WCA January 2016

From the Americas

In the USA, the largest steel producer and consumer of the three NAFTA countries, WSA expected a three per cent dip in demand in 2015, to 103.8 million mt, followed by a return to growth of 1.3 per cent in 2016, for a total of 105.2 million mt. (“NAFTA, US to See Steel Demand Dip in 2015, Growth in 2016,” 13 th October) At a press briefing at the conference the incoming WSA vice chairman, Nucor Corp CEO John Ferriola, said the automotive sector is among the key end-user drivers of the expected modest growth in USA steel demand. Recent estimates put production at between 17.6 million and 17.9 million cars and trucks this year, up from about 17.2 million units in 2015. While USA non-residential construction is showing “slow but steady improvement,” with growth of about five to six per cent last year, WSA took note of a “sluggish” US energy sector. Mr Ferriola said, “Almost no steel is going into the energy sector at all.” At the same press briefing the president of the German Steel Federation, Hans Jürgen Kerkhoff, said that much of last year’s likely 1.7 per cent decline in global steel consumption – to around 1.51 billion mt – could be attributed to the slowing Chinese economy. According to Mr Kerkhoff, who with JPMorgan Chase believes that steel demand in China has peaked (see “Chinese steel exports,” above), “The [Chinese] steel industry is now experiencing low growth, which will last for the time it takes for other developing regions of sufficient size and strength to produce another major growth cycle.” Meant to attract ‘the best talent in the world’ to the USA, the problematic H-1B visa programme hits another speed bump As reported by Suryatapa Bhattacharya of the Wall Street Journal ’s Delhi bureau, the USA “staged a rapid retreat” from plans to speed up the green-card application process in a way that would have been especially helpful to Indian holders of the H-1B temporary visa. This programme allows American employers to hire foreign professionals with college degrees and “highly specialised knowledge,” mainly in science and technology, to meet their needs for particular expertise. A green card certifies the holder as a lawful permanent resident entitled to reside and work in the United States. To an H-1B visa holder, a pending green card application entails certain benefits in the meantime, including job mobility and greater freedom to travel outside the United States. Additionally, the privileged status extends to the children of such applicants, even if these minors should become adults during the waiting period. The yearly cap on new green cards is 140,000. Immigration

In the first eight months, steel cargoes out of China surged 26.5 per cent to 71.9 million tons, customs data shows. China’s shipments of steel ballooned to a record in 2014 as mills – faced with shrinking domestic demand and slowing economic growth – pursued overseas sales, driving down global prices and spurring trade tensions with the USA, India and Africa. JPMorgan said steel demand in China would shrink four per cent last year and two per cent in 2016. “Booming steel exports have helped steel production hold up relatively better than steel demand, but we believe exports have reached a peak,” Daniel Kang and other analysts wrote in a 4 th October report from the New York-based banking and financial services company. Net tonnage shipped from China was expected to total 86 million last year, 87 million in 2016, and 83 million in 2017, according to the bank, which put the 2020 projected total at 90 million tons and left that unchanged through to 2035. As noted by Jasmine Ng of BloombergBusiness , mills outside China “are pushing back.” ArcelorMittal South Africa Ltd, a unit of the world’s biggest steelmaker, has asked Pretoria to extend tariffs on steel imports. And the European Union steel industry is assembling data for a complaint to the European Commission alleging that Chinese exporters are dumping hot-rolled coil in the EU. (“JPMorgan Says ‘Waves of Protectionism’ Will Cap China Steel,” 4 th October) China may try to rein in steel exports by adjusting taxes to achieve a situation that benefits both the country and its trading partners, Wang Liqun, vice chairman of the China Iron & Steel Association, told Ms Ng and other reporters in Qingdao in September. Still, shipments will surpass 100 million tons this year as overseas sales remain strong, Mr Wang said. Chinese mills are making more steel than the economy needs as they are benefiting from supplies of cheap iron ore, Lourenco Goncalves, chief executive officer of Cliffs Natural Resources Inc (Cleveland, Ohio), said in August. Bright spots in automotive and construction support a somewhat improved outlook for the steel industry of North America in 2016 From the 49 th annual World Steel Association conference, held on 12 th October in Chicago, Christopher Davis of Platts reported on a cautiously optimistic WSA short-term outlook for the steel industry in the North American Free Trade Agreement (NAFTA) region. While finished steel demand across the region – comprising the USA, Canada and Mexico – was expected to show contraction by 2.7 per cent in 2015, to 140.8 million metric tons (mt), WSA looks for growth of 2.1 per cent, to 143.7 million mt, in 2016.

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Wire & Cable ASIA – January/February 2016