TPT May 2013

Global Marketplace

Europe threatens to expand tariffs on steel pipes from China The European Union on 18 February opened an inquiry into whether Chinese producers sell seamless pipes and tubes (stainless steel product excluded) with an external diameter exceeding 16" below cost in the 27-nation bloc. The EU already imposes anti-dumping duties on imports of Chinese seamless pipes and tubes under 16", and of stainless steel seamless pipes and tubes. Those two sets of levies were imposed in 2009 and 2011, respectively, after dumping probes. According to the Official Journal of the European Commission, the Brussels-based trade authority of the EU, the new investigation will determine whether shipments from China are “being dumped and whether the dumped imports have caused injury” to the EU industry. The probe stems from a 3 January dumping complaint by an industry group on behalf of producers that together account for more than 25 per cent of EU output of seamless pipes and tubes of the specifications cited in the 18 February announcement. The EC did not identify the complainant companies. The EC has nine months within which to decide whether to impose provisional anti-dumping duties for half a year. EU governments have 15 months to decide whether to apply “definitive” levies for five years. Elsewhere in steel . . . › According to the latest report from the World Steel Association, global crude steel production rose from 121.3 million tons in December to 125 million tons in January. Total steel output for the 62 countries tracked by Brussels- based Worldsteel – which represent roughly 85 per cent of global steel production – was up 0.8 per cent from the total for January 2012. The data indicates that steel production continues to track upward in most of the major steel producing regions of the world. In 2012, global steel production hit an all-time high of 1.55 billion tons, a 1.2 per cent gain over the prior year despite overall annual declines in South America and the 27 countries of the European Union. Steel output from China, the world’s largest steel producer, climbed to 59.3 million tons in January 2013, up from 57.7 million tons in December and 4.6 per cent above the total for January 2012. Despite these gains, Chinese steelmakers are believed to remain vulnerable to unsteady demand and the long-term problem of overcapacity. › On 19 February, Enterprise and Industry Commissioner Antonio Tajani of the European Commission announced that he had obtained a commitment from Lakshmi Mittal, president of the steel group ArcelorMittal, to a moratorium on restructuring until June, when the EC is to adopt an action plan for the steel sector. Following a 12 February meeting of

The Roundtable on the Future of the European Steel Industry, Mr Tajani had asked ArcelorMittal to suspend restructuring measures while waiting for the EU strategy to be published. The company agreed to keep open its sites at Florange, France, and Liege, Belgium, while cutting back capacity at both. The French and Belgian governments will inject $240mn into Florange and $186mn into Liege, with the investment plan calling for the two sites to specialise in top-of-the-line products. Workers affected by the reduction in capacity will have the option of moving to other ArcelorMittal sites. Urging member states, industry, and trade unions to work together, Mr Tajani said, “I cannot – neither do I want to – interfere with companies’ decisions. But I can emphasise the importance of the action plan we are preparing, which will contain useful measures for the steel sector.” › BlueScope Steel Ltd reported a sharp narrowing of its first- half net loss as the company reaped the early benefits of restructuring and profited from the start of a recovery in the US building industry. On 17 February, Australia’s largest steelmaker by market value unexpectedly reported a first-half profit and, for the first time since onset of the global financial crisis, foresees a full-year profit. The announcement prompted a jump of 15 per cent in shares in the Melbourne-based steelmaker, closing at a 16-month high in Sydney. As noted by Matt Chambers in The Australian (18 February), Bluescope is predicting a domestic steelmaking revival after low demand, high costs and a strong Australian dollar forced it to halve its capacity, shut down its export business and slash jobs over the past four years. Company CEO Paul O’Malley expressed confidence that the headwinds will show signs of easing around the end of 2013. Automotive in brief . . . › On 28 February the Opel unit of General Motors Co of the US reached an agreement with workers at its Bochum car plant in Germany to keep production going until the current Zafira model is phased out at the end of 2016. About 3,000 people work at the factory, one of four Opel plants in Germany. When car production ends, the company said, it wants to keep its warehouse at Bochum and convert the site into a components plant, securing about 1,200 jobs. Opel said the agreement rules out compulsory layoffs to the end of 2016. However, with this year’s second quarter it plans to cut one of three daily shifts at Bochum and said it would offer severance packages and partial retirement programmes to 700 employees. Germany accounts for more than half of Opel’s 37,000-strong European workforce. › Ford Motor Co on 21 February said it will invest nearly $200mn in its Cleveland engine plant to build a 2 litre version of its popular turbocharged engine for the company’s North American lineup. Ford’s factory in Valencia, Spain, currently builds the engine for North America and Europe. The

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May 2013