Asia.
The confluence of events has created an opening for those who object to U.S. membership in the World Trade Organization. That membership is subject to the review of Congress every five years and happens to be up for consideration this year.
WTO opponents acknowledge that Congress will almost certainly vote to stay in the organization, which administers trade agreements for its 148 member countries. But they hope to use the platform to spur a broader debate about U.S. trade policies and the efficacy of the WTO.
Textile Industry Seeking Job Protection
Yahoo! News
WASHINGTON - Shirts, pants, underwear and a lot of other clothes made abroad have arrived in the United States by the bulging boatload since Jan. 1, when more than three decades of quotas ended.
Consumers are rejoicing over the lower prices. But the domestic textile and apparel industry is complaining about the loss of thousands of jobs from what it contends is unfair competition. It wants the Bush administration to move quickly to limit the soaring number of shipments from China.
'Time is so critical. The amount of goods that China is flooding into this market is so large that only the government can move quickly enough to prevent a lot of textile jobs from being lost,' said Cass Johnson, president of the National Council of Textile Organizations.
According to data released Friday by the Commerce Department, China shipped 84.48 million cotton knit shirts to the United States in the first three months of this year, an increase of 1,258 percent from the same period a year ago. Shipments of 78.99 million cotton trousers represented an increase of 1,521 percent
Just three months after the quotas expired, U.S. manufacturers say the fallout has been swift and severe. Another government report Friday showed the loss of 7,600 textile and apparel jobs, bringing job losses for the industry to 17,200 this year.
In the past three months, 14 textile plants in five states ? North and South Carolina, Pennsylvania, Indiana and Virginia ? have shut down. More could come, industry officials say, without federal action.
'The textile and apparel industry will experience severe job losses in 2005 unless the U.S. government decisively confronts China's predatory trade practices,' said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, an industry group.
Under the terms for China's admission to the World Trade Organization, the United States and other countries have the power to restore the quotas — called government safeguards — should the surge in Chinese shipments prove to be disruptive to the domestic industry.
The quotas would cap growth in categories such as trousers and knit shirts to just 7.5 percent more than shipments of those goods during the previous 12 months.
The industry applied for this protection in 20 different clothing categories last fall.
Retailers, who benefit from lower-cost products, persuaded a court to block the government from considering the request, arguing there was no basis for quotas just because of the threat of higher imports.
WASHINGTON - Shirts, pants, underwear and a lot of other clothes made abroad have arrived in the United States by the bulging boatload since Jan. 1, when more than three decades of quotas ended.
Consumers are rejoicing over the lower prices. But the domestic textile and apparel industry is complaining about the loss of thousands of jobs from what it contends is unfair competition. It wants the Bush administration to move quickly to limit the soaring number of shipments from China.
'Time is so critical. The amount of goods that China is flooding into this market is so large that only the government can move quickly enough to prevent a lot of textile jobs from being lost,' said Cass Johnson, president of the National Council of Textile Organizations.
According to data released Friday by the Commerce Department, China shipped 84.48 million cotton knit shirts to the United States in the first three months of this year, an increase of 1,258 percent from the same period a year ago. Shipments of 78.99 million cotton trousers represented an increase of 1,521 percent
Just three months after the quotas expired, U.S. manufacturers say the fallout has been swift and severe. Another government report Friday showed the loss of 7,600 textile and apparel jobs, bringing job losses for the industry to 17,200 this year.
In the past three months, 14 textile plants in five states ? North and South Carolina, Pennsylvania, Indiana and Virginia ? have shut down. More could come, industry officials say, without federal action.
'The textile and apparel industry will experience severe job losses in 2005 unless the U.S. government decisively confronts China's predatory trade practices,' said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, an industry group.
Under the terms for China's admission to the World Trade Organization, the United States and other countries have the power to restore the quotas — called government safeguards — should the surge in Chinese shipments prove to be disruptive to the domestic industry.
The quotas would cap growth in categories such as trousers and knit shirts to just 7.5 percent more than shipments of those goods during the previous 12 months.
The industry applied for this protection in 20 different clothing categories last fall.
Retailers, who benefit from lower-cost products, persuaded a court to block the government from considering the request, arguing there was no basis for quotas just because of the threat of higher imports.
Stream of Chinese Textile Imports Is Becoming a Flood
The New York Times
Imports of Chinese textile and apparel products into the United States soared in the first quarter, offering fresh evidence that the world's clothing trade is being drastically reshaped by the abolition of global quotas in January.
