EuroWire July 2018

Transatlantic cable

improved after a sharp pick-up in steel prices and increased iron ore shipments helped it deliver higher-than-expected rst-quarter earnings. At that time, the group reiterated an earlier projection of 2018 global apparent steel consumption, which takes into account inventory changes, growing by between 1.5 and 2.5 per cent. (“ArcelorMittal Gives Bullish Outlook After Earnings Beat,” 11 th May) The company said demand was likely to increase this year for steel in machinery and construction amid solid expansion in the USA and Europe; while Brazil, another of its large markets, had pulled clear of a two-year recession. The spread between the price of steel and its raw materials was also healthy, ArcelorMittal said. CEO Lakshmi Mittal said in a statement that the outlook for 2018 had strengthened as the year has progressed, with the combination of growing demand and supply-side reform driving higher capacity utilisation rates and healthy steel spreads globally. † Commerzbank analyst Ingo Martin Schachel told Reuters that the ArcelorMittal results were strong at every level and mainly linked to higher pro t margins, with plants running at full capacity after capacity reduction in Europe and North America and protective trade measures already in place. “The rst quarter was better than expected and the market backdrop for the second and third quarters is better than we imagined at the start of the year,” he said. “It’s improving almost on a week-by-week basis.” † ArcelorMittal has been a vocal supporter of trade measures against cheap imports into both the USA and the European Union, where it has the bulk of its operations. “Comprehensive solution for unfairly traded imports across geographies still required,” the company declared in an overview of EU and USA measures, including the 25 per cent import tari s imposed since March by President Donald Trump, with certain temporary exemptions, such as for EU steel. An expansion-minded German auto parts maker sees two sides to Mr Trump’s steel tari s – one of them bright There has been no scarcity of negative comment in the wake of President Donald Trump’s announcement that the US would impose tari s on imported steel (25 per cent) and aluminium (10 per cent). With some exceptions, the tari s apply to steel exporting countries including Japan and China. But the German auto parts manufacturer Schae er AG provided the Wall Street Journal with an example of a company which, according to its nance chief, both su ers and bene ts from the tari s, which took e ect March 23. In an interview with Nina Trentmann, a news editor at CFO Journal , the Wall Street Journal ’s corporate nance group, the Herzogenaurach-based maker of valve trains, belt drives and wheel bearings con rmed that its USA suppliers had raised their prices. And, said Schae er’s CFO Dietmar Heinrich, “Part of the rise in prices has been passed on to us.”

The results obtained show major degradation in the cars’ safety structures. The conclusion drawn is that cars that show even super cial rust may be dangerously vulnerable in the event of a crash. Folksam said that the chance of a fatality increased by as much as 20 per cent because of the weakened structure caused by corrosion largely invisible at rst glance. The two rms subjected Mazda 6 mid-size cars and Volkswagen Golf hatchbacks to the kind of crash-testing that would have been performed when they were new, about 15 years earlier. In the videos of the experiment, the Mazdas’ rusty rocker panels crumbled in both frontal and side-impact collisions. The researchers noted as well that the cars’ chassis rails separated from the oor, their footwells ruptured, their sills gave way, and the driver and passenger-side seat mountings moved when they should have remained stationary. † This spring the German luxury automobile manufacturer Audi AG issued a recall for more than 350,000 cars and crossover SUVs in the USA whose electric coolant pumps can overheat and present a re risk. The recall period covers model years 2013 to 2017. As reported in The Car Connection (27 th April), the recalled vehicles are all powered by Audi’s turbocharged 2.0-litre inline-four engine. Although no res had been reported, the automaker told the US National Highway Tra c Safety Administration (NHTSA) that the pumps can become blocked with debris from the cooling system, or from moisture that builds up inside the pump, resulting in an electrical short. Owners were to be sent an initial recall noti cation by 11 th June, and Audi dealers will replace the pumps free of charge. Until a redesigned pump arrives at the dealerships in November, the automaker will install a newer version of the current pump if requested by the vehicle owner. Audi recalled the same vehicles in 2017. A software update was issued, but the company told the NHTSA that this did not remedy the problems. ArcelorMittal sees higher demand for steel in machinery and construction amid solid expansion in the USA and Europe As reported by Zacks on 14 th May, ArcelorMittal posted rising pro ts for rst-quarter of 2018, helped by a spike in steel prices. The Luxembourg-based steel behemoth logged net income of $1,192 million, up around 19 per cent from $1,002 million a year before. On the back of higher average steel selling prices and increased steel shipments, company revenues went up roughly 19 per cent year over year to $19,186 million in the quarter, while average steel selling prices went up around 18 per cent. Total steel shipments rose roughly one per cent to 21.3 million metric tons (mt) from 21.1 million in IQ17, supported by higher steel shipments across Europe and Brazil. A few days earlier, in a signal of the company’s con dence, Reuters reported that ArcelorMittal’s outlook for 2018 had Steel

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July 2018