Thursday, August 31, 2006
From my perspective, more supply is a good thing. In some stainless grades, it will provide a needed second or third supply.
Forming carbon steel into flat springs, which is mostly what I do for a living, is tricky enough. Then it gets heat treated and plated, both operations that can distort the product and interferes with an accurate, repeatable result.
For us, a good option is to use spring stainless instead. It used to be that the spring stainless option was only about 30% more expensive than the sum of raw material, heat treating and plating costs. In the last 5 years, the price of stainless has made this cost-prohibitive except in certain special cases. It would be nice to go back to the time when the stainless solution required only a small premium over the other. Then, for those of my customers who need the accuracy, it would be available and affordable.
ThyssenKrupp’s recently announced project to build a new stainless steel plant in the US has caused quite some stirrings. Although North American mills are running full-out this year, the prospect of a new competitor with up to 1 million tonnes of additional capacity may give them some sleepless nights.
Plans include melting and hot rolling capacity for 4.5 million tonnes of carbon steel and 1 million tonnes of stainless steel.
It is far from clear whether the North American market has room for new domestic supply on this scale.
The article continues (follow the link) with a well thought out analysis of what might happen in the supply of stainless and carbon steel, depending on who buys whom and so forth.
Wednesday, August 30, 2006
The Summer of Labour Discontent
We have this oddity from Steel Dynamics. As the guy asks at the end of the quote, why negotiate a deal and then don't endorse it?
Fort Wayne Journal Gazette
No deal for Steel Dynamics
Steel Dynamics Inc.’s only unionized workers are on strike after voting down a tentative agreement reached between the company and union negotiators.
The 435 hourly employees at Steel of West Virginia Inc. walked off the job at 11 p.m. Friday after voting earlier in the day on the contract offer, which was not endorsed by their bargaining committee.
Steel Dynamics noted the strike in a news release Tuesday about its plans to buy back up to 5 million shares of its stock. The company said it does not expect the strike to have “a material impact” on overall financial performance.
Fred Warner, Steel Dynamics spokesman, described the lack of support as “kind of strange.”
“Why wouldn’t you recommend something you tentatively agreed to?” he asked Tuesday.
Meanwhile, no one seems to have a good handle on the Chilean copper strike. On the 29th, Bloomberg said Copper prices fell Tuesday amid speculation that a strike at BHP Billiton's mine in Chile soon would be resolved. Only one day later, they opined Copper gained in London on speculation that workers will keep striking at Escondida.
As Chicago (Transit Authority - the band, not the public transit provider) asked, Does Anybody Really Know What Time It Is?
And now, AK Steel. Locked out for more than 4 months now, here's a new twist. From an article from the beginning of this month, AK sued by provider of replacement workers. Meanwhile, AK recently dropped its suit against retirees opposing changes to their benefits. . And they raised transaction prices for all of its stainless hot-rolled sheet and strip products, and continuous mill plate products by about 10 percent, effective Sept. 3.
Monday, August 28, 2006
Essentially all coils go by truck to rerollers or slitters. Most coil consumers have given up the nice rail lines they were close to 50 years ago and rely solely on trucking now for transportation.
The alternative to "eyes out" loading is "eyes to the sky" loading, which certainly seems safer. Riding down the road beside these things, I've often wondered too why they load them this way and how safe I really am driving behind them. I don't stay behind one for any longer than I absolutely have to.
The Birmingham News
Bessemer DA contends way steel is loaded poses a danger
Bessemer District Attorney Arthur Green has filed a civil lawsuit asking a judge to bar U.S. Steel Corp. from hauling steel coils on Alabama highways.
The suit says U.S. Steel loads its trucks with the steel coils "eyes out" - with the holes in the coils facing each side of the trailer - because they are easier to load and unload that way. Green contends in his suit that loading the coils in such a fashion is dangerous.
Since 1987, steel coils have dislodged from flatbed trucks onto Birmingham-area interstates 23 times, state transportation officials say. State officials said they do not know how many of those coils were from U.S. Steel.
The coils, which can weigh up to 44,000 pounds each, have caused hundreds of thousands of dollars of damage to Birmingham-area interstates.
Wednesday, August 23, 2006
Of course, it was a coal mine, which is why it's of interest to stampers.
I've often lambasted China and their human rights and workplace safety record, in general, and in steelmaking and coal mining in particular. It's important to note that people die here too, and that we take it seriously when it happens.
(by way of contrast, China's coal industry claims the lives of about 6,000 miners a year - statistic from March 2006 BBC article. This source claims more than 2,700 miners in the first half of 2005)
The lone survivor of the Sago Mine disaster and the families of two victims filed lawsuits Wednesday against the mine owner and five other companies.
