| February
2006 Association News |
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China
Currency Coalition Disputes According
to David A. Hartquist, counsel for the coalition of North American
manufacturers and trade groups, China’s undervalued currency
is a stealthy way of subsidizing its exports to the U.S. while taxing
U.S. exports to China. “Based on the latest trade and employment
statistics, obviously China’s much-touted appreciation of its
currency last July has had no positive impact on U.S. trade or manufacturing,”
he states. In
January, the U.S. Department of Commerce announced that the U.S./China
bilateral trade deficit reached $185.3 billion in November 2005,
putting it on a trajectory to reach $202 billion for the year. The
Department of Labor also announced annual employment data indicating
the loss of 50,000 U.S. manufacturing jobs. China
revalued the yuan by 2.1 percent last year to address critics’
claims that it manipulates its currency to maintain an unfair trade
advantage. Coalition members argue that the yuan remains undervalued
by as much as 40 percent. ASD
Names Esmark’s Bouchard Steel Man of the Year Bouchard
will be honored at a black-tie reception and dinner Sunday, March
26, during the ASD Annual Convention in Acapulco, Mexico. “Jim
Bouchard has transitioned from the mill side of the steel industry
to the distribution end and brought a dynamic new wave of change
to the service center market,” says Doug Everhart, president
of ASD. “He exemplifies the entrepreneurial spirit of the ASD
and brings a commitment to our industry and organization that will
serve us well into the future.” Along
with his brother Craig, Jim founded Esmark Inc. in late 2003 as
a holding group for the steel assets of the Bouchard Group. At the
time it was founded, Esmark owned two companies. It has since grown
to nine. The company Bouchard built from scratch went from $4 million
to $700 million in annual revenue in two years. Now with more than
4,000 customers across the United States, Esmark is one of the most
profitable and respected companies in the steel industry. “I’m
deeply honored to be recognized by ASD,” says Bouchard. “Since
my early days at Inland Steel and U.S. Steel, I’ve dreamed
of being in a position to bring vitality, efficiencies and productivity
to the steel industry.” MSCI:
Steel, Aluminum Inventories Rise Steel
product shipments from Canadian service centers declined during
December, blunting three consecutive months of year-over-year shipment
increases, but aluminum shipments were higher than year-earlier
volume for the fifth consecutive month. Month-end inventory levels
expressed in terms of months of supply were sharply higher for both
major product lines at Canadian service centers. U.S.
service centers shipped nearly 3.9 million tons of steel products
in December, or 2.1 percent more than during December 2004. For
the full year, U.S. service center steel shipments of 54.7 million
tons were 1.5 percent lower than the 2004 total. Steel
product inventories at the end of December were nearly 12.9 million
tons, down 18.9 percent from December 2004. Expressed, however,
in terms of current shipping rates, that inventory represents a
3.3-month supply, an increase of 19.7 percent from the previous
month, but down 20.6 percent from the end of 2004. Shipments
of aluminum products of 90,600 tons were 2.7 percent above those
of December 2004. For all of 2005, U.S. service center shipments
of aluminum products rose 6.5 percent, to nearly 1.2 million tons. Aluminum
products in inventory totaled 352,600 tons at the end of December,
an increase of 1.8 percent over the end of 2004 and 0.6 percent
higher than November levels. At the current shipping rate, this
represented a 3.9-month supply, down 0.8 percent from the end of
2004, but 4.6 percent higher than the end of November. Some
269,800 tons of steel products were shipped by Canadian metals service
centers in December, a decrease of 0.6 percent from December 2004.