The United States Commerce Department said Friday that in the first three months of the year, preliminary data showed that United States imports of textile and apparel products from China rose more than 63 percent from a year ago.
In some crucial categories previously governed by the old system of country-by-country quotas, like underwear, cotton trousers and cotton knit shirts, the increases were even more stark - jumps of as much as 2,000 percent.
The figures are certain to heighten trade tensions between the countries and also to renew calls for the United States government to place restrictions on some Chinese imports to protect American manufacturing jobs.
The Bush administration said last week that it was closely monitoring textile and apparel imports from China to better assess the effect on the nation's textile and apparel industry.
Imports of Chinese textile and apparel products into the United States soared in the first quarter, offering fresh evidence that the world's clothing trade is being drastically reshaped by the abolition of global quotas in January.
The United States Commerce Department said Friday that in the first three months of the year, preliminary data showed that United States imports of textile and apparel products from China rose more than 63 percent from a year ago.
In some crucial categories previously governed by the old system of country-by-country quotas, like underwear, cotton trousers and cotton knit shirts, the increases were even more stark - jumps of as much as 2,000 percent.
The figures are certain to heighten trade tensions between the countries and also to renew calls for the United States government to place restrictions on some Chinese imports to protect American manufacturing jobs.
The Bush administration said last week that it was closely monitoring textile and apparel imports from China to better assess the effect on the nation's textile and apparel industry.
Fed-up Chinese steel producers fight BHP
www.mineweb.net
RENO To fight recent and future iron ore price hikes, Chinese officials have ended the export tax rebate policies that encouraged the export of billet and steel.
During an executive meeting of China's State Council last week, Premier Jen Wiabao emphasized the need for strict control of China's economy and improving the country's industry structure to cope with the rising cost of iron ore. As a result, the State Council called for an end to tax rebates on crude steel product exports.
China is the world's largest iron-ore importer with more than 50% of the iron ore used in China coming from imports. The communist party's official mouthpieces, The People's Daily reported Sunday that iron ore imports were 208 million tons in 2004, up 40.5% over 2003. This year iron ore imports are expected to rise as much as 19% to meet the demand for housing and other construction, automobiles and refrigerators. The State Information Center estimated that the cost of China's whole steel industry will increase by at least 2.4 billion to 6 billion this year, or by 20-30% of the industry's 2004 profits, according to The People's Daily.
Sixteen major Chinese steelmakers have formed a iron ore import sub-commission to fight proposed iron ore price increases by Australia's BHP Billiton. Brazil's CVRD and London's Rio Tinto have already hiked iron ore prices 71.5%. BHP has asked for $10 per ton, a $7.50 increase. CVRD, Rio Tinton and BHP control up to 80% of the world's seaborne iron ore trade. BHP has justified its request price increase on the reasoning it is cheaper to ship iron ore from Australia to China than from Brazil to China. BHP Chief Executive Chip Goodyear contends that the landed cost of Australian iron ore is $20 per ton cheaper.
RENO To fight recent and future iron ore price hikes, Chinese officials have ended the export tax rebate policies that encouraged the export of billet and steel.
During an executive meeting of China's State Council last week, Premier Jen Wiabao emphasized the need for strict control of China's economy and improving the country's industry structure to cope with the rising cost of iron ore. As a result, the State Council called for an end to tax rebates on crude steel product exports.
China is the world's largest iron-ore importer with more than 50% of the iron ore used in China coming from imports. The communist party's official mouthpieces, The People's Daily reported Sunday that iron ore imports were 208 million tons in 2004, up 40.5% over 2003. This year iron ore imports are expected to rise as much as 19% to meet the demand for housing and other construction, automobiles and refrigerators. The State Information Center estimated that the cost of China's whole steel industry will increase by at least 2.4 billion to 6 billion this year, or by 20-30% of the industry's 2004 profits, according to The People's Daily.
Sixteen major Chinese steelmakers have formed a iron ore import sub-commission to fight proposed iron ore price increases by Australia's BHP Billiton. Brazil's CVRD and London's Rio Tinto have already hiked iron ore prices 71.5%. BHP has asked for $10 per ton, a $7.50 increase. CVRD, Rio Tinton and BHP control up to 80% of the world's seaborne iron ore trade. BHP has justified its request price increase on the reasoning it is cheaper to ship iron ore from Australia to China than from Brazil to China. BHP Chief Executive Chip Goodyear contends that the landed cost of Australian iron ore is $20 per ton cheaper.
