EuroWire November 2017

Transatlantic cable

Eric Onstad, of Reuters , reported that August was set to mark record volumes, with 229,110 metric tons of scrap and 50,600mt of rebar traded in the rst half of the month. The half-month tonnages for August were close to the full month totals for July: 259,040mt of scrap and 52,210mt of rebar. And the July volumes represented a surge of 42 per cent and 66 per cent respectively from June. The LME’s steel scrap and rebar contracts have steadily gained volume since their launch in November 2015. Mr Onstad noted, however, that traders and merchants are the most active users, re ecting the resistance of some steelmakers to bringing in speculators for fear of market disruption. He wrote that, before the LME contracts were launched, “Voestalpine, SSAB and Salzgitter told Reuters they would not be using the contracts, while others such as Germany’s ThyssenKrupp had said they would take a wait-and-see approach.” Even so, the success of the LME contracts is in marked contrast to the previous LME physically delivered steel billet contract, which the LME scrapped in April after failing to trade since June 2015. According to Reuters , one reason the new contracts have gained momentum is that they are monthly and cash-settled. Other factors include benchmark ferrous contracts in Asia, with millions of lots traded daily, which have been volatile as the Chinese government seeks to impose capacity limits to curb industrial pollution. † According to the LME’s Mr Xodo: “Given the very high volatility of steel prices in recent years, many [steel mills] are now exploring ways to integrate hedging in their operations.” Mr Xodo said the LME had received requests to launch other ferrous contracts, especially in hot rolled coil. “We have already seen mills from several countries making enquiries around hedging steel prices with LME futures,” he told the Reuters forum. “And many are even dipping their toes by doing test trades.” A Paci c Coast bridge project taps OldWorld inventiveness (and patience) to launch 310-foot steel girders across a canyon “This method is used extensively in Europe and also in Canada,” David Galarza, an overseer for the California Department of Transportation (Caltrans) of a bridge building project in the San Francisco Bay area, told the Monterey Herald . But, he added, the new Pfei er Canyon Bridge, in Big Sur, represents the rst instance in which “this method” has been employed to install girders for a bridge in California. As reported by the Herald’s Tommy Wright, the building crews erected a temporary tower at the centre of the canyon to support the weight of the 310-foot steel girders to be launched across the gap. Rollers and guides atop the tower reduced friction and ensured proper alignment of the girders as they were pulled across. Rollers were also in place on the abutments on both sides of the canyon. The two synchronised jacks, each of which can pull up to 235 tons, spooled up to pull the steel girders from north to south across the canyon.

or prior, either petrol or diesel. The discount covered all Fiat-Chrysler brands including Fiat, Alfa Romeo, Jeep, Abarth Fiat, and the entire Fiat range of commercial vehicles. Mercedes o ers $2,390 to owners of Euro 1 to Euro 4 diesels trading in their cars for hybrid or diesel Mercedes models, or $1,195 if they choose an all-electric Smart Electric Drive. A Mercedes caveat is that the traded car must have been owned for at least six months, presumably to foil opportunists who purchase old diesels for purposes of the incentive programme. “The spate of scrappage schemes is a result of a diesel summit held between manufacturers and the German government,” wrote Mr Beckwith. “BMW has expanded its trade-in scheme to the UK. Volkswagen Group is currently weighing up a proposal to bring its scheme to the UK.” (“Opel, Fiat-Chrysler and Mercedes-Benz Launch Diesel Trade-In Scrappage Schemes,” 11 th August) AutoCar also reported that Ford is understood to be implementing a similar strategy in Germany, even as the brand’s Mondeo 2.0 TDCi is under investigation by German authorities looking into allegations of an emissions cheat device. † In the USA, John Voelcker of Green Car Reports provided context by noting that, almost two years ago, the Volkswagen diesel emission scandal burst into public view. “Nothing,” he said, “has been quite the same since then.” Real-world emissions on European tests proved to be far higher than the legal limits, although all the vehicles sold were certi ed as compliant under some rather narrow interpretations of test procedures. Only this year did European emission standards for diesels tighten to match the USA standards in e ect since 1 st January 2008. That means, Mr Voelcker wrote (11 th August), “that a lot of the diesel cars sold in EU countries over the last ten years were too dirty to sell in North America.” † If the Europeans were slow to give up their fealty to diesel, they are apparently now determined on a di erent course. BMW and Ford in Europe are reportedly close to launching their own buybacks. According to Green Car Reports , many if not all carmakers seem likely to extend their buyback programmes from Germany to the UK and beyond. Tagespiegel also reported that Opel would be retro tting Euro 5 and 6 standard cars with software that would reduce emissions. Suggesting a broad consensus in favour of reform, multiple European cities have proposed banning older vehicles and various diesels from city centres altogether.

Steel

Traditionally conservative steelmakers may be awakening to the attractions of futures and hedges

“There has been a fundamental shift in the attitude of steel mills,” Alberto Xodo, deputy head of London Metal Exchange ferrous, told the Reuters Global Base Metals Forum on 22 nd August. Many steel mills, which tend to avoid steel futures, have become more open to hedging and have been experimenting with contracts in recent months, the LME executive said.

32

www.read-eurowire.com

November 2017