| September 2006 Association News |
Trade Groups Trade Claims Hans Mueller, a consultant for the AIIS, which represents foreign steel interests, prepared “Integrat-ing the Chinese Steel Industry and Trade Policy into the 21st Century.” In the report, Mueller disputes the breadth and effectiveness of Chinese subsidies, among other findings. The truth, AIIS contends, is that the Chinese steel industry has grown to its current size due to market-based reforms of the Chinese economy that began in the 1980s. Furthermore, AIIS argues, the Chinese central government has shown inadequate ability to control economic expansion of its economy. For the past several years, the central government has attempted to slow the fast-growing juggernaut, but these attempts mostly were foiled by basic, untamed capitalist-driven economic growth and uncooperative provincial and local government entities. The AIIS report acknowledges that the non-competitive and polluting segment of the Chinese steel industry is subsidized and should be shuttered. But it also contends that the bulk of the industry is modern and in no need of subsidies. Additionally, Mueller says that contrary to some beliefs, a confrontation between the Chinese and the United States on steel issues is not inevitable. The strength of the U.S. steel market and the rapid growth of Chinese steel consumption will stave off such a battle. “Because of its size, China, like the U.S., can never be just another member of the global trading community,” Mueller writes. “It would help, however, if both sides viewed the other’s policies and actions with an unbiased mind and not let prejudice and suspicion cloud their judgment from the start.” The reports are available at the association Web sites: www.steel.org for AISI and www.aiis.org for AIIS. Crude Steel Production China produced 36.1 million tons of crude steel in July, an increase of 22.2 percent year-on-year. Other major producers in the Asia region include Japan (9.9 million tons in July, up 4.5 percent) and South Korea (4.0 million tons, up 6.2 percent). In North America, July production in the United States was up 18.7 percent to 8.5 million tons vs. July 2005. Canada produced 1.3 million tons in July, an increase of 22.9 percent. Germany was the largest producer of crude steel in the European Union with total production of 4.0 million tons in July—14.5 percent higher than for the same month of 2005. July production in the United Kingdom was 1.2 million tons, an increase of 9.9 percent compared to July 2005. Brazil produced 2.7 million tons of crude steel in July—9.4 percent higher than for the same month in 2005. MSCI: July Steel Inventories In Canada, service centers also reported a steel inventory increase at the end of July, with stocks up 22.1 percent from year-earlier totals to nearly 1.4 million tons, enough to handle demand for 4.5 months at current shipping rates. U.S. service centers shipped 4.4 million tons of steel products during July, up 8.8 percent from July 2005. Year-to-date steel shipments totaled 34.1 million tons, an increase of 6.5 percent from shipments during the same seven-month period last year. Month-end steel inventories totaled nearly 15.3 million tons, an increase of 6.5 percent from the year-earlier amount and 3.6 percent greater than at the end of June. At the current shipping rate, steel inventories represented a 3.4-month supply, an increase of 19.8 percent from June, but 2.1 percent lower than a year ago. Aluminum shipments totaled 91,300 tons during July, a 2.4 percent decrease following a 0.8 percent year-over-year decline in June. For the year to date, aluminum shipments of 723,700 tons were up 4.3 percent from the same period of 2005. Aluminum inventories totaled 377,400 tons at the end of July, 3.4 percent greater than the end of June and 2.3 percent more than July 2005. At the current shipping rate, this represents supplies sufficient for 4.1 months, an increase of 21.7 percent from June and an increase of 4.8 percent from July 2005. July shipments of steel products from Canadian service centers declined 4.0 percent from the same month in 2005, to 299,000 tons. For the first seven months of the year, steel shipments of 2.4 million tons were down 0.6 percent from the same period last year. Steel product inventories of nearly 1.4 million tons were 22.1 percent greater than at the end of July 2005 and represented a supply sufficient for 4.5 months at current shipping rates, an increase of 27.8 percent from June and 17.4 percent from a year ago. Canadian aluminum shipments rose 2.1 percent from year-earlier totals, to 8,500 tons. Shipments for the first seven months of the year totaled 73,900 tons of aluminum products, or 4.8 percent more than last year. End-of-July inventories of aluminum totaled 31,400 tons, down 2.8 percent from a year ago and 5.9 percent from June. At the current shipping rate, aluminum inventories represent a 3.7-month supply, an increase of 29.9 percent from June, but down 4.8 percent from last year. AISI: Steel Imports in July Reach Total imports of steel were up 13.6 percent from the previous month. Finished steel imports were 8.5 percent higher than in June, the American Iron and Steel Institute reported. For the year, total imports were up 38 percent and finished imports were up 39 percent compared to 2005. At this pace, both total and finished steel imports would set all-time records. Looking at a three-month rolling average, finished steel imports overall are up 8 percent, with notable increases in plates in coil (up 72 percent), sheets and strip all other metallic coated (up 25 percent), hot rolled sheets (up 22 percent), sheets and strip galvanized hot dipped (up 13 percent), cut-length plates (up 11 percent) and numerous tubular products, including line pipe, mechanical tubing and oil country goods (up 33, 27 and 14 percent, respectively). Among the countries increasing steel exports to the United States were India (up 49 percent), China (up 27 percent), South Korea (up 22 percent) and Japan (up 21 percent). CBSA: Copper Shipments Dip from June to July The average daily shipping rate in July was down 6.1 percent. In terms of pounds, the decline was 14.6 percent. Shipments were up 2.2 percent compared to July 2005. With the continuing high cost of copper and brass, service centers kept inventories at moderate levels over the summer. Stocks normally increase somewhat during July, as business typically slows, note CBSA officials. In other action, CBSA’s officers and directors voted in June to open the association’s elected leadership to non-service-center members. Elected by the Executive Committee to 18-month terms were Donald M. Commerford Jr., senior vice president, Revere Copper Products Inc., Rome, N.Y.; and Joyce Roncken, sales manager, Cooper Plating Inc., Newmarket, Ontario. SSINA: Stainless Steel Imports U.S. consumption was 1,042,946 tons, a 6 percent increase from 2005, while import penetration was 30 percent. SSINA reports the following data comparing year-to-date imports and consumption through May vs. the same five-month period last year:
Imports of total specialty steel (comprising stainless steel, alloy tool steel and electrical steel) in the first five months of 2006 were 383,808 tons, a 2 percent increase compared to the same 2005 period; U.S. consumption was 1,250,810 tons, a 4 percent increase.
PMA: Metalforming Companies When asked to predict the trend in general economic activity over the next three months, 78 percent said business would stay the same or decline. Only 22 percent of participants forecast that business conditions would improve (down from 30 percent in July), while 20 percent said economic activity would decrease (up from 18 percent in July). Average daily shipping levels also dropped in August. Only 18 percent of companies reported that shipping levels were above levels of three months ago (compared to 34 percent the previous month). About 29 percent reported that August shipping levels were below levels of three months ago (compared to 19 percent in July). Despite this, metalforming companies expect incoming orders to remain steady during the next three months. Briefs |
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