Saturday, October 30, 2004
Revenues for U.S. Steel climbed about 47 percent to $3.73 billion on the quarter.
Although shipments were down slightly, higher prices and margins domestically and in Europe continued to help the Pittsburgh company. Average prices for flat-rolled steel were up 47.8 percent to $627 per net ton domestically, while tubular prices rose to $907 per net ton, up 45 percent from the same time last year."
Delegations from 39 steel-producing nations have been meeting since 2001 to craft an agreement that would end market-distorting subsidies, such as tax breaks and low-interest loans. The three countries involved agreed to resume talks next year hosted by the Organization for Economic Cooperation and Development (OECD) in Paris, but some are raising questions as to whether governments or trade bodies will enact additional protections while the window is open to do so.
The main sticking points to eliminating steel subsidies remains what qualify as subsidies and whether developing countries, such as Brazil, Turkey, India and even now booming China, should be able to retain certain subsidies, such as government assistance in closing inefficient capacity, assistance in research and development, and solving environmental problems.
'There is a broad understanding that developing countries should get some special treatment,' says Herwig Schlogl, deputy secretary-general of the OECD in a telephone interview. In spite of the breakdown, Schlogl says he 'is heartened' that all countries have agreed to resume talks next year. "
Friday, October 29, 2004
China imported 23.9 million tons of steel from January to September, down 15.2 percent from the same period a year earlier"
As for this year, the association forecasts China's steel consumption growth will be 13 per cent.
China became the largest steel consumer in the world in 1994. Since then, it has kept breaking record in terms of steel consumption, and its apparent consumption of steel even topped 220 million tons in 2003, up 22.38 per cent year on year. It is expected that China's steel consumption will be 260 million tons this year, up 13.2 per cent year on year. "
Wednesday, October 27, 2004
Statistics show that China's steel consumption has seen an annual increase of more than 3,000 tons since 2001, according to statistics released by the China Iron and Steel Industry Association.
However, the steel consumption will not peak before 2010 as China is in the process of industrialization and posting rapid economic growth, which will create bigger steel demand."
Staffers from Thumb Area Michigan Works! are now taking applications at the township office on behalf of Lapeer Metal Stamping Inc. They were to be doing so until 4 p.m. today and will do so again from 9 a.m. to 4 p.m. Wednesday at the hall.
The Lapeer-based auto-parts supplier purchased the former Tower Automotive plant in September. "
Tuesday, October 26, 2004
Monday, October 25, 2004
A similar story can be told of the steel tariffs that the Bush administration foolishly imposed from March 2002 until December 2003 (when a ruling by the World Trade Organization prompted their cancellation). The tariffs were allegedly meant to protect steelworkers. But in the United States, steel users employ roughly 40 times more people than do steel producers. Thus, according to estimates by the Institute for International Economics, between 45,000 and 75,000 jobs were lost because higher steel prices made U.S. steel-using industries less competitive.
These examples illustrate the problem with relying on anecdotes when debating the effects of offshore outsourcing. Anecdotes are incomplete narratives that fail to capture opportunity costs. In the cases of steel and sugar, the opportunity cost of using protectionism to save jobs was the much larger number of jobs lost in sectors rendered less productive by higher input prices. TTrade protectionism amounts to an inefficient subsidy for uncompetitive sectors of the economy, which leads to higher prices for consumers and a lower rate of return for investors. It preserves jobs in less competitive sectors while destroying current and future jobs in sectors that have a comparative advantage. Thus, if barriers are erected to prevent offshore outsourcing, the overall effect will not be to create jobs but to destroy them.
So if protectionism is not the answer, what is the correct response? The best piece of advice is also the most difficult for elected officials to follow: do no harm. Politicians never get credit for inaction, even when inaction is the best policy. President George H.W. Bush, for example, was pilloried for refusing to follow Japan's lead by protecting domestic markets -- even though his refusal helped pave the way for the 1990s boom by letting market forces allocate resources to industries at the technological frontier. Restraint is anathema to the political class, but it is still the most important response to the furor over offshore outsourcing. As Robert McTeer, president of the Federal Reserve Bank of Dallas, said when asked about policy responses to outsourcing, "If we are lucky, we can get through the year without doing something really, really stupid."
: "Netherlands-based steelmaker Ispat International NV said Monday that it agreed to acquire LNM Holdings NV and International Steel Group Inc. in separate deals to create Mittal Steel Co., the world's largest steel company.