All three lawsuits accuse International Coal Group and a subsidiary of negligence in the operation of the mine. The suits allege that unsafe working conditions led to the January 2 explosion.
Twelve men died in the blast and prolonged entrapment at the coal mine near Buckhannon, while survivor Randal McCloy Jr. was severely injured.
The lawsuits were filed in Kanawha County Circuit Court by McCloy and his wife Anna; Judy Bennett, widow of miner Alva Bennett; and Lily Bennett, widow of miner James Bennett.
Monday, August 21, 2006
In many ways, the best news is near the end - since the Camaro was and likely will be a limited quantity car, Oshawa will be converted to flexible assembly, allowing in future other car lines to be made here, or undercapacity problems in other plants to be addressed here.
New York Times
The Chevrolet Camaro, a classic American muscle car, will be made in a Canadian factory when its production is revived in 2008, General Motors said on Monday.
The decision, one in a series of recent gains for the Canadian auto industry, means that General Motors of Canada will abandon plans to close a plant in Oshawa, Ontario, that is among the most efficient in North America. It follows an agreement with the Canadian Auto Workers union in which about 2,500 jobs will be eliminated through early retirement at G.M.’s complex of factories in Oshawa, just east of Toronto.
At a news conference at the Oshawa No. 2 Plant, which currently builds sedans, G.M. Canada’s president, Arturo S. Elias, said the company would spend about 740 million Canadian dollars ($657.7 million) to convert the factory to a system that will allow it to make a wide variety of models on the same assembly line.
Because the Camaro is expected to sell only about 100,000 units a year, the addition of the flexible production line may ultimately prove more important for the factory’s future than the Camaro, union leaders and industry analysts said.
Oops. I missed this part, near the end ...
Chris Piper, a professor of operations management at the University of Western Ontario in London, said Oshawa’s consistently high productivity and quality ratings in independent surveys might have been decisive factors.
He also said that government-financed health care gave all Canadian auto plants a substantial cost advantage compared to operations in the United States.
As a result, copper prices are up again, 1.5% on the day alone so far.
The thing is, the union wants a share of these current prices. But these prices are artificial and not sustainable. So if they lock in their wages at this artificially high price, the mines will lose money when prices drop again. How is anyone served by that? I don't get it.
Reuters via CNN.com
Striking workers at Chile's Escondida, the world's largest copper mine, have rejected fresh salary and benefit offers in a surprise vote that came after a week of hard negotiations.
'It (the offer) was just rejected unanimously in the assembly, halfway through the presentation,' union secretary Pedro Marin told Reuters late Sunday local time in Antofagasta, the mining town that serves Escondida and a host of other mines owned by multinational companies.
Sunday, August 20, 2006
Contract talks break down between the company and its workers with a contract set to expire Sunday.
A strike vote may be taking place at this hour by workers at West Virginia Steel in Huntington.
United Steel Workers of America Local 37 members unanimously rejected what WV Steel presented as its last -- best -- and final offer. USWA negotiator Carlton Hall says the company is no longer negotiating in good faith. He says they simply threw the offer on the table without acknowledging the union's position on two major issues.
Here's an excerpt from her profile
In 2003 Online Visitors to www.Arc-Zone.com elected me to serve as Miss Arc-Zone. I beat out some tough competition: Brittany Sparks and Mig Ryan.
I don't know beans about welding, but she seems to. And manufacturing. I found her posting about comparative state bonuses to lure manufacturing to different states.
Check it out if you're into that kinda stuff.
I've changed the look of the blog a bit
Saturday, August 19, 2006
SANTIAGO (AFP) - The Chilean government stepped into an escalating labor dispute at the world's biggest copper mine after its operator, Anglo-Australian resources giant BHP Billiton, shut operations and broke off negotiations with striking unionized workers.
BHP Billiton said it had been forced to close the Escondida Mine in northern Chile because of safety concerns over actions taken by striking workers and would pursue legal actions against union workers who blocked access roads to the mine.
"This is illegal pressure," Pedro Marin, a spokesman for the striking miners, told AFP. He accused BHP Billiton of trying to "scare" workers.
With the crippling strike in its 12th day and negotiations ended, President Michelle Bachelet stepped into the breach, naming Labor Minister Osvaldo Andrade to mediate in the dispute.
AK Steel Corp. and its union met for several hours Friday morning, but still did not reach an agreement.
The company said no further negotiating sessions have been scheduled.
Friday, August 18, 2006
Anglo-Australian resources giant BHP Billiton has closed its operations at the world's biggest copper mine in Chile and ended negotiations with striking workers, the company said.
BHP would take legal action against union workers who had blocked all access roads to the Escondida mine in Chile's Atacama Desert, a spokeswoman said.
"This heightened union activity means we no longer feel that we are able to unequivocably guarantee the health and safety of our people or the integrity of the operations, infrastructure," said spokeswoman Emma Meade.
