EuroWire July 2018

Enthusiasm, energy and optimism...wire 2018

If enthusiasm and energy are anything to go by, then wire 2018 in Düsseldorf, Germany, will be seen as a benchmark for the industry. Comments such as “This, in many ways, was the most successful wire show that I’ve attended” speak volumes for the week-long exhibition. And other companies were equally happy to praise the 2018 show. Increases in both visitor numbers – especially managers and senior executives – struck a chord with French company Condat, who also noticed a leap in visitors from North America and India, which mirrored an increase in business in those regions. That optimism clearly translated itself into enquiries, potential orders and sales as wire and cable businesses encamped themselves along the shores of the Rhine during April.

There is other news from Messe Düsseldorf, organisers of the exhibition. The company has announced the appointment of Wolfram Diener as its new managing director from 1 st October. Mr Diener, who has extensive experience in the trade fair business, replaces Joachim Schäfer, who is retiring from the company. More details can be found on page 15.

The creation of 2,200 new jobs by Leoni in Serbia (page 16), continuing expansion in Italy for Fainplast (page 12), and the purchase of Setic and Pourtier by Sampsistemi (page 9) are other highlights in this issue.

David Bell Editor

Our review of the show starts on page 32.

Publishing Team

Editor:

................................................................................................................................David Bell

Features Editor (USA):

.....................................................................................................................Dorothy Fabian

Editorial Assistant:

..................................................................................................................Christian Bradley

Design/Production:

............................................................................................................................Julie Tomlin

Production:

..............................................................................................................................Lisa Wright

Sales & Marketing: UK & ROW sales.............................................................................................Jason Smith (International) Italian speaking sales...................................................................Giuliana Benedetto Chinese speaking sales ............................................................................................Linda Li Advertisement Coordinator: ..............................................................................................................................Liz Hughes Accounts Manager: ................................................................................................................................ Julie Case Subscriptions: ................................................................................................................................Julie Case Publisher: ....................................................................................................................Caroline Sullens Founder: ..........................................................................................................................John C Hogg

* US$33 purchase only Front cover: Beneke Wire Company See page 63 for further details US copies only : EuroWire (ISSN 1463-2483, USPS No: 022-738) is published six times a year, January, March, May, July, September and November by Intras Ltd and distributed in the USA by UKP Worldwide, 3390 Rand Road, South Plain eld, NJ 07080. Periodicals postage paid at Rahway, NJ and at additional mailing o ces. POSTMASTER : Send address changes to EuroWire, Intras Ltd, C/O 3390 Rand Road, South Plain eld NJ 07080. www.read-eurowire.com © 2018 Intras Ltd, UK ISSN 1463-2438

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July 2018

Contents

July 2018

Photo courtesy Messe Düsseldorf/CTillmann ©

Regulars

Market News

8

Diary of events

Deutsch Inhalt 42

Neuigkeiten

63

Inserentenverzeichnis

9

Corporate News

Содержание на русском языке 46 Ηοвости рьінка 63 Перечень рекламодателей

22

Transatlantic Cable

Sommaire Français 50

26

Technology News

Nouvelles du Marché Index des Annonceurs

63

32

wire 2018 Review

Indice Italiano 54

Notizie del Mercato

63

Indice degli Inserzionisti

63

Editorial Index

Indice Español 58

Noticias de Mercado Indice de Anunciadores

63

Advertisers Index

63

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July 2018

Next Issue GettingTechnical Alternative to soldering: Back-cast resistance welding electrodes made of tungsten and copper

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ensure optimum current transfer Feature wire China 2018

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Technical Articles

40

52

Revolutionising the wire manufacturing process By Rupert Parmenter, Sicme Italia Impianti Srl, Italy

Révolution du processus de fabrication du l Par Rupert Parmenter, Sicme Italia Impianti Srl, Italie

44

56

Drahtfertigungsverfahren wird revolutioniert von Rupert Parmenter, Sicme Italia Impianti Srl, Italien

Il processo di fabbricazione del lo viene rivoluzionato A cura di Rupert Parmenter, Sicme Italia Impianti Srl, Italia

48

Радикальное изменение технологии изготовления проволоки Руперт Парментер, Sicme Italia Impianti Srl, Италия

60

Revolucionando el proceso de fabricación de alambre Por Rupert Parmenter, Sicme Italia Impianti Srl, Italia

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July 2018

Dates for your diary. . .