Ispat said the combined company will produce a portfolio of both flat and long steel products to serve all the major steel consuming sectors, including the automotive, appliance, machinery and construction sectors. Mittal Steel [...] will have operations in 14 countries and employ 165,000 workers"
Friday, October 22, 2004
Yahoo! News: "- The presidential campaign is getting a little Daffy. The blustery Daffy Duck brashly tosses his bill into the ring as part of a new four-minute educational cartoon. He sets his sights on the White House with hopes of avenging slights from Bugs Bunny by declaring year-round rabbit hunting season. "
Intended to end a bitter trade war with Europe, the election-year measure was described by supporters as critically necessary to aid beleaguered manufacturers who have suffered 2.7 million lost jobs over the past four years.
But opponents charged that the tax package had grown into a massive giveaway that will add to the complexity of the tax system and end up rewarding multinational companies that move jobs overseas. It also will swell the nation's huge budget deficit.
There was no ceremony for the bill-signing. White House press secretary Scott McClellan announced it on Air Force One as Bush flew to a campaign appearance in Pennsylvania. The handling of the corporate tax bill was in contrast to Bush's action on Oct. 4 when he sat before television cameras on a stage in Des Moines, Iowa, to sign three tax-cut breaks popular with middle-class voters and reviving other tax incentives for businesses.
Bush's campaign rival, Sen. John Kerry (news - web sites), missed the vote on the corporate tax breaks. Kerry spokesman Phil Singer said there were many important things in the bill but that 'George Bush (news - web sites) filled the bill up with corporate giveaways and tax breaks for multinational companies that send jobs overseas. In his first budget, John Kerry will call for the repeal of all the unwarranted international tax breaks that George Bush included in this bill.' "
Thursday, October 21, 2004
'We have built short-range optical links that we believe will be cheaper, less noisy, and smaller than copper ribbons. You can get high-speed signals and you can get rid of the need of having to use copper ribbons,' he said. "
"At this point in time, where we're focused and where we're headed is re-sourcing where we know we have a supply of steel," GM Canada spokesman Stew Low said Wednesday, a day after GM struck a deal to find other steel suppliers in the first quarter.
That deal would see the world's biggest car manufacturer seek out another steel supplier for the first three months of 2005, then return to Stelco for the rest of the year if Stelco settles some labour and financing issues by the middle of next month.
The agreement reached between two longtime business partners spares GM from having critical steel supplies for parts used in several GM factories, including its Oshawa, Ont., operations, cut off by a potential strike at Stelco's Lake Erie steel mill. Workers at that mill, which ships nearly 350,000 tons of steel to GM each year, have been without a contract since July 31.
The United Steelworkers union said Tuesday that GM would likely return to Stelco in the first quarter anyway, since the automaker would find spot market prices - believed to be much higher than GM's contract price - unpalatable.
"The idea that they're going to go somewhere else and pay more, I don't believe they are going to do that," Bill Ferguson, president of the Steelworkers local representing the Lake Erie members, said Tuesday. "They are pragmatic businessmen."
"We really got to the point where we needed to know, virtually now, where we stand," Low said. "We do need the time to re-source and we need to set up a new supplier, make sure the logistics are in place, they know where to ship, what products to ship, and all that kind of stuff.
"It's fairly complex, it's not just one order," he added. "It's multiple plants, it's going all over North America. So setting it up takes a huge amount of work."
Low downplayed reports GM would face much higher steel costs based on spot market prices in the first quarter, expressing confidence in skilled GM purchasers in Detroit.
But they rule out the possibility of a sharp fall."
Zeeland's city council Monday night rejected by a 5-2 vote Zeeland Mold Technology's request that it be granted Renaissance zone status, which would have exempted the business from state and local income taxes for the next 15 years."
According to the complaint, Congress has authorized additional support for displaced workers who could show their jobs were shipped to NAFTA partners Canada or Mexico. Under the NAFTA-TAA (Transitional Adjustment Assistance) program, workers are then qualified for aid such as training, additional unemployment and relocation.
The trick in this case, though, was proving jobs were shipped to Mexico."
Wednesday, October 20, 2004
Steel and other metal stocks led fallers with the sector down 2.7 percent versus a 1 percent decline in the FTSEurofirst 300 index of European blue chips. "
Sunday, October 17, 2004
Cleveland and Cuyahoga County planners, International Steel Group executives and representatives of the Western Reserve Historical Society met for the first time Thursday to pursue the idea of a museum celebrating the steel industry."
Friday, October 15, 2004
Hedge fund managers said on Thursday that fundamentals were likely playing little or no part in the price tumble of a metal that is often cited as a marker for the health of global industrial demand."
Hedge fund managers said on Thursday that fundamentals were likely playing little or no part in the price tumble of a metal that is often cited as a marker for the health of global industrial demand."
Consumption of copper in China, the world's biggest buyer, fell 21 percent in July from a year earlier, leading a global decline of 3.3 percent, the Lisbon-based International Copper Study Group said yesterday.