Export tax rebate on steel billet abolished
[This is good news, I think ... but I'm not sure of all of the ramifications yet.]
People's Daily Online
China has nullified a 13% export tax rebates on steel billet from April 1st. Insiders believe that this measure will slow down China's large volume of iron ore imports.
China has seen rapid growth of its steel and iron output in recent years, increasing import dependency on ore sharply, up to 50%.
On Mar. 28th, Nippon Steel Corporation, a Japanese steel giant, signed a supply deal with world's largest iron ore supplier, Brazil CVRD, which included a 71.5% hike in ore prices.
Baosteel Group, representative of China's steel plants to the negotiation, was forced to accept this bad news. Insiders predict that these price hikes will cost the development of China's steel industry another RMB.3 billion, and domestic iron ore will undoubtedly see great demand.
Experts believe that the significant effect of the export rebate exemption will be to alleviate the tight domestic supply of iron ore, thus restricting large-scale domestic import to some extent.
Most of this iron ore is exported to foreign countries as low-end products after a process of high energy consuming and polluting manufacture.
People's Daily Online
China has nullified a 13% export tax rebates on steel billet from April 1st. Insiders believe that this measure will slow down China's large volume of iron ore imports.
China has seen rapid growth of its steel and iron output in recent years, increasing import dependency on ore sharply, up to 50%.
On Mar. 28th, Nippon Steel Corporation, a Japanese steel giant, signed a supply deal with world's largest iron ore supplier, Brazil CVRD, which included a 71.5% hike in ore prices.
Baosteel Group, representative of China's steel plants to the negotiation, was forced to accept this bad news. Insiders predict that these price hikes will cost the development of China's steel industry another RMB.3 billion, and domestic iron ore will undoubtedly see great demand.
Experts believe that the significant effect of the export rebate exemption will be to alleviate the tight domestic supply of iron ore, thus restricting large-scale domestic import to some extent.
Most of this iron ore is exported to foreign countries as low-end products after a process of high energy consuming and polluting manufacture.
Saturday, April 02, 2005
Aluminum Maker Exits Chapter 11
Yahoo! News
COLUMBUS, Ohio - Aluminum maker Ormet Corp. announced Friday it emerged from bankruptcy, giving the company approval to sharply increase retirees' health insurance costs to save money the company says it needs to survive.
Ormet has said it needs $5 million in savings from its projected $15 million in 2005 retiree health costs. That is a portion of a total $23 million in savings the company has said it needs.
The company, based in Wheeling, W. Va., has about 2,200 employees and operations in Ohio, West Virginia, Indiana and Louisiana.
COLUMBUS, Ohio - Aluminum maker Ormet Corp. announced Friday it emerged from bankruptcy, giving the company approval to sharply increase retirees' health insurance costs to save money the company says it needs to survive.
Ormet has said it needs $5 million in savings from its projected $15 million in 2005 retiree health costs. That is a portion of a total $23 million in savings the company has said it needs.
The company, based in Wheeling, W. Va., has about 2,200 employees and operations in Ohio, West Virginia, Indiana and Louisiana.
Friday, April 01, 2005
EU eyes sanctions in anti-dumping row with US
EUbusiness
the European Commission called for an extra duty of 15 percent to be imposed on products ranging from paper to farm and textile products, in response to Washington's failure to repeal the so-called Byrd Amendment.
'The Commission took this latest step in the dispute over the Byrd Amendment in light of the continuing failure of the United States to bring its legislation in conformity with its international obligations,' it said.
The proposed sanctions, if approved by the EU's 25 member states, would come into effect from May 1.
In Washington, US authorities lamented the EU decision, and vowed to continue efforts to persuade Congress to repeal the law.
'We're disappointed that this step is being taken,' US Trade Representative spokesman Richard Mills said, but added: 'The United States is working to comply with the WTO decision regarding the Byrd Amendment.'
the European Commission called for an extra duty of 15 percent to be imposed on products ranging from paper to farm and textile products, in response to Washington's failure to repeal the so-called Byrd Amendment.
'The Commission took this latest step in the dispute over the Byrd Amendment in light of the continuing failure of the United States to bring its legislation in conformity with its international obligations,' it said.
The proposed sanctions, if approved by the EU's 25 member states, would come into effect from May 1.
