| May
2005 Association News |
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SDI’s
Nolan: China Situation Urgent And
the situation is urgent, asserted John Nolan, SDI’s vice president
and manager of sales and marketing, in comments submitted during
the committee’s hearing on “United States-China Economic
Relations and China’s Role in the World Economy.” Nolan
contends the undervaluation of the yuan acts both as a subsidy for
Chinese exports to the United States and other countries and as
a hidden duty on U.S. products that would be imported into China.
He
voices support for two pieces of legislation that identify exchange-rate
issues as international trade issues and contend that China’s
undervaluation of the yuan by about 40 percent is inconsistent with
its obligations as a member of the World Trade Organization. The
Chinese Currency Act of 2005, introduced April 6 as H.R. 1498, would
amend the U.S. countervailing duty statute and the China-specific
market-disruption statute to enable U.S. industries and workers
to pursue relief against subsidized, injurious imports into the
United States from China. The bill also prohibits the Secretary
of Defense from procuring Chinese-origin products if the secretary
determines that U.S.-made products like the imports from China are
critical to the U.S. defense industrial base. A
second bill, The Stopping Overseas Subsidies Act, introduced March
10 as H.R. 1216, would clarify that the U.S. countervailing duty
statute applies to imports from nonmarket-economy countries. Both
bills have been carefully drafted to be WTO-consistent. The
SOS Act and Chinese Currency Act also have the support of the American
Iron and Steel Institute and Steel Manufacturers Association. SDI
is a member of both groups. 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. MSCI In
aluminum products, U.S. members shipped 297,400 tons during the
first quarter, 8.4 percent higher than during the first three months
of 2004. March aluminum shipments of 109,500 tons were 6.2 percent
above March 2004, and 17.4 percent above February 2005. Steel
inventories among U.S. members totaled 15,638,100 tons during March,
21.3 percent higher than in March 2004, but 1 percent below February
2005. Aluminum inventories of 364,500 tons among U.S. members were
22 percent higher than in March 2004, and 1.8 percent higher than
in February 2005. In
Canada, MSCI members shipped 1,394,400 tons of steel in the first
quarter, down 8.2 percent from the first three months of 2004. March
steel shipments of 499,800 tons were 9.9 percent below March 2004,
but increased 10.7 percent over the February 2005 total. In
aluminum products, Canadian members shipped 28,500 tons during the
first quarter, a 2.5 percent increase from the first quarter of
2004. March shipments of 10,300 tons dipped 1.9 percent below March
2004, but increased 13.2 percent over aluminum shipped in February
2005. Steel
inventories among Canadian members totaled 1,346,500 tons in March,
jumping 23.9 percent above the steel inventories they held in March
2004, but 1.1 percent below February 2005 inventories. The months on hand rate for steel inventories during March was 3.1 in the U.S. and 2.7 in Canada—for both countries, the lowest rate this year. The months on hand rate for aluminum inventories during March was 3.3 in the U.S. and 3.1 in Canada—again the lowest rate this year for both. AISI Comparing
two-month data for 2005 vs. 2004, imports of hot-rolled sheet increased
by 36 percent. Other substantial increases were in hot-dip galvanized
sheet and strip (up 124 percent), plates in coil (up 100 percent),
all other metallic coated sheet and strip (up 100 percent), cold-rolled
sheet (up 90 percent), tin plate (up 63 percent), structural pipe
and tubing (up 45 percent), oil country tubular goods (up 44 percent)
and cold-finished bar (up 39 percent). Meanwhile, U.S. spot prices for hot- and cold-rolled sheet in February declined for the fifth month in a row, according to Purchasing magazine. The September 2004 through February 2005 price declines for these products were 17.7 and 12.2 percent, respectively. IISI China
produced 27.5 million metric tons of crude steel in March, up 24.1
percent vs. a year ago. Total production for the Asian region was
46 million metric tons, or 15.2 percent above March 2004. Asian
crude steel production was 131.1 million metric tons for the first
quarter of 2005, a rise of 13.8 percent compared to the first three
months of 2004. Production
in the 25 countries of the European Union was 16.4 million metric
tons in March. Crude steel production in Italy grew by 6.3 percent
to 2.6 million tons in March. Total production in the EU-25 for
the first quarter of 2005 was 48.0 million tons, 0.3% lower than
for the same period in 2004. In North America, production stood at 11 million metric tons in March, down 3.1 percent from March 2004. First-quarter 2005 production was 32.4 million tons, up 0.3 percent compared to the first quarter of 2004. CBSA Total
warehouse shipments in March declined 12.4 percent from a year earlier,
but increased 8 percent over February’s level. March copper
shipments were up 8.1 percent from February and alloy shipments
were up 7.8 percent from February. However,
as March had two more shipping days than February, the average daily
rate of shipments was down 12.4 percent from the month earlier.