2018

October

14–17 October: IWCS – symposium and trade exhibition –

Rhode Island, USA Organisers : IWCS Tel : +1 717 993 9500 Email : phudak@iwcs.org Website : www.iwcs.org

November

27–29 November: wire India – trade exhibition – Mumbai, India Organisers : Messe Düsseldorf India Pvt Ltd Fax : +91 112 697 1746 Email : info@wire-india.com Website : www.wire-india.com

2019

February

28 February-2 March: TEL – trade exhibition – Istanbul, Turkey Organisers : Voli Fuar Hizmetleri

Fax : +90 212 604 5051 Email : info@voli.com.tr Website : http://tel-fair.com

March

5-7 March: Cables 2019 – conference and technical programme – Düsseldorf, Germany AMI Cables – conference – Düsseldorf, Germany Organisers : AMI Tel: +44 117 314 8111 Website : www.ami.international

wire China 2018 26–29 September: wire China – trade exhibition – Shanghai, China Organisers : SECRI and Messe Düsseldorf (Shanghai) Co Ltd Fax : +86 216 169 8301

May

13-16 May: Interwire – trade exhibition – Atlanta,

Georgia, USA Organisers : Wire Association International Fax : +1 203 453 8384 Email : sales@wirenet.org Website : www.wirenet.org

Email : shanghai@mdc.com.cn Website : www.wirechina.net

Photo credit: bigstockphoto.com “Aerial view of Shanghai City centre at Sunset, Shanghai, China” Photographer: Breev Sergey

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July 2018

Corporate News

▲ ▲ Pictured are the Sampsistemi offices. The acquisition supports the company’s strategy of leading the market and meeting the ongoing demand for a single-source provider

Sampsistemi acquires Setic and Pourtier

machines and services, while a stronger organisational structure will bring the company closer to its clients. The acquisition is entirely complementary, in terms of portfolio, know-how and technology, guaranteeing the most cost-effective solutions to clients. The existing Setic and Pourtier product portfolio will be ensured and further enhanced, as well as the fast and easy supply of original spare parts, updated technical drawings and machine software. Sampsistemi is a company of the Maccaferri Industrial Group, an international holding active in seven main sectors, boasting a turnover of €1.2 billion, 58 production plants and 4,600 employees worldwide. Sampsistemi Srl – Italy Website : www.sampsistemi.com

Throughout its 80 years of history Sampsistemi has always believed that new ideas and effective processes are the key drive to a company’s continuous growth and development. “Setic and Pourtier are an exciting opportunity for our group,” said Lapo Vivarelli Colonna, CEO of Sampsistemi. “We are confident that our joined forces will greatly strengthen and expand our product range in the wire and cable machinery industry. “The acquisition of Setic and Pourtier supports Sampsistemi’s strategy aiming at leading the market and meeting the ongoing demand for a single-source provider capable of managing the client’s process with cutting edge solutions.” benefit from a more focused approach and a new technological boost concerning Customers worldwide will

DRAWING and extrusion technology specialist Sampsistemi has acquired Setic, Pourtier and their service division C2S. The combined resources will greatly enhance the capability to offer a complete range of products able to match the evolving needs of wire and cable makers on a global basis. Setic and Pourtier, two well-known French companies, are part of the Gauder Group, with more than 100 years of combined experience in the design and manufacture of high technology rotating equipment, and will contribute in further developing and strengthening Sampsistemi’s overall process focus and expertise. The C2S service division will boost the ability to support all customers worldwide, with prompt and dedicated solutions.