In Washington, US authorities lamented the EU decision, and vowed to continue efforts to persuade Congress to repeal the law.
'We're disappointed that this step is being taken,' US Trade Representative spokesman Richard Mills said, but added: 'The United States is working to comply with the WTO decision regarding the Byrd Amendment.'
It's time to revisit the Byrd Amendment
You remember the Byrd Amendment, right? In November, I wrote:
The Byrd ammendment "overcompensates" for any adjudicated trade imbalances ("dumping"). Since the awards are set so that import duties will fully correct the imbalance, the awards are quite large and the WTO sees the situation as already corrected. Since, in the US, the awards flow to the reporting company, it is rewarded twice, once when the tarifs do their job and fully correct the imbalance, and once again when all that reward money becomes a bonanza for the reporting company.
This creates 2 trade problems - not just the overcompensation but also the dogged determination of some companies to keep appealing forever even when they have a weak case, because the chance that they might win on appeal (or just wearing down the other side) carries such a large monetary award.
An interesting historical tidbit, which I only recently discovered (thanks to CATO):
The legislation was surreptitiously inserted into the agriculture appropriations bill in 2000 by Sen. Robert Byrd after it failed to win support from the congressional committees that have expertise and oversight on trade issues. President Clinton strenuously objected to the amendment, but could only have killed it by vetoing the entire appropriations bill. Instead, he signed the law and implored Congress to repeal the amendment, knowing full well -- as the trade committees and Sen. Byrd did -- that it was contrary to U.S. WTO commitments.
They go on to explain some of the insidious ways this bill works:
By compensating petitioners and supporters of petitions, the Byrd Amendment provides an additional financial incentive to file antidumping and countervailing duty cases. Furthermore, by excluding from compensation those companies that do not support the petitions, the law encourages them to change their positions simply to maintain eligibility for compensation.
The man, himself, Robert Byrd, isn't universally loved. In fact, the Citizens Against Government Waste web site has a page dedicated to him calling him The King of Pork.
In 2001, Senator Robert C. Byrd managed to claw $232 million in pork for West Virginia, or $128 for every single resident, using his privileged position as ranking chairman of the Appropriations Committee.
In fact, he's proud of it ... "One man's pork is another man's job. Pork has been good investment in West Virginia. You can look around and see what I've done."
In an interview with George magazine about loan guarantees for steel companies, Sen. Byrd claimed that "he has no apologies to make" to the American people for the more than $1 billion in taxpayer money he has wasted.
Perhaps a more serious issue is that Byrd seems to have been a prominent member of the KKK back in the day ...
Granddad was approached by the local Klan Recruiter to join the Klan. The recruiter at that time was none other than a young, well-liked politician that would later be known as Senator Robert Byrd. He was serving in the WV House of Delegates at that time and was already seen by many as an aggressive politician with a future.
At first Granddad told him to get lost. Granddad was very apolitical, but more importantly he employed a number of Blacks in his mills and as loggers. These were all very dangerous jobs, and dissention in the workplace was dangerous for all involved.
However strange things started happening in his business relations after refusing Byrd's overtures to join the KKK. School contracts vanished. Local unions refused to allow granddads trucks access to rail facilities. Mine surveyors started grading his logs as substandard for mine materials.
Soon he got the picture. The Klan took care of its own and the only way to stay in business was to join up. So he did. He paid the joining fee ($25) and attended a couple of "Halloween Parties" as he called them. Just a bunch of guys in sheets drinking beer and discussing business. Kind of like a Rotary Club in hoods.
After joining his business got much better. School contracts were suddenly available. No more union issues, and loads of mine headers that had been rejected last week were suddenly acceptable. [...]
Byrd encouraged these outings, but NEVER particiapted. He was management, the mailbox bashers were workers. He never wanted to be part of the latter.
More KKK stuff here.
In any case, back to the Amendment. In December 2004, the WTO gave Canada and the UN permission to apply sanctions against the US for continued utilization of the Byrd Amendment, contrary to the WTO. I wrote about it on December 22nd of last year.
First, lets look at some interesting statistics:
The Shrimp Industry: According to CITAC,
The trade petitions filed against shrimp imports from six developing nations were filed by a small segment of the domestic shrimp industry in order to receive millions of dollars in special interest taxes. A conservative estimate is that annual payouts will equal $180 million or nearly $829,493 per company.
As Ella used to sing, nice work if you can get it!