"As a result, Minera Escondida has today closed its operations and ceased negotiations with the union. We will not negotiate with the union while they are carrying out this illegal activity.
"We will be taking legal action against the union to resolve this.
Tuesday, August 15, 2006
Steel prices in China dropped in July after five consecutive month-on-month rises as overproduction began to hit the market.
A report released by the People's Bank of China (PBOC) on Monday showed steel prices in July dropped 3.9 percent from June and 4.9 percent from the same month last year.
This was the first monthly decline since January, but the steel price still 11.9 percent up from the beginning of the year.
Analysts said the decline showed overproduction has begun to bite on the steel market.
The World Trade Organization's highest judges ruled U.S. tariffs on Canadian lumber imports violate trade rules, reversing a decision last year and opening the door to possible sanctions worth C$4.25 billion ($3.78 billion).
The ruling undoes the WTO's rejection of a Canadian complaint in November, when arbitrators found the U.S. had complied with earlier rulings on the issue. The WTO now says the U.S. illegally excluded some price data from its calculations when it determined there was a threat to the U.S. lumber industry from cheaper Canadian imports.
Monday, August 14, 2006
IMT reader Nick Sevastian, a mechanical engineer by education who specialized in Special Purpose Machinery and has 27 yearsâ€™ of experience, tries to pinpoint the reasons for â€śthe American industrial declineâ€? â€” especially in comparison with Japan.
Has anybody wondered why the Japanese automotive industry continues to gain market while United States automotive players keep losing it? While many of us have some answers, in my opinion nobody has put his or her finger on it, dotted the â€śiâ€?s and crossed the â€śtâ€?s. I will try to take a shot at it.
While his article is very interesting, even more interested are the pages and pages of responses it generated. Well worth taking a half hour some time and reading through.
Saturday, August 05, 2006
Workers at the world's biggest copper mine in Chile threatened to go on strike next week after the collapse of salary negotiations.
The work stoppage [...] will start Monday if management fails to make a new offer to the miners, said the union representing 2,000 workers.
In its last offer Wednesday, the company proposed a three percent salary increase and a 15,000 dollar bonus to each miner, but the union rejected it as an "insult."
The miners are asking for a 13-percent salary increase and a 30,000 dollar bonus, as the price of copper has nearly quadrupled over the last three years.
Mina Escondida produces eight percent of the world's copper.
The United States expressed concern at the prospect of renewed Japanese trade sanctions over a US anti-dumping law that was repealed last year.
Japan's government has decided to extend for another year anti-dumping tariffs on 15 American products in retaliation against the so-called Byrd Amendment, Japanese news agencies reported.
'We're disappointed that Japan will continue to retaliate against the (amendment),' said Stephen Norton, a spokesman for US Trade Representative Susan Schwab.
'The United States has taken all necessary steps to comply with the WTO (World Trade Organisation) rulings in that dispute and further retaliation serves no purpose other than to prolong the dispute,' he said.
All necessary steps? It was repealed, but in fact, it didn't end. The repealing takes effect in 2 years. Did they really think this would fool anyone?
Friday, August 04, 2006
Japan will maintain 15 percent punitive tariffs on US ball bearings and steel products until August 31, 2007 in retaliation against the continued implementation of a controversial US anti-dumping trade law known as the Byrd Amendment, Kyodo News said.
Wednesday, August 02, 2006
Copper prices rose as labor disputes and supply disruptions in Chile curb production amid growing demand for the metal used in wiring and plumbing.
Copper gained 78 percent this year, partly because of strikes and production glitches in countries including Mexico, Chile and Indonesia. A looming stoppage at Escondida, the world's biggest copper mine, may limit supply. Production at Codelco's Chuquicamata mine was cut by a July 23 rockslide.
``Those are the two biggest open pit mines in the world, so everyone's watching them,'' said Herwig Schmidt, a London-based trader at Triland Metals Ltd.
Tuesday, August 01, 2006
These are pretty big and bold price increases. I saw no reason given in the press release for the increase. Yes, nickle prices are up, but if I recall correctly, 409 has less nickle than the other stainlesses, a lot less.
I wonder if they can make the prices stick. The customers are mostly automotive, with a little appliance thrown in (high temperature in stove top elements).
From their web site
AK Steel said today that it will increase transaction prices for all stainless steel automotive exhaust alloys effective with shipments on September 3, 2006. The transaction prices for types 409, 439, 15 Cr-Cbďż˝, 18 Cr-Cbďż˝ and 429 DS will increase by 30%. Transaction prices for Aluminized 409, Aluminized 439, and types 409 Ni and 410 Cb will increase by 20%. The company said that its published stainless product surcharges remain in effect.