``At some point, and who knows when, there's going to be a hiccup in China, and the huge consumption everybody's expecting for the next six months or a year is not going to be so huge,'' said Ron Fisher, a basic-materials analyst in New York at Stein Roe Investment Counsel, which sold its copper holdings in March. ``The China factor is very big in the metals.''
Copper futures for December delivery fell [...] 11 percent [...] on the Comex division of the New York Mercantile Exchange. A close at that price would be the biggest drop since April 1990."
Thursday, October 14, 2004
'There's a risk of a bubble here,' said Matthew Parry, commodities analyst at the Economist Intelligence Unit.
'China is still a smaller economy than the UK, and a lot of the growth in demand we're seeing could be down to re-stocking.'
Other analysts have warned that China's economic renaissance may turn out to be more fragile than it appears.
They highlight fears that government efforts to tackle bad debts weighing on the country's banks may trigger a credit squeeze, stopping the economy in its tracks.
Another danger is that Beijing may yield to US pressure for a revaluation of the Chinese currency, sharply reducing the country's vital export earnings. "
Copper futures sank by as much as 12% from 15-year highs on the New York Metals Exchange, before settling 11% lower.
In the UK, copper fell 8.4% from a 15-year high of $3,145 on 8 October.
Traders described the speculative selling on the London Metal Exchange as unstoppable. "
Some suppliers want automakers to pay an extra 10% to 20% when renewing contracts because of rising steel prices. Automakers are balking, demanding instead that suppliers find ways to cut costs.
But both sides are likely to feel the pinch. The price of cold-rolled steel, the kind used by automakers and their suppliers, was $740 a ton last week, up 68% from $440 a ton in January.
Suppliers use steel to build parts such as wheels, door handles and engine components. Automakers buy steel for exterior parts such as fenders and hoods.
The steel in a $26,000 car costs $750 to $1,000.
If automakers accept the price increases sought by suppliers, the likely impact is $100 to $200 a car. Because of intense sales competition, automakers would be unlikely to pass that increase on to buyers, further draining profits already hurt by customer incentives.
The auto industry isn't alone in feeling the effects of climbing steel prices. Among others, the building and road construction industries have been hurt.
The price increase is being driven by global demand for steel, primarily in China, which is undergoing explosive growth in construction and manufacturing.
"It's not just an automotive industry problem or a domestic problem. It's a global problem and a problem for any industry using steel components," says Tony Brown, senior vice president of global purchasing for Ford Motor."
Wednesday, October 13, 2004
``London Metal Exchange prices will remain historically high well into next year,'' London-based analyst Stephen Briggs said in the SG Commodities Research report. The LME is the world's largest metals bourse, handling $2 trillion a year in trades.
Prices will fall about 5 percent after this year's 40 percent gain, Briggs forecast. Copper last week closed at a 15-year high on the LME, aluminum reached a nine-year peak and lead climbed to a record. Demand for those metals, along with nickel, zinc and tin, will rise 6.5 percent this year, he said.
China's growth in demand is slowing to 15 percent this year from 20 percent last year, Briggs said. China, the world's largest user of copper and aluminum, will spend at least $560 billion on power plants and transmission lines by 2010, requiring 500,000 tons of copper, according to Ingrid Sternby, an analyst at Barclays Capital in London. "
Speaking from London, Mr Michelmore said copper and nickel markets remained very strong going into 2005."
Tuesday, October 12, 2004
Three-month copper on the London Metal Exchange was trading at $3,085/$3,090 a tonne by 0630 GMT, down $55 from Monday's close of $3,140.
Morning trade in Asia was extremely volatile, with the red metal plummeting more than $50 in early trade before recouping half those losses by the end of the morning, supported by a strike at a unit of the world's top producer, Codelco. "
SeedQuest - Central information website for the global seed industry: "Acidity is a serious limitation to plant production on many of the world's agricultural soils. Toxic aluminium (Al) cations solubilized by the acidity rapidly inhibit root growth and limit subsequent uptake of water and nutrients. Recent work has shown that the ALMT1 gene of wheat (Triticum aestivum) encodes a malate transporter that is associated with malate efflux and Al tolerance. We generated transgenic barley (Hordeum vulgare) plants expressing ALMT1 and assessed their ability to exude malate and withstand Al stress. ALMT1 expression in barley conferred an Al-activated efflux of malate with properties similar to those of Al-tolerant wheat. The transgenic barley showed a high level of Al tolerance when grown in both hydroponic culture and on acid soils. These findings provide additional evidence that ALMT1 is a major Al-tolerance gene and demonstrate its ability to confer effective tolerance to acid soils through a transgenic approach in an important crop species."