Also according to CITAC,
the two largest sectors beneficiaries of this largese in 2004 were Steel containing products ($80 million US) and steel products (the latter being raw and semi finished steel goods not yet ready for final use, i.e. steel bar, steel sheet, steel plate, etc) ($58 million US)
Total Byrd Amendment Disbursements to Date
Fiscal Year 2004 $284,124,933
Fiscal Year 2003 $190,247,425
Fiscal Year 2002 $329,871,464
Fiscal Year 2001 $231,201,891
Top Companies in 2004:
$52,673,229 The Timken Company Bearings
$26,225,555 Lancaster Colony Corp. Candles
$13,190,858 MPB Corporation Bearings
$11,959,014 Micron Technology DRAMS
$11,644,319 Emerson Power Transmission Corp. Bearings
$10,374,465 International Steel Group Steel products
$ 8,424,904 Home Fragrance Holdings Candles
$ 7,885,970 Wellman Polyester staple fibers
$ 7,123,402 United States Steel Corp. Steel products
$ 6,835,892 AK Steel Steel products
We're not talking chump change here, guys.
And there are some amusing ironies. According to the Rushford Report
when the U.S. Customs Service released its Notice of Intent to distribute antidumping tariffs that were actually collected in fiscal year 2001, look who the big winners were.
A whopping $24.3 million out of $28.8 million in dumping tariffs will be divided between mostly Japanese television makers who have set up operations in the United States, including Matsushita, Hitachi, Sanyo, Mitsubishi Electric, NEC, Sharp, and Toshiba. Only two names clearly recognizable as American get to share in the spoils: Montgomery Ward and Zenith Electronics.
What sweet irony. Japanese television makers moved production to this country to get around U.S. anti-dumping petitions against Japan. Now they are raking in antidumping tariffs assessed against other foreigners who came later, like the Koreans and Taiwanese.
A web site called eBearing has a nice chronology of the bill.
The Fabricator and a number of other web sites write about a bill that would repeal the Byrd Amendment.
CITAC Renews Call for Congress to Repeal Byrd Amendment After Canada and European Union Announce Retaliatory Tariffs Beginning May 1
beginning May 1, 2005, the EU will impose a 15% duty on various types of paper, clothing fabrics, footwear, and machinery -- amounting to tariffs worth approximately $28 million, and Canada will impose like duties on cigarettes, oysters and live swine worth $14 million because of the failure of Congress to repeal the WTO- illegal Byrd Amendment. Both governments will review the products each year against the fluctuating nature of Byrd disbursements.
In a statement, Canada's International Trade Minister Jim Peterson said, "For the last four years, Canada and a number of other countries have repeatedly urged the United States to repeal the Byrd Amendment. Retaliation is not our preferred option, but it is a necessary action. International trade rules must be respected."
Forbes wrote: Bye Bye Byrdie?
Opposition to Byrd is growing louder. The Bush Administration has called for repeal. And companies that import goods subject to these duties have banded together to fight for repeal.
Here's the official Canadian retaliation notice:
March 31, 2005
The Government of Canada announced today that it will retaliate against the United States in light of its failure to comply with the World Trade Organization (WTO) ruling on the Byrd Amendment. Following extensive consultations with domestic stakeholders, Canada will impose a 15 percent surtax on U.S. live swine, cigarettes, oysters and certain specialty fish, starting May 1, 2005.
Some people are starting to react ...
Byrd law jeopardizes state economy
Amendment must be repealed before Wisconsin loses foreign trade
Wisconsin businesses could stand to lose a considerable share of the more than $6 billion in annual trade with our biggest international customer - Canada - and other key trading partners unless Congress takes action to correct a serious defect in U.S. trade law.
Canada slaps rare sanctions on U.S.
Ottawa — Canada has turned up the pressure on its largest trading partner, slapping rarely used sanctions on the United States to force an end to an internationally condemned trade law.
The stakes are high: if Ottawa fails in this fight against the U.S. law known as the Byrd amendment, Canadian softwood lumber producers stand to lose more than $4 billion in duties paid so far in the longrunning trade dispute.
Even worse, the Byrd amendment would then hand all those Canadian payments over to their American lumber competitors.
To pressure Washington, Ottawa announced Thursday it will slap a 15 per cent surtax on cigarettes, oysters, live swine and some fish imports from the U.S., effective May 1.
The Washington Post said much of the same thing, but added near the end of the article:
Richard Gutting, an international trade attorney who has worked on oyster-related issues, said it appears that this might be just the "first wave" of sanctions.