The daily shipping rate was off 1.8 percent from March 2004. Bruce
V. Seeger, president of Seeger Metals & Plastics, Toledo, Ohio,
was Named
CBSA vice president, also for a second one-year term, was Denis
Brady, president of Nonferrous Products Inc., Franklin, Ind. Re-elected
as CBSA treasurer was Dan Erck, president of the Industrial Metals
Division of Cambridge-Lee Industries Inc., Reading, Pa. Elected
to his fourth term as CBSA’s secretary was William G. Sabol,
president of Copper and Brass Sales, Southfield, Mich. In addition, three executives were elected to three-year terms as association directors: Jerry Simms, vice president of Atlas Metal Sales, Denver, who was already serving on the board; Scott Kraft, director of corporate purchasing at Alro Steel Corp., Jackson, Mich.; and Haim Kotler, president of Peckover’s, Concord, Ontario, Canada. ISM
While
89 percent of survey respondents said in March that they expect
their order backlogs to increase over the next three months, and
61 percent said they are operating at or above their most efficient
levels of operation, current shipments are the same or above three
months earlier for only half of the respondents. This compares with
61 percent in the February survey. Inventories
are still rising with only 18 percent reporting that their current
receipts surpass their shipments. Receipts are expected to increase,
or remain the same, vs. current levels for 75 percent of those surveyed.
This is up from 58 percent in February. There
is an uptick among those who plan to increase their inventories
during the next six months (from 5 percent in January to 18 percent
in March), and a decrease in the number of buyers who plan to reduce
inventories (from 63 percent in January to 50 percent in March). Buyers
with inventory positions greater than two months of current shipments
moved back up to 32 percent in March, but half of respondents still
consider their inventory position too high. More than half reported
that inventory levels were more than 10 percent above what they
held in March 2004. Selling
prices, survey respondents indicate, have moderated with 79 percent
saying selling prices are firm or competitive, down from 87 percent
who felt that way in February. The data shows an upswing in optimism. Those planning to buy or build new manufacturing facilities moved up to 46 percent in March, the highest level over the last 12 months. PMA When
asked to predict the general trend in economic activity for the
next three months, 35 percent of respondents said they anticipate
business conditions will improve (down from 43 percent in March),
51 percent said activity will remain unchanged (compared to 47 percent
in March) and 14 percent predicted a decrease (up from 10 percent
in March). Metal
formers also expected a decline in incoming orders through June.
About 36 percent of companies said orders will rise (down from 48
percent in March), 44 percent expected no change (compared to 36
percent in March) and 20 percent forecast a decline in orders (up
from 16 percent in March). This may reflect their anticipation of
the typical seasonal slowdown as summer approaches. Average daily shipping levels did improve slightly. Fifty-three percent of surveyed companies said their shipping levels were above those of three months ago (compared to 48 percent in March), 31 percent reported no change (down from 35 percent in March) and 16 percent indicated that April shipping levels are below levels of three months ago (compared to 17 percent in March). AEM/FEMA/NAEDA “The
steel problems our industry currently faces are the result of a
perfect storm of issues. The boom in China, the lack of raw materials,
a weak U.S. dollar, and the 2002 Section 201 steel tariffs have
all combined to greatly strain the steel industry,” association
spokesmen said. “By working together on a study such as this,
we hope to answer many of the questions our membership has and provide
a better understanding of the issue for our machinery customers
and our nation’s policymakers.” The
study cites several principal reasons for the rapid increase in
steel prices. As expected, the most important factor identified
was explosive growth in the Chinese steel industry that strained
global supply and lifted prices worldwide for steelmaking raw materials.
Another factor the study singled out was a decline in steel prices
over the two previous decades that led to U.S. under-investment
in mill maintenance and new mines/facilities for raw materials. The
depreciation of the U.S. dollar, tariffs on imported steel, increased
prices for scrap and stronger industrial production in the U.S.,
Europe and Japan were also cited. Those interested in reading the report may visit www.aem.org. Briefs In response to OECD documents on the Steel Subsidy Agreement, released March 31, the leader of the American Institute for International Steel in Washington, D.C., says the compromise approach represents a positive set of proposals. “We applaud the OECD staff and others who were involved in its development,” AIIS President David Phelps says. “We concur with the sentiment in OECD Deputy Secretary-General Schlögl’s letter that to get negotiations back on track ‘will require all parties to make some compromises.’ We hope this encouraging set of proposals will be the basis of a renewed, and ultimately successful, effort.” The Steel Recycling Institute reports that the recycling rate for steel in the U.S. and globally remained at 70.7 percent last year, yet the total volume of recycled steel grew in excess of 7.2 million tons. “Over 76 million tons of scrap steel was recycled in 2004, the most seen in the United States in over 25 years,” says SRI President Bill Heenan. “More importantly, the composition of the tons recycled in 2004 contained almost 35 percent more obsolete scrap than in 1980,” he says. “Because the steel industry has become a more efficient consumer of raw materials, it has increased the demand for post-consumer scrap, and the scrap industry continues to deliver end of life steel-intensive manufactured goods back to the mills to be reborn into new products.” The Fabricators & Manufacturers Association, International, has released its “2004 Metal Forming & Fabricating Industry Salary and Benefits Survey for Executives and Professionals.” The survey reports detailed base salary statistics on 33 positions within the industry. It covers 261 companies and more than 3,050 employees. People |
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