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Corporate News

EJP has received an order from Russian OJSC MMK-Metiz for the supply of two drawing lines to be installed at the Magnitogorsk works. One is a combined drawing line for bright steel with diameters between 8 and 30mm. The 30-ton drawing line will be equipped with a driven cold rolling stand in order to be able to produce square bright steel sections from round input stock. The second line is a chain draw bench line for the production of bars with diameters of up to 68mm. With the new lines, which will come with a number of innovative features, MMK-Metiz is going to expand its product range, among others, towards larger diameters. The product quality will give a straightness tolerance of 0.1mm/m and diameter tolerances of h8 and h9. The new lines will boost output by approximately 15 tons per hour of bright steel products. With a drawing force of 30 tons and drawing speeds of up to 80m/min, the combined drawing line CDS 300 will produce finished bars in diameters from 8 to 30mm – from coil-to-bar, from coil-to-coil or bar-to-bar, as desired. EJP is going to install a driven cold rolling stand between the blasting plant and the drawing machine. The function of the rolling stand is to pre-form the material so that it will be possible to directly draw from round to square. The high-precision drive control will make the forming process more controllable than previously. EJP will be the general contractor for the supply of the two lines. Installation is scheduled to take place in Autumn this year with commissioning in spring 2019. Two new drawing lines for MMK-Metiz Solution Award after high-speed success German condition monitoring systems and alignment products manufacturer Prüftechnik is having a bright spring with the new Vibscanner 2 just having been honoured as a Solution Awards winner 2018 by www.reliabilityweb.com After just having won the highly prestigious Red Dot Design Award this is another major award the new high-speed Vibscanner 2 has achieved after a few months of being on the market. The new data collector was only released in February and has already been successful, winning the asset condition management award at the Solution Awards 2018. The new Vibscanner 2 is a unique measurement device with which even untrained personnel can easily and effectively measure machine vibration on rotating equipment. Thanks to its forward-looking measuring principle and data acquisition on three axes with the triaxial sensor, all condition information is collected at the touch of a button. Prüftechnik Dieter Busch AG – Germany Website : www.pruftechnik.com EJP Maschinen GmbH – Germany Website : www.ejpmachines.com

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Corporate News

Fainplast expands again in Ascoli Piceno ▲ ▲ The Fainplast site in Ascoli Piceno

FAINPLAST has started a new expansion of its production plant in Ascoli Piceno, Italy. Currently under construction, the new building is situated next to the existing factory. Ahead of the construction, two new bridges were built over a small river dividing the two areas. 7,000m 2 of the new building will be dedicated to warehousing and production, while 1,200m 2 will be available for new offices and laboratories. The total investment for the new facility is around €5m. The purpose of this new expansion is to increase the production capacity of Fainplast’s polyolefin-based compounds and keep pace with the halogen-free cables market. Further investments have been put in the budget and two new compounding lines have already been ordered. These lines will be installed into the new building by the end of 2019. Additionally, the new facility will increase the total storage space of the company and improve the logistics of raw materials and compounds. Overall, these investments together with others already on Fainplast’s long-term industrial plan should bring an increase in the production capacity of almost 50,000 metric tons within the next five years. Mr Faraotti, general manager and owner of the company, said: “We strongly believe in what we are doing and will go ahead rapidly on the road that we have already traced for years. I am confident in our employees, and I think that these investments, together with their competence and continuous dedication, can only lead to more success in the years to come.”

Fainplast Srl – Italy

Website : www.fainplast.com

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Corporate News

Queen’s Award for Enterprise for Central Wire

Now in its 52 nd year, the Queen’s Award for Enterprise is the most prestigious business award in the United Kingdom. CWI UK will receive the award with trophy during a royal reception for Queen’s Award winners at Buckingham