The Byrd ammendment "overcompensates" for any adjudicated trade imbalances ("dumping"). Since the awards are set so that import duties will fully correct the imbalance, the awards are quite large and the WTO sees the situation as already corrected. Since, in the US, the awards flow to the reporting company, it is rewarded twice, once when the tarifs do their job and fully correct the imbalance, and once again when all that reward money becomes a bonanza for the reporting company.
This creates 2 trade problems - not just the overcompensation but also the dogged determination of some companies to keep appealing forever even when they have a weak case, because the chance that they might win on appeal (or just wearing down the other side) carries such a large monetary award.
An interesting historical tidbit, which I only recently discovered (thanks to CATO):
The legislation was surreptitiously inserted into the agriculture appropriations bill in 2000 by Sen. Robert Byrd after it failed to win support from the congressional committees that have expertise and oversight on trade issues. President Clinton strenuously objected to the amendment, but could only have killed it by vetoing the entire appropriations bill. Instead, he signed the law and implored Congress to repeal the amendment, knowing full well -- as the trade committees and Sen. Byrd did -- that it was contrary to U.S. WTO commitments.
They go on to explain some of the insidious ways this bill works:
By compensating petitioners and supporters of petitions, the Byrd Amendment provides an additional financial incentive to file antidumping and countervailing duty cases. Furthermore, by excluding from compensation those companies that do not support the petitions, the law encourages them to change their positions simply to maintain eligibility for compensation.
The man, himself, Robert Byrd, isn't universally loved. In fact, the Citizens Against Government Waste web site has a page dedicated to him calling him The King of Pork.
In 2001, Senator Robert C. Byrd managed to claw $232 million in pork for West Virginia, or $128 for every single resident, using his privileged position as ranking chairman of the Appropriations Committee.
In fact, he's proud of it ... "One man's pork is another man's job. Pork has been good investment in West Virginia. You can look around and see what I've done."
In an interview with George magazine about loan guarantees for steel companies, Sen. Byrd claimed that "he has no apologies to make" to the American people for the more than $1 billion in taxpayer money he has wasted.
Perhaps a more serious issue is that Byrd seems to have been a prominent member of the KKK back in the day ...
Granddad was approached by the local Klan Recruiter to join the Klan. The recruiter at that time was none other than a young, well-liked politician that would later be known as Senator Robert Byrd. He was serving in the WV House of Delegates at that time and was already seen by many as an aggressive politician with a future.
At first Granddad told him to get lost. Granddad was very apolitical, but more importantly he employed a number of Blacks in his mills and as loggers. These were all very dangerous jobs, and dissention in the workplace was dangerous for all involved.
However strange things started happening in his business relations after refusing Byrd's overtures to join the KKK. School contracts vanished. Local unions refused to allow granddads trucks access to rail facilities. Mine surveyors started grading his logs as substandard for mine materials.
Soon he got the picture. The Klan took care of its own and the only way to stay in business was to join up. So he did. He paid the joining fee ($25) and attended a couple of "Halloween Parties" as he called them. Just a bunch of guys in sheets drinking beer and discussing business. Kind of like a Rotary Club in hoods.
After joining his business got much better. School contracts were suddenly available. No more union issues, and loads of mine headers that had been rejected last week were suddenly acceptable. [...]
Byrd encouraged these outings, but NEVER particiapted. He was management, the mailbox bashers were workers. He never wanted to be part of the latter.
More KKK stuff here.
In any case, back to the Amendment. In December 2004, the WTO gave Canada and the UN permission to apply sanctions against the US for continued utilization of the Byrd Amendment, contrary to the WTO. I wrote about it on December 22nd of last year.
First, lets look at some interesting statistics:
The Shrimp Industry: According to CITAC,
The trade petitions filed against shrimp imports from six developing nations were filed by a small segment of the domestic shrimp industry in order to receive millions of dollars in special interest taxes. A conservative estimate is that annual payouts will equal $180 million or nearly $829,493 per company.
As Ella used to sing, nice work if you can get it!
