North America Sets Steel
Shipment Record in 2006
AISI: U.S. Steel Imports Set All-Time Mark
IISI: World Steel Output
Sets Record in 2006
SSINA: Stainelss Imports Up
21% Through October
NAM: Industrial Production
Jumps in December
• CITAC
  WTO Rules Against U.S. in Zeroing Cases

North America Sets Steel
Shipment Record in 2006
Reflecting a continued slowdown in general economic activity, steel product shipments from U.S. and Canadian service centers fell sharply in December from the same month a year earlier. But U.S. shipments for the full year still set a record of 56 million tons, according to the Metals Activity Report from the Metals Service Center Institute, Rolling Meadows, Ill.

Steel shipments fell 10 percent in December compared with December 2005, to about 3.5 million tons. The full-year shipment total of 56 million tons was 2.4 percent higher than total shipments for 2005, and exceeded the previous annual shipping record of 55.6 million tons set in 2004.

Service centers continue to work down excess inventories, say MSCI officials. Year-end steel inventories declined slightly from November totals in both the United States and Canada.

Year-end steel product inventories in the United States totaled 16.5 million tons, or 28 percent more than at the end of 2005. At the December shipping rate, this represented a 4.7-month supply.

In the aluminum sector, December product shipments totaled 86,800 tons, down 4.3 percent from December 2005. Aluminum shipments for the full year were 1.2 million tons, also a new annual record and 2.7 percent higher than in 2005.

Aluminum inventories ended the year at 376,800 tons at U.S. service centers, up 6.9 percent from the end of 2005, but 2.9 percent lower than in November. At the December shipping rate, this represented a 4.3-month supply.

Canadian steel and aluminum
December steel shipments from Canadian service centers totaled 235,800 tons, a decrease of 12.6 percent from the same month a year earlier and well below seasonal expectations. Full-year 2006 steel shipments totaled 3.9 million tons, down 4.7 percent from 2005.

Year-end steel inventories of nearly 1.3 million tons were 27.8 percent higher than 2005, but down 2.6 percent from November. At the December shipping rate, this represented a 5.3-month supply of steel.

Canadian service centers’ aluminum shipments totaled 8,500 tons, just 0.7 percent greater than December 2005 shipments. Full-year 2006 aluminum shipments totaled 124,700 tons or 3.3 percent more than the previous year.

Aluminum inventories at the end of the year were 29,400 tons, down 8.1 percent from the previous year and 4.6 percent lower than at the end of November. At the December shipping rate, this represented a 3.5-month supply.

AISI
U.S. Steel Imports Set All-Time Mark
Imports of total and finished steel set records of 45.3 million and 35.9 million tons, respectively, in 2006. The previous import records were 41.5 million tons of total steel and 34.7 million net tons, set in 1998. The year-end import figures also represented increases of 41 and 43 percent over the 2005 totals, according to the American Iron and Steel Institute, Washington, D.C.

The import surge slowed in December, when the U.S. domestic steel industry was operating at an average capacity utilization rate of just 75 percent. December imports totaled just under 3.0 million net tons of steel, including 2.5 million net tons of finished steel. Those figures were down 13 and 12 percent, respectively, from the November figures.

The primary region responsible for the high import figures, according to AISI, was Asia. China was the largest exporter to the United States for the sixth straight month, sending 470,000 tons to the United States in December. Finished steel imports from Asia nearly doubled in 2006, led by China’s total of almost 5.4 million tons. Taiwan, Malaysia and Thailand also registered more than 100 percent increases in the amount of finished steel sent to the United States in 2006 compared to 2005.

“When we look at surging imports from China and other countries with a history of market-distorting trade practices, it’s clear our trade laws are in urgent need of strengthening,” says Andrew Sharkey, president of AISI. “This is why steel joins other globally competitive U.S. industries in supporting the Strength­ ening America’s Trade Laws Act of 2007.”

IISI
World Steel Output Sets Record in 2006
World crude steel output reached 1.24 billion tons in 2006, the highest level of crude steel production in history. The total was an increase of 8.8 percent over 2005, according to the Inter­ national Iron and Steel Institute, Brussels, Belgium.

It was the third straight year crude steel output topped 1 billion tons, and the total for 2006 represents a 65.3 percent increase in production compared to 10 years ago.

The top three steel producing countries were China at 419 million tons, Japan at 116 million tons and the United States at 98 million tons. Brazil was the only country in the top 10 to show negative production growth in 2006.

China has been the driver in the record growth of world output, increasing 313.8 percent in 10 years. A decade after becoming the largest steel producing country in the world, China now accounts for 33.8 percent of all crude steel produced in the world.

As a region, Asia accounted for almost 54 percent of all steel produced in 2006, up from 38.4 percent in 1996.

SSINA
Stainless Imports Up 21% Through October
Imports of stainless steel totaled 682,971 tons through October, representing a 21 percent increase over the first 10 months of 2005, according to the Specialty Steel Industry of North America, Washington, D.C. U.S. consumption totaled 2.2 million tons, a 14 percent increase from 2005.

Imports of total specialty steel (comprising stainless steel, alloy tool steel and electrical steel) through the first 10 months were 828,803 tons, a 12 percent increase from the same period in 2005; U.S. consumption was 2.6 million tons, also a 12 percent increase.

NAM
Industrial Production Jumps in December
Driven by a 0.7 percent jump in manufacturing output, the Federal Reserve reported that overall industrial production rose 0.4 percent in December. 

“After three consecutive monthly declines, this upturn is a hopeful indication that the recent slowdown in industrial activity may be coming to an end,” says David Huether, chief economist for the National Association of Manu­ facturers, Washington, D.C.

The 0.7 percent increase in manufacturing was the strongest gain in six months, and was attributed to increases in computers and electronic products, machinery, aircraft and motor vehicles.

Throughout 2006, manufacturing production increased by 3.7 percent. With overall GDP growth expected to come in at 3.1 percent in 2006, manufacturing has, for the first time since the late 1990s, outpaced the overall economy for three consecutive years, NAM reported. 

CITAC
WTO Rules Against U.S. in Zeroing Cases
The World Trade Organization’s Appellate Body ruled in favor of Japan in a challenge to the practice of “zeroing” in several U.S. Commerce Department antidumping proceedings. The appellate body found that zeroing in each proceeding was contrary to the WTO agreements governing the imposition of antidumping duties.

Foreign goods that are sold for less than their “normal value” in the U.S. are considered “dumped.” Often, however, some transactions occur at prices higher than the relevant normal value. The Commerce Department’s practice has been to ignore those higher-than-normal value sales by treating them as “zero margin” sales rather than averaging them into the calculation, which could reduce, or negate, dumping margins. The WTO contends that such “negative margin” sales should be fully counted, thereby offsetting the “positive margin” sales to arrive at a margin of dumping for all the sales of a covered product.

The Consuming Industries Trade Action Coalition, Washington, D.C., supports the WTO ruling. “While the WTO decision is important, the most critical need is for the U.S. government to recognize what is in the interest of the American economy,” says CITAC Executive Director Steve Alexander. “We are confident that the Commerce Department will now look at the facts and determine that this ‘zeroing tax’ must be abolished in the interest of American manufacturing competitiveness as well as world trading rules.”