Full-year 2005 steel shipments were down 3.2 percent, to nearly
4.2 million tons. Steel
product inventories at Canadian service centers totaled 984,900
tons at the end of December, a decrease of 22.8 percent from December
2004 and down 0.2 percent from November 2005. At the current shipping
rate, this represents a 3.7-month supply, down 22.4 percent from
the end of 2004, but up 38.9 percent from the previous month. Shipments
of aluminum products, of 8,100 tons, rose 8.6 percent above December
2004 shipments. For the full year, aluminum shipments from Canadian
service centers rose 3.6 percent, to 114,200 tons. Month-end
inventories of 30,900 tons of aluminum were 5.4 percent higher than
the year-ago December, but 0.3 percent lower than at the end of
November. At the current shipping rate, this represents a 3.8-month
supply of aluminum products in inventory, down 3.0 percent from
last year but up 16.5 percent from November. CBSA:
Copper Shipments Copper
shipments in December were up 4.6 percent compared to the final
month of 2004. For 2005 as a whole, however, shipments were off
2.4 percent vs. 2004. The
difference was in the alloy product segment, which finished 4.3
percent behind the 2004 figures. Copper shipments, on the other
hand, completed the year up 1.8 percent. December
shipments saw a seasonable decrease from November, off 14.5 percent
total. Service
center and mill executives continue to report that end-use customer
inventories remain low for red metal products due to the high price
of copper. Inventories among some service centers increased during
November and December, possibly in preparation for what is typically
a January surge in shipments of copper and copper alloy products,
CBSA reports. A
year-to-year comparison of year-to-date shipments through November
shows the following changes within major market classifications:
service centers and distributors, down 8.3 percent; automotive,
up 3.7 percent; construction and contractors’ products, up
3.8 percent; oil and gas, up 2.9 percent; machinery, industrial
equipment and tools, down 2.1 percent; appliances, utensils and
cutlery, down 3.8 percent; containers, packaging and shipping materials,
down 14.6 percent; and electrical equipment, down 5.1 percent. IISI:
World Steel Production China
increased its production by 69 million tons to a total of 349.4
million tons, a 24.6 percent increase. China’s share of the
world total increased from 26.3 percent to 30.9 percent. During
2005, Chinese production outstripped demand, and the market was
over-supplied. The Chinese government has announced its intention
to close inefficient and uneconomic capacities, and concentrate
a greater share of output under the control of several large companies,
IISI reports. A
consolidated North American steel industry was able to reduce production
in line with demand through 2005, while the high inventories built
up in the marketplace during 2004 were liquidated. The region’s
output fell by 7 million tons or 5.3 percent, to 127 million tons,
according to IISI. In
Japan, improving private sector demand offset weakness in the public
sector. Crude steel production of 112.5 million tons in 2005 was
virtually unchanged from the previous year’s level. India’s
strong economic growth provided the backdrop for 16.7 percent growth
in the country’s steel output. Indian production totaled 38.1
million tons in 2005. Asia’s total output rose by 14.8 percent
to 583.8 million tons, more than half of the world total. The
European market was beset by high inventories. Cutbacks by some
producers reduced output in the EU by 3.6 percent, to 186.5 million
tons. Production in the CIS held steady at 112.9 million tons. Briefs The
Specialty Steel Industry of North America named Jack Simmons chairman
of its market development committee. Simmons will be responsible
for spearheading marketing initiatives aimed at increasing U.S.
market share for stainless steel products. A 25-year veteran of
the industry, Simmons is manager of marketing and product development
at Electralloy, Oil City, Pa. Philippe
Varin, CEO of Corus, was elected new president of Eurofer, the European
Confederation of Iron and Steel Industries. He replaces Guy Dolle,
CEO of Arcelor, who completed his four-year term in December. Aluminum
industry representatives from six member countries of the Asia-Pacific
Partnership on Clean Development and Climate have reached an agreement
on voluntary action in the areas of cleaner air, energy, conservation,
recycled materials and improved efficiencies. The members reached
a memorandum of understanding at the AP6 Ministerial Meeting in
Sydney in mid-January and are expected to formally sign the agreement
in May in Beijing. “Aluminum
is an industry sector that can make practical, measurable contributions
to clean economic development and the reduction of greenhouse gases,”
says U.S. Aluminum Association representative Steven J. Demetriou,
chairman and CEO of Aleris International. “We are committed
to harnessing the advantages of aluminum to achieve economic and
social progress as well as measurable improvement in environmental
quality.” The American Iron and Steel Institute has developed a new roadmap for dramatically reducing energy use in steelmaking. Entitled “Saving One Barrel of Oil per Ton - A New Roadmap for Transformation of the Steelmaking Process,” it describes a long-term strategy designed to reduce energy intensity in steel production by identifying research pathways in energy substitution, energy recovery and energy savings. The roadmap will guide research over the next 10 to 15 years toward the 2025 target of producing steel using approximately one barrel of oil—approximately 6 million BTU’s per ton less than today’s processes.
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