September 16, 2010
TRADE WAR: USA Takes Steel, Credit Card Disputes to WTO
US Trade Rep Ron Kirk is taking two cases against China to the WTO. The first is a tit-for-tat move to impose anti-dumping and countervailing duties on imports of Chinese grain-oriented flat-rolled electrical steel or GOES. The case is on behalf of complaints by AK Steel and Allegheny Ludlum. AK Steel Holding is a private steel conglomerate that has seven plants in politically sensitive Ohio, Indiana, Kentucky, and Pennsylvania, and employs 4,900 members of Richard Trumka's AFL-CIO union. AK Steel complained in SEC filings that it was negatively impacted by Chinese duties on its GOES sales.
The second case demands access for US credit card giants to China's online processing or electronic financial services. The suit claims that China agreed to such access in 2006 although it is unclear as the China Trade Relations Act and the WTO accession agreement do not include the services...
Labels: chinese trade, exports, free trade, steel, wto
April 09, 2010
Beijing Ramps Up Heavy Industry Restructuring
The head of the policy department of the Ministry of Industry & Information Technology - one of Beijing's five "super" ministries - says a plan is underway to consolidate the power, coal, iron and steel, cement, nonferrous metal, coke, paper, leather and printing material industries. Specifically targeted is the iron and steel industry with the call to shut down furnaces less than 30 tons capacity. The plan also calls to eliminate outdated plants in the textile industry by the end of next year. The ministry warns it will take joint efforts of all government departments to achieve the aims.
The consolidation of China's massive but scattered and often inefficient heavy industrial plant is a long standing goal. It will be accomplished through corporatization of government-owned businesses and mergers and acquisitions leading to a handful of powerful industrial leaders. This is part of Beijing's overarching desire to see American style "big 3" players in all industrial sectors.
Economic restructuring is one of 5 key areas Beijing is channeling central government resources into in a bid to jump start a "third wave" in the Chinese economy. The other areas are agriculture, alternative energy, social services particularly education and health care, and "independent innovation"....
The consolidation of China's massive but scattered and often inefficient heavy industrial plant is a long standing goal. It will be accomplished through corporatization of government-owned businesses and mergers and acquisitions leading to a handful of powerful industrial leaders. This is part of Beijing's overarching desire to see American style "big 3" players in all industrial sectors.
Economic restructuring is one of 5 key areas Beijing is channeling central government resources into in a bid to jump start a "third wave" in the Chinese economy. The other areas are agriculture, alternative energy, social services particularly education and health care, and "independent innovation"....
Labels: alternative energy, clean tech, high-tech, investment, reform, steel
December 30, 2009
TRADE WAR: USA Imposes Countervailing Duties on Chinese Steel Pipe
The quasi-independent USA federal International Trade Commission voted unanimously today to impose countervailing duties on imports of Chinese oil country tubular goods. Although Chinese imports amount to less than 25% of America's consumption of the goods in terms of value and under 1/3 overall, the ITC ruling means that the Obama administration believes domestic industry is threatened by Chinese imports. The original petitioners were US manufacturers and the United Steelworkers union. The duties are intended to protect 5,819 jobs in 8 states including political swing state Ohio....
Labels: chinese trade, free trade, steel
December 29, 2009
TRADE WAR: Anti-Dumping Duties of 145% on Steel Grating China-Wide
The US Department of Commerce's International Trade Administration imposed anti-dumping duties of 145.18% on imports of Chinese steel grating in a ruling released today. The mandatory respondent - Ningbo Jiulong Machinery Manufacturing Company, Ltd., alone received an extra duty of 14.36%. The petition was brought by American steel makers Alabama Metal Industries and Fisher & Ludlow.
Alabama Metal Industries was acquired in 2005 by steel conglomerate Gibraltar Industries (NASDAQ: ROCK) whose shares rose today. Gilbraltar's major owners (apart from institutional holders such as mutual funds) are Brian Lipke, CEO and Chairman of the Board since Gibraltar's beginning in 1972, and Lipke family members. Lipke lavishes contributions on politicians of all stripes including Democratic Senator Chuck Schumer of New York (where Gibraltar is based). Imports of steel grating from China increased from $8.8 million (US dollars) to over $90 million between 2006-2008.....
