The former Stelco, now a division of U.S. Steel, is in trouble. Creditor protection is the “only option”. This, on the same day as another article proclaims “Canada’s manufacturing sector posted record sales for July and topped expectations as it gained 2.5 per cent”. If they cannot make a profit when manufacturing is good, how will they fair later?
From Science Daily:
Hook and loop fasteners have become commonplace features of both industry and households. However, they have one snag: they are too weak for many applications. Hook and loop fasteners made of spring steel have now been developed at the Institute of Metal Forming and Casting of the Technische Universitaet Muenchen. These fasteners are resistant to chemicals and can withstand a tensile load of up to 35 tonnes per square meter at temperatures as high as 800°C.
Spring Steel Velco, that’s what we’re talking about here.
Temperatures in excess of 800 °C and aggressive chemical solutions do not pose any problem for Metaklett, which also offers adhesive strength of up to 35 tonnes per square meter when tensile force is applied parallel to the fastener surface. When it is applied perpendicular to the fastener surface, Metaklett can still withstand a force of seven tonnes per square meter. Moreover, like a standard Velcro® fastener on a child’s shoe, it can be opened and closed again without the help of any tools.
You can read the original press release from TUM (Technical University of Munich) in English . A German language version is also available on that page. Use the language buttons in the upper right corner.
I was surprised to find this in my inbox today. Raising prices in this economy? Whatever are the steel mills thinking?
A very slow, very tentative recovery just might be leaving the train station in the next 3 months. Let’s do everything we can to just nip that in the bud by raising prices into a slow, painful, crippled recovery!
Major steelmakers in the US have announced a series of transaction price hikes over recent weeks for strip mill products. These are steadily being implemented. There is little import competition to prevent further increases being applied. Certainly, distributors are keen for the proposed rises to take hold as they will produce benefits in terms of stock valuation. Nevertheless, market players are concerned that the price recovery might not be sustainable if the mills prematurely restart idled facilities. Service centre business is still down by 40/50 percent with only a small percent increase in activity, most probably due to the price advances. The economy remains depressed, leading to a persistently low level of steel consumption.
Canadian transaction values have bottomed, prompting us to record a number of rises this month. The domestic mills believe that destocking may be complete.
From the Hamilton Spectator (as a steel town newspaper, hardly a bystander in this arena), dated June 9th, 2009
Canada is launching a full court press in the U.S. Congress today against the Buy American provisions in the federal stimulus spending law.
The action is part of the ongoing campaign by our federal government to get the U.S. government to drop Buy America provisions that force U.S. municipalities and states to use American steel and manufacturing exclusively for projects paid by U.S. taxpayers.
The provisions are believed not to contravene international trade agreements because states and municipalities are sub-national jurisdictions and not subject to trade deals.
Sounds pretty weasily, doesn’t it? Sure we have these NAFTA provisions, and they apply to you, but they don’t apply to our states and municipalities. One wonders how Free Trade can have so many different meanings to different people.
Keeping the issue of U.S. Steel alive, the Hamilton Spectator published this letter to the editor today. An interesting aspect of the problem I hadn’t considered before.
U.S. Steel bought Stelco and made record profits last year. Then the Americans ruined the world economy and U.S. Steel shut down the Hamilton and Lake Erie works, moved all our orders — including Canadian orders — to Pittsburgh, Alabama and Indiana
[…] what follows is some discussion of how US Steel got around NAFTA rules. But the sting is in the tail
What really hurts is our Canadian-born USWA president Leo Gerard not only backs this “Buy American” approach, but used union dues to lobby Congress to get the protectionist plan passed at the expense of Canadian workers.
If it were not for Gerard, we might be actually working, making steel at Stelco, rather than hoping our EI won’t run out before we start up again.
I don’t know about all of it, but at least part of it is true. Leo Gerard was born and raised in a mining family in Sudbury.
I’d let this issue slip to the back of my mind, but re-reading a fellow steel bloggers recent postings brought it back to mind. It seems the national media have forgotten about this story, but in Hamilton it’s still in people’s minds.
From The Hamilton Spectator TheSpec.com
A single guideline in the Investment Canada Act is “probably the crux” of the dispute between U.S. Steel and the Canadian government, says Industry Minister Tony Clement.
The guideline excuses foreign buyers who are unable to fulfil their commitments under the act due to “factors beyond the control of the investor.”
The question is whether the current economic meltdown qualifies as such a factor in U.S. Steel’s shutdown of the former Stelco.
Clement sent a demand letter to U.S. Steel earlier this month after determining that the temporary closure of its plants in Hamilton and Nanticoke violates promises made under the act. He is now reviewing a response from the Pittsburgh steelmaker that is “about 87 pages in total.”
But he was tight-lipped about the contents of that document today.
“You’ll be hearing from us very shortly,” he said.
And then, again, the sounds of silence.
When US Steel announced that the former Stelco plant in Hamilton would be shut down “temporarily”, a lot of people were upset and called for action. This seems to be the first step in the action.
From the Canadian Press, via Yahoo Finance News
The Canadian government is warning U.S. Steel it must live up to production commitments at the former Stelco Inc. plants in Ontario.
Industry Minister Tony Clement said he has sent a ‘demand letter’ to the U.S. giant that it’s temporary shutdown at plants in Hamilton and Nanticoke, Ont., may be in violation of commitments it made when it bought the Canadian steel producer in 2007.
In Clement’s announcement, the minister said the demand letter is the first step in the enforcement process under the Investment Canada Act.
Remember that old Prince hit?
I was dreamin’ when I wrote this
Forgive me if it goes astray
But when I woke up this mornin’
Coulda sworn it was judgment day
As I was doing the research for this article, that tune kept going through my head. The events of the last 6 months do feel more like a dream than reality. Judgment day? We’ll talk more about that later in the update series.
Raw materials are a large component of costs for metal stampers. So what has happened to the prices of the most commonly used raw materials?
Metal stampers care most about these input costs:
something to make the steel not rust (usually zinc or nickel)
For Copper, Aluminum, Zinc & Nickel, prices are back down to 2004 levels. In a few cases, even below 2004 levels. See these charts, courtesy of Kitcometals.com
Steel prices are down below 2007 levels.
So it’s not 1999, but in a lot of ways, it’s 2004 all over again.
What does this mean for stampers? Well, a major input cost has reverted to 5 years ago levels. Is that enough to ensure a return to profitability? Not usually. Stay tuned for the next part of the puzzle.
And yet, Copper is still multiples of it’s price a mere 5 years ago.
Copper fell in London, heading for the biggest quarterly decline in more than two decades, on concern that worsening financial turmoil will slow global growth and crimp demand for industrial metals.
Copper has lost 25 percent this quarter, the worst performance since at least 1986
Of course, a one week low when it’s already too high is of more interest to speculators than manufacturers, but it is interesting to see how these things are all intertwingled.
Copper fell to a one-week low after the U.S. government’s $700 billion plan to bail out the finance industry faltered and regulators seized lender Washington Mutual Inc., raising concerns that economic growth will stall.