| August 2006 Association News |
Report Decries Chinese Subsidies, “This report has confirmed what countless U.S. employers have been telling the administration for years: until we create a level playing field for America’s manufacturing base, domestic producers will continue to struggle in a market manipulated by China,” says U.S. Rep. Phil English (R-Pa.), a member of the House Ways and Means Trade Subcommittee. With the U.S.-China trade deficit setting new records monthly, Washington continues to turn a blind eye, failing to provide U.S. employers with the necessary tool to police the market from illegally subsidized Chinese imports—specifically the application of countervailing duties against non-market economies, English says. “The House has already decisively acted on comprehensive legislation to directly force the issue. Until China’s mercantilist trade policy is dealt with head-on and U.S. employers have the tools they need to fight Chinese subsidies, much of the trade agenda will be in limbo,” he adds. Last year, the House passed English’s bill, H.R. 3283, the U.S. Trade Rights Enforcement Act, by a vote of 255-168. The measure is currently pending before the Senate. In other action on the Chinese trade front, the China Currency Coalition—a multi-industry alliance supporting U.S. manufacturing—endorsed a vote by the International Economic Policy Committee of the National Association of Manufacturers to back H.R. 1498, a bipartisan bill that would define persistent currency undervaluation by any trading partner as a prohibited export subsidy actionable under the countervailing duty law. “This welcome development by a solid majority is a big step forward,” says David A. Hartquist, counsel to the China Currency Coalition. “We are very encouraged and hope that NAM’s board will promptly ratify this vote. Every week that goes by without substantial revaluation of China’s currency compounds the injury to U.S. producers.” The yuan’s undervaluation subsidizes imports from China into the United States and effectively acts as a tax on exports to China from the United States. The coalition has long considered correction of the yuan’s persistent undervaluation as the linchpin of a broader realignment of undervalued currencies throughout the world, Hartquist says. The coalition estimates that China’s currency is still undervalued by nearly 40 percent, despite a modest 3 percent appreciation in the past year since China adopted a new exchange-rate mechanism. CBSA: First-Half Shipments Running 1 All copper products experienced double-digit gains, with total copper shipments up 16.2 percent year-to-year. Alloy shipments, however, registered a positive total of just 10.5 percent following a 3.5 percent decline in the largest volume category, 200 series brass sheet. Shipments in the second largest volume category, 300 series rod and bar, registered a first-half gain of 6.8 percent, CBSA reports. First-half totals were boosted by an excellent performance in June, vs. the companion month of 2005. Total June 2006 copper shipments increased 13.6 percent, while alloy shipments jumped 23.1 percent compared with June 2005. The June vs. June average daily shipping rate registered a comparable gain of 18.9 percent., with the same number of shipping days. Compared to the previous month, however, total June shipments declined 3 percent, while the average daily shipping rate, May vs. June, registered an 11.7 percent drop. The June decline may reflect the typical summer slowdown for copper, or the general slowing of U.S. economic growth, say CBSA officials. MSCI: Service Center Shipments June steel shipments from Canadian service centers resumed a pattern of year-over-year declines interrupted in May, while aluminum shipments rose at single-digit rates. Steel inventory-to-sales positions deteriorated in both countries, while aluminum positions were flat in Canada and deteriorated in the United States. U.S. service centers shipped 5.13 million tons of steel products during June, up 8.8 percent from June 2005 but down from the 15.5 percent year-over-year rate of growth in steel shipments recorded in May. First-half shipments totaled nearly 29.7 million tons of steel products, or 6.1 percent more than in the first half of last year. Steel inventories at the end of June totaled 14.7 million tons, or 1.0 percent lower than a year ago but 3.0 percent higher than at the end of May. At the current shipping rate, this represents a 2.9-month supply, a decrease of 9.0 percent from a year ago but 6.2 percent higher than May 2006. June shipments of aluminum products in the United States totaled 107,500 tons, a decrease of 0.7 percent from June 2005. First-half