Also according to CITAC,
the two largest sectors beneficiaries of this largese in 2004 were Steel containing products ($80 million US) and steel products (the latter being raw and semi finished steel goods not yet ready for final use, i.e. steel bar, steel sheet, steel plate, etc) ($58 million US)
Total Byrd Amendment Disbursements to Date
Fiscal Year 2004 $284,124,933
Fiscal Year 2003 $190,247,425
Fiscal Year 2002 $329,871,464
Fiscal Year 2001 $231,201,891
Top Companies in 2004:
$52,673,229 The Timken Company Bearings
$26,225,555 Lancaster Colony Corp. Candles
$13,190,858 MPB Corporation Bearings
$11,959,014 Micron Technology DRAMS
$11,644,319 Emerson Power Transmission Corp. Bearings
$10,374,465 International Steel Group Steel products
$ 8,424,904 Home Fragrance Holdings Candles
$ 7,885,970 Wellman Polyester staple fibers
$ 7,123,402 United States Steel Corp. Steel products
$ 6,835,892 AK Steel Steel products
We're not talking chump change here, guys.
And there are some amusing ironies. According to the Rushford Report
when the U.S. Customs Service released its Notice of Intent to distribute antidumping tariffs that were actually collected in fiscal year 2001, look who the big winners were.
A whopping $24.3 million out of $28.8 million in dumping tariffs will be divided between mostly Japanese television makers who have set up operations in the United States, including Matsushita, Hitachi, Sanyo, Mitsubishi Electric, NEC, Sharp, and Toshiba. Only two names clearly recognizable as American get to share in the spoils: Montgomery Ward and Zenith Electronics.
What sweet irony. Japanese television makers moved production to this country to get around U.S. anti-dumping petitions against Japan. Now they are raking in antidumping tariffs assessed against other foreigners who came later, like the Koreans and Taiwanese.
A web site called eBearing has a nice chronology of the bill.
The Fabricator and a number of other web sites write about a bill that would repeal the Byrd Amendment.
CITAC Renews Call for Congress to Repeal Byrd Amendment After Canada and European Union Announce Retaliatory Tariffs Beginning May 1
beginning May 1, 2005, the EU will impose a 15% duty on various types of paper, clothing fabrics, footwear, and machinery -- amounting to tariffs worth approximately $28 million, and Canada will impose like duties on cigarettes, oysters and live swine worth $14 million because of the failure of Congress to repeal the WTO- illegal Byrd Amendment. Both governments will review the products each year against the fluctuating nature of Byrd disbursements.
In a statement, Canada's International Trade Minister Jim Peterson said, "For the last four years, Canada and a number of other countries have repeatedly urged the United States to repeal the Byrd Amendment. Retaliation is not our preferred option, but it is a necessary action. International trade rules must be respected."
Forbes wrote: Bye Bye Byrdie?
Opposition to Byrd is growing louder. The Bush Administration has called for repeal. And companies that import goods subject to these duties have banded together to fight for repeal.
Here's the official Canadian retaliation notice:
March 31, 2005
The Government of Canada announced today that it will retaliate against the United States in light of its failure to comply with the World Trade Organization (WTO) ruling on the Byrd Amendment. Following extensive consultations with domestic stakeholders, Canada will impose a 15 percent surtax on U.S. live swine, cigarettes, oysters and certain specialty fish, starting May 1, 2005.
Some people are starting to react ...
Byrd law jeopardizes state economy
Amendment must be repealed before Wisconsin loses foreign trade
Wisconsin businesses could stand to lose a considerable share of the more than $6 billion in annual trade with our biggest international customer - Canada - and other key trading partners unless Congress takes action to correct a serious defect in U.S. trade law.
Canada slaps rare sanctions on U.S.
Ottawa — Canada has turned up the pressure on its largest trading partner, slapping rarely used sanctions on the United States to force an end to an internationally condemned trade law.
The stakes are high: if Ottawa fails in this fight against the U.S. law known as the Byrd amendment, Canadian softwood lumber producers stand to lose more than $4 billion in duties paid so far in the longrunning trade dispute.
Even worse, the Byrd amendment would then hand all those Canadian payments over to their American lumber competitors.
To pressure Washington, Ottawa announced Thursday it will slap a 15 per cent surtax on cigarettes, oysters, live swine and some fish imports from the U.S., effective May 1.
The Washington Post said much of the same thing, but added near the end of the article:
Richard Gutting, an international trade attorney who has worked on oyster-related issues, said it appears that this might be just the "first wave" of sanctions.
Design Guidelines For Precision Metal Stampings and Fabrications
And now a little plug for our professional organization ...
