EoW September 2013

Transatlantic Cable

In the rst four months of 2013 these shipments jumped 33 per cent (to 480,095 tons) from a year earlier. The increase is particularly striking because total US steel imports for the period fell 17 per cent, to 10.6 million tons. US steel mills, meanwhile, have been less and less active. As of 15 th June, domestic production had fallen to 76.7 per cent of capacity, from 78.8 per cent a year earlier. In 2012, the US produced 88.6 million tons of steel: 5.7 per cent of the world’s total. Bill McEleney of the National Steel Bridge Alliance (Omaha, Nebraska), whose members make bridges and bridge parts, said many US companies can build bridges; but not many are experienced with the at-deck design being used these days to build or renovate heavily tra cked bridges. In rapidly urbanising China, such construction is booming. “The Chinese are building many more of these kinds of bridges, so they have more fabricators,” Mr McEleney told the WSJ . Most of the steel coming in from China now goes into projects like bridges and buildings: “sweet spots,” according to the WSJ , for Nucor Corp, the third-largest US steelmaker, which makes half of its steel for the construction industry. “Construction is essential to our business,” said Dan DiMicco, Nucor’s chairman and former chief executive. While construction steel commands less of a premium than automotive steel, it is one of the biggest steel markets in volume terms. † It is also one that domestic steelmakers are looking to for growth in the wake of several high-pro le bridge collapses and calls to boost infrastructure spending, and in anticipation of a rebound in the large private and civic projects which consume 70 per cent of the steel used in construction. Wrote the WSJ reporters: “The surge in Chinese imports is threatening those hopes.” † For its part, the China Iron and Steel Association seems unaware of any home-court advantage deriving from expertise in bridge work. In its view, growth is a simple matter of supply and demand, and Chinese steel exports have been rising because Chinese steelmakers are more competitive. “Why is it that we can export more?” mused Li Xinchuang, the trade group’s deputy secretary-general. “It’s because of competitiveness on price and service.”

Steel

Specialisation in steel-intensive bridge projects enables Chinese producers to step up their exports to the United States “The Verrazano-Narrows Bridge was a feat of American engineering when it was built across New York’s harbour in the 1960s. Now, it is being repaired with steel made in China.” John W Miller and Chuin Wei-Yap of the Wall Street Journal would give other examples of a Chinese presence in important US undertakings, including the San Francisco-Oakland Bay bridge replacement described in our last issue (“Bay Bridge’s broken bolts,” EuroWire , July 2013). Cheap steel from China obviously has its appeal for price-conscious project managers. But the reporters also cited another reason for the current surge of Chinese steel imports into the US, even as domestic producers “are awash with” excess capacity: the relative scarcity of American contractors with expertise in specialised projects like bridges. (“US Icons Now Made of Chinese Steel,” 19 th June). The example of the Verrazano-Narrows – the longest suspension bridge in the US- is instructive. Last year, New York’s Metropolitan Transportation Authority (MTA) awarded a $235.7 million contract for its repair to Tutor Perini Corp, a California contractor. Tutor Perini subcontracted the fabrication of steel decks to China Railway Shanhaiguan Bridge Group, which the MTA says is using 15,000 tons of steel plate made by China’s Anshan Iron & Steel Group. The decks will replace the concrete-paved upper roadway of the two-level bridge. The MTA said it had tried to nd a contractor whose bid for the project incorporated American-made steel. But, an MTA spokesperson told the reporters, there was only one such bidder: Structal-Bridges, Canada’s largest steel bridge manufacturer, with facilities in both the US and Canada. Its bid was twice Tutor Perini’s. Even so, MTA o cials said, price was not their sole consideration. They told the WSJ that Chinese companies have become specialists in making parts for bridges being built or renovated across the United States. Supply and demand? Or skill? Messrs Miller and Wei-Yap said the bridge work is one of the reasons for the current surge of Chinese steel into the US.

Image: www.bigstockphoto.com Photographer Zsolt Ercsel

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September 2013