shipments of 632,400 tons of aluminum products were up 5.4 percent from the 2005 first half. U.S. aluminum inventories of 364,800 tons at the end of June were 2.4 percent lower than a year ago and 3.5 percent higher than the previous month. At the current shipping rate, this represents a 3.4-month supply, a decrease of 1.7 percent from the end of June 2005 and an increase of 3.5 percent from May 2006. Canadian service centers shipped 361,100 tons of steel products during June, a decrease of 0.9 percent from June 2005. First-half shipments totaled 2.11 million tons, down 1.2 percent from the year-ago period. Canadian steel inventories were 1.28 million tons at the end of June, or 12.6 percent higher than last year and 7.2 percent more than May 2006. At the current shipping rate, this represents a 3.6-month supply, an increase of 13.6 percent from a year ago and 12.8 percent from May. Canadian aluminum product shipments totaled 11,200 tons during the month, an increase of 2.9 percent from a year ago. First half shipments of 62,300 tons were 5.9 percent higher than the 2005 first half. Canadian aluminum inventories were 31,000 tons, or 3.6 percent lower than last year and 1.4 percent higher than last month. At the current shipping rate, this represents a 2.8-month supply, a decrease of 6.3 percent from a year ago, unchanged from last month. AISI: Steel Imports Dip in June, Based on a three-month rolling average, finished steel imports overall were up 10 percent, with notable increases in plates in coil (up 78 percent), tin plate (up 39 percent), mechanical tubing (up 31 percent), line pipe (up 30 percent), cold-rolled sheets (up 22 percent), cold-finished bars (up 22 percent), cut-length plate (up 20 percent), sheets & strip all other metallic coated (up 16 percent), hot-rolled sheets (up 15 percent) and hot-rolled bars (up 15 percent). The rising import trend remains pronounced for countries with a history of unfair trading, contend AISI officials, including India (up 56 percent), Taiwan (up 32 percent) and China (up 12 percent). “The first-half import totals come against a backdrop of continued state support of steel capacity offshore, including the massive expansion of steel capacity that we see in China and the rest of Asia,” says Louis L. Schorsch, president and CEO of Mittal Steel USA and chairman of AISI. “A revitalized, globally competitive American steel industry urges continued close vigilance of imports and strong trade law enforcement to ensure market-based outcomes.” IISI: Crude Steel Production China was still the largest steel-producing country with production of 36.6 million tons of crude steel in June, up 18.5 percent vs. June 2005. Total Chinese production for the first six months of 2006 was 199.5 million tons, 18.3 percent higher than for the first half of 2005. China accounted for 33.5 percent of world crude steel production in the first half of this year. Japan produced 9.7 million tons of crude steel in June, 2.5 percent more than for the same month last year. Total crude steel production in North America in June totaled 11.1 million tons, down 5.5 percent from the previous month. Total crude steel production in the European Union was 17.1 million tons in June, an increase of 12.4 percent compared to June 2005. European Union production for the first half was 100.7 million tons, 4 percent higher than for the same period of 2005. AIIS: Pace of Imports As a result of a robust economy, high steel prices, unyielding steel demand and low inventory levels, imports have remained strong throughout 2006. Based on public reports and other indicators such as domestic mills’ order books, the market appears to remain strong. “The mixed economic signals coincide with macro-economic data that suggest a slowing in GDP growth in the second half from the first quarter’s heady rate of growth,” adds Phelps. Total steel imports in June 2006 were 3.37 million tons compared to 3.94 million tons in May 2006, a 14.4 percent decrease, and a 24.9 percent increase compared to June 2005. According to year-to-date figures for six months, imports increased 32.5 percent compared to 2005, or from 16.8 million tons in 2005 to 22.27 million tons in 2006. The data show that semifinished imported products decreased by 2.2 percent in June 2006 as compared to June 2005. For the year-to-date period, semifinished imports increased from 3.49 million tons in 2005 to 4.69 million tons in 2006, a 34.5 percent increase. SSINA: Stainless Consumption, SSINA reports the following data comparing year-to-date imports and consumption through April vs. the same four-month period last year:
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