We are members of the PMA, the Precision Metalforming Association
They put out a little book, called Design Guidelines. In some ways it might be the most useful book they've done. It attempts to condense into a short book the most interesting things a designer needs to know when designing a part that will eventually be stamped out of metal. Most designers design in a variety of materials today, including plastics, wood, fabrics, and metal. Keeping all the different characteristics of these materials straight is a major task. This book simplifies it (and states it in terms your metal stamper will understand). Not a week goes by that I don't refer to the well worn copy on my desk. In fact, I have another copy at home.
Over a year ago, the PMA started work on the third edition. And now it's out. We think it's a great resource, not the least of all because our own John Wagner from Hamond was one of the contributing authors. Also, reflecting the times, it's available on CD ROM. Here's their description of it:
Design Guidelines Third Edition has been updated to reflect today's best manufacturing practices and industry advancements. This edition focuses on practical advice and cost-effective solutions for professionals who design, specify and source precision stamped, fabricated and formed metal component parts.
Nearly every aspect of metalforming is covered in 19 information-filled chapters and a glossary of 500 common metalforming terms. Critical design concepts and techniques are illustrated with drawings, diagrams and photos. New fineblanking and water-jet cutting sections make this edition the most comprehensive yet.
We are members of the PMA, the Precision Metalforming Association
They put out a little book, called Design Guidelines. In some ways it might be the most useful book they've done. It attempts to condense into a short book the most interesting things a designer needs to know when designing a part that will eventually be stamped out of metal. Most designers design in a variety of materials today, including plastics, wood, fabrics, and metal. Keeping all the different characteristics of these materials straight is a major task. This book simplifies it (and states it in terms your metal stamper will understand). Not a week goes by that I don't refer to the well worn copy on my desk. In fact, I have another copy at home.
Over a year ago, the PMA started work on the third edition. And now it's out. We think it's a great resource, not the least of all because our own John Wagner from Hamond was one of the contributing authors. Also, reflecting the times, it's available on CD ROM. Here's their description of it:
Design Guidelines Third Edition has been updated to reflect today's best manufacturing practices and industry advancements. This edition focuses on practical advice and cost-effective solutions for professionals who design, specify and source precision stamped, fabricated and formed metal component parts.
Nearly every aspect of metalforming is covered in 19 information-filled chapters and a glossary of 500 common metalforming terms. Critical design concepts and techniques are illustrated with drawings, diagrams and photos. New fineblanking and water-jet cutting sections make this edition the most comprehensive yet.
Nathanael V. Davis - Former Alcan President, CEO, And Chairman - Dies At 90
Alcan Inc.
Montreal, Canada Alcan Inc. regretfully announced today that Nathanael Vining Davis, who served the Company for more than 39 years, has died. Mr. Davis was Alcan President and Chief Executive Officer from 1947-1979 and Chairman of the Board from 1972-1986. He was 90 years old.
'Nathanael V. Davis lived and loved Alcan his entire life. His outstanding leadership and deep commitment to values - values which he expressed with poise and humility - have forever embedded his humanity into Alcan,' said Travis Engen, President and Chief Executive Officer of Alcan Inc. 'Today, we have not only lost a leader, but a true friend. He will be sorely missed,' he said.
In 1947, the then 32-year-old Mr. Davis succeeded his father, Edward K. Davis, as one of the youngest chief executives to run a company the size of Alcan. For 32 years, Mr. Davis shouldered the responsibility for an organization that has grown into a world aluminum leader. Mr. Davis spearheaded the Company's international expansion, and it was under his leadership that Alcan experienced its most rapid period of growth.
Montreal, Canada Alcan Inc. regretfully announced today that Nathanael Vining Davis, who served the Company for more than 39 years, has died. Mr. Davis was Alcan President and Chief Executive Officer from 1947-1979 and Chairman of the Board from 1972-1986. He was 90 years old.
'Nathanael V. Davis lived and loved Alcan his entire life. His outstanding leadership and deep commitment to values - values which he expressed with poise and humility - have forever embedded his humanity into Alcan,' said Travis Engen, President and Chief Executive Officer of Alcan Inc. 'Today, we have not only lost a leader, but a true friend. He will be sorely missed,' he said.
In 1947, the then 32-year-old Mr. Davis succeeded his father, Edward K. Davis, as one of the youngest chief executives to run a company the size of Alcan. For 32 years, Mr. Davis shouldered the responsibility for an organization that has grown into a world aluminum leader. Mr. Davis spearheaded the Company's international expansion, and it was under his leadership that Alcan experienced its most rapid period of growth.