Alabama Metal Industries was acquired in 2005 by steel conglomerate Gibraltar Industries (NASDAQ: ROCK) whose shares rose today. Gilbraltar's major owners (apart from institutional holders such as mutual funds) are Brian Lipke, CEO and Chairman of the Board since Gibraltar's beginning in 1972, and Lipke family members. Lipke lavishes contributions on politicians of all stripes including Democratic Senator Chuck Schumer of New York (where Gibraltar is based). Imports of steel grating from China increased from $8.8 million (US dollars) to over $90 million between 2006-2008.....
Labels: chinese trade, free trade, steel
December 14, 2009
80% of Chinese Steel Mills Could Close
Draft regulations posted last week by Beijing's Ministry of Industry and Information Technology recommend closing all steel mills under 1 million metric tons capacity and all specialty steel mills producing under 500,000 metric tons. In addition new environmental requirements will restrict waste water and sulphur dioxide emissions and the amount of coal per ton of steel. It is estimated only 80 of the up to 400 steel mills in China can meet the new regulations. Earlier this year the powerful National Reform and Development Commission decreed that consolidation must occur in China's huge but fragmented steel industry.
If the measures are implemented and successfully enforced it will have wide ranging impacts on global trade and pricing for several industrial commodities including iron ore, coal, nickel, and the export and import of steel products....
If the measures are implemented and successfully enforced it will have wide ranging impacts on global trade and pricing for several industrial commodities including iron ore, coal, nickel, and the export and import of steel products....
Labels: foreign trade, investment, steel
November 05, 2009
TRADE WAR: 438% Countervailing Duties on Imports of Chinese Wire Decking
In yet another victory for the US Steelworkers union, the Obama administration this week announced determination of countervailing duties up to 473.73% on imports of wire decking - a steel-derived product used in commercial and industrial storage rack systems - from China. The huge duties imposed by the Commerce Department are reserved for the many Chinese companies that did not submit paperwork to Commerce in a timely manner. Other Chinese exporters including named firms Dalian Huameilong Metal Products and Dalian EastFound Metal Products will face extra duties between 2.02 to 3.13 percent.....
Labels: chinese trade, foreign trade, free trade, steel
October 30, 2009
TRADE WAR: US ITC Sides with Steelworkers Union on Chinese Seamless Pipe
The quasi-independent US International Trade Commission (ITC) sided unanimously today with US Steel Corp. (NYSE: X) and co-petitioner United Steel Workers union to allow the US Commerce Department to continue its work toward determining anti-dumping and countervailing duties on imports of Chinese "seamless SLP pipe". Determination of anti-dumping duties must be reported by February 23, 2010.
If duties are imposed it will show Beijing that the Obama administration remains Janus-faced in its trade relations particulary as this news comes a day after important advances were made by the Commerce Department in China.
The pipe is primarily used for pipelines by the oil and gas industries. The ITC says Chinese manufacturers are subsidized and claim US producers are under threat from the imports. American companies imported $412 million worth of the pipes last year. How many America jobs are stake? The number is withheld by the trade commission as "proprietary information."
If duties are imposed it will show Beijing that the Obama administration remains Janus-faced in its trade relations particulary as this news comes a day after important advances were made by the Commerce Department in China.
The pipe is primarily used for pipelines by the oil and gas industries. The ITC says Chinese manufacturers are subsidized and claim US producers are under threat from the imports. American companies imported $412 million worth of the pipes last year. How many America jobs are stake? The number is withheld by the trade commission as "proprietary information."
Labels: foreign trade, free trade, imports, steel
September 10, 2009
Trade War: USA Imposes Extra Tariffs on Chinese Steel Goods
The US Commerce Department slapped imports of Chinese oil country tubular goods - steel pipes used in the oil industry - with countervailing duties over 30% until a final rule is made on a dispute reported on previously here.
Meanwhile the "Summer Davos" meeting of the World Economic Forum has opened in Dalian, China, with a round of America bashing. Bank of China President Zhu Min criticized the attitude on Wall Street as over-confident and as though the "crisis never happened." Morgan Stanley Asia head Stephen Roach believes there are good odds the USA may lead the world back into recession....
Labels: foreign trade, free trade, steel
August 26, 2009
Beijing Pops Bubbles
Concerned about overcapacity and overinvestment in certain sectors, Beijing has put the following industries on notice: steel, cement, plate glass, coal chemical, poly silicon (the key component in solar panels), and wind power. All will be "guided" by relevant government departments in the following areas: market access (share issues & loans), land use (access and sales), and environmental supervision (pollution control). Lately, overcapacity in the solar sector has been an issue globally with excess supply bringing down prices. Look for greater consolidation in these industries and with luck the grooming of major potential Chinese multinational corporations.....
Labels: clean tech, economy, investment, steel
July 10, 2009
EU Backs Down on Chinese Steel Pipe
Word from the G8 summit is the European Commission will end the anti-dumping duties on steel pipe products from China imposed in April. A similar move from the Obama administration is doubtful as the Democratic Party yields to the demands of American steel unions and companies....
Labels: free trade, steel
June 30, 2009
Beijing Ready to Back Down on Iron Ore Contracts?
Reuters reports that the Chinese financial mag Caijing quotes anonymous sources at a closed session of the China Iron and Steel Association saying that as the June 30 deadline will soon pass the desired price cuts for iron ore will have to be reexamined. The report notes that Beijing still expects better than the 1/3 off Japan got....
Labels: foreign trade, steel
June 23, 2009
TRADE WAR: WTO Complaint Filed on China Exports Controls
The Obama administration and the EU are joining forces to (try to) prop up their ailing steel industries. WTO complaints filed today claim Beijing has imposed restraints on exports of key raw materials for steel making also used in aluminum and chemical processing. Key issue, China's control of global coke production and Beijing's ability to reduce supply for non-Chinese companies. This will be an interesting case to watch.....
Labels: free trade, steel
May 29, 2009
TRADE WAR: US Steel Strand Makers File Suit
Three American manufacturers of PC steel strand located in three impoverished counties in Ohio, Tennessee, and North Carolina, have filed an anti-dumping and countervailing duty suit against imports of Chinese PC steel strand. Decision to pursue will come within 45 days. The petitioners are American Spring Wire Corp. of Bedford Heights, Ohio, (poverty rate in '07 was 15.7%), Insteel Wire Products Co. of Mt. Airy, North Carolina, (in '07 17.5% mired in poverty), and Sumiden Wire Products Corp. of Dickson, Tennessee, (over 12% poverty rate back in 2007).
PC steel strand is used in pre-stressed concrete materials important in infrastructure projects such as bridges and foundations. Just 2 weeks ago, the European Union imposted duties of up to 46.2% on Chinese steel strand for the next 5 years....
Labels: foreign trade, free trade, steel
May 22, 2009
TRADE WAR: ITC Rules in Favor of US Steelmakers
The quasi-independent International Trade Commission has ruled unanimously in favor of an anti-dumping countervailing tariff suit brought by US Steel and other American steel producers against imports of oil country tubular goods such as steel pipe from China. Next step is a determination by the US Dept. of Commerce on how much tarrif to apply - could be as high as 90% or more. After that, expect heavy handed retailiation from Beijing, higher prices for US buyers of the product which they will pass on to consumers causing inflation, and then relocation of source material from another country such as India until the next complaint is filed by an American steel company. Rinse. Repeat.
My original report on this story when it the challenge began is linked here....
Labels: free trade, steel
April 09, 2009
USA Steelmakers File AntiDumping Complaint on Chinese Steel Pipe
US Steel and seven other steelmakers have filed a petition of countervailing duties and antidumping with federal authorities against importation of Chinese oil country tubular goods (steel pipe, etc.). A preliminary determination is due May 26. Duties could be assessed on the alleged margins ranging from 40 to 90%. Tit-for-Tat trade disputes are never productive. If successfuly, American importers will simply source the products from a non restricted source country (until those producers get slapped with extra duties and fines)...
Labels: foreign trade, free trade, steel
December 30, 2008
China Steel Continues Consolidation
The Hebei Iron & Steel Group is further consolidating and will now have one listed entity after Tangshan Iron & Steel buys the shares of Handan Steel and Chengde XinXin to form one mega company.
China's steel industry is consolidating as part of a larger plan to center important industries around 1 to 3 core businesses. The overall scheme of the State Council is to corporatize the Chinese economy into a mostly private oligarchy but with significant state control.
Labels: steel
October 14, 2008
China Steel Sector Collapsing
Steel prices in China have fallen 12% over the past week and all major steel producers are scaling back production around 20% possibly through the end of the year. Steel makers are facing a dramatic decline in orders and their supply chain is affected down to the iron ore mines. Australian mines' orders are being cancelled and many older steel manufacturing areas in China such as in Henan Province are shutting down. In the US, scrap dealers are seeing exports dwindle and demand from China dry up.
If the global economy doesn't pick up and boom again, China's steel industry may become the first great victim of the Panic of '08. If so, I expect many of the older steel centers of China will not reopen and further consolidation in the industry through mergers and acquisitions.
Labels: australia, foreign trade, panic of 2008, steel
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