I don't remember much myself, but I did work for a while with a research farm north of Toronto. Basically, aluminum is a soil pollutant. We knew that. The way it acts as a pollutant is it stops seed roots from growing, limiting access to water and nutrients. Then presumably it either kills or stunts the plant.
Using genetic engineering, they found a way of taking a gene from wheat, crossing it with barley, and making the barley more tolerant of the aluminum that is poisoning the soil (don't ask me for a more in-depth explanation, we've just exhausted my understanding of it).
Sounds to me like another good reason to recycle aluminum rather than throw it into landfill.
About 760 supervisors at Codelco Norte, the Chilean government-owned company's biggest division, will ``definitely'' strike today, Reuters reported, citing a union spokesman. The union this week extended a deadline for the strike until today.
``The strike has been the main reason for strength in copper prices this week,'' said David Thurtell, a commodity analyst at Commonwealth Bank of Australia in Sydney. ``You're talking about the world's biggest copper producer.'' "
While the tariffs were in place for 20 months, the industry consolidated. It merged most resources into three large players and several smaller companies, all burdened by less debt and fewer obligations to retired workers.
'In essence, the industry strengthened itself from within to become more globally competitive,' Gravatt said. 'What was really interesting was this wave of global demand really began to take off right around the time the tariffs were removed.' "
Saturday, October 09, 2004
Boeing employs more than 150,000 Americans and provides work to more than 26,000 suppliers, many of whom are small businesses, in all 50 states. In Manzullo's northern Illinois congressional district alone, Boeing provides more than $156 million in contracts annually to dozens of suppliers.
“For years, Airbus has reaped a tremendous competitive advantage over Boeing because of Europe’s continual efforts to give its aircraft maker an edge. This is not fair trade,” Manzullo said. “I praise the Bush Administration and our Trade Representative, Robert Zoellick, for challenging these unfair subsidies and giving Boeing and its employees and suppliers hope that they will soon be on a level playing field with Airbus.” "
Friday, October 08, 2004
In a letter received yesterday, the customer cited the uncertainty of supply caused by USWA Local 8782's issuance of 90 days notice of a potential strike at the Company's Lake Erie facility. The letter stated that, even though the customer has reached agreement with Stelco on the pricing terms for a 2005 contract, it is concerned about the possibility of a strike during that period.
As a result, the customer indicated that it cannot enter into a 2005 contract with the Company unless it receives assurances soon that Stelco will be able to perform throughout the term of the proposed agreement. "
Houston-based Kaiser?s pension plan was only 48 percent funded, according to Jeffrey Speicher, a spokesman for the federal Pension Benefit Guaranty Corp."
The Labor Department report, showing the unemployment rate in September held steady at 5.4 percent, will provide fodder for the second debate between President Bush and Democratic Presidential contender Sen. John Kerry, the first one in which the candidates are expected to discuss economic policy.
The September job-creation total came in below Wall Street economists' forecasts for 148,000 new jobs. Four hurricanes swept through the Southeast during August and September, which Labor said likely held down employment growth 'but not enough to change materially' its estimate of September jobs. "
Wednesday, October 06, 2004
It's been nine months since Bush repealed those tariffs, but those customers haven't returned to Metal-Matic.
'We lost $25 million in annual business to Europe because of the tariffs on imported steel. We are still trying to make up for that lost business,' said Robert Baldauff, manufacturing manager of the 600-worker operation, which buys steel to make tubular hatchback lifts, shock absorbers and door stiffeners.
'Those were good, efficient sales that we lost, and we will never never get that back. To make that up, we had to take a large number of small jobs that were not as efficient. Our profits are down.' "
Tuesday, October 05, 2004
Monday, October 04, 2004
The department said factory orders shrank 0.1 percent in August, posting the first decline in four months after gaining a revised 1.7 percent in July. This was originally reported as rising 1.3 percent. "
Friday, October 01, 2004
The Chinese delegation 'reaffirmed China's commitment to further advance reform and to push ahead firmly and steadily to a market-based flexible exchange rate, and described the steps the Chinese government has taken to create conditions to establish a more flexible exchange rate,' the statement said.
The United States and its G7 partners had maintained that the Chinese currency, pegged to a weak dollar, makes foreign goods too expensive -- and thereby less competitive -- in China, while leaving Chinese exports unfairly cheap in foreign markets.
Some analysts have said a free-floating yuan could boost US exports and thereby help reduce Washington's massive current account deficit, which IMF Managing Director Rodrigo Rato has characterized as a threat to the world economy.
Rato had said earlier that China should take advantage of a growth rate expected to hit nine percent this year to allow greater flexibility in its exchange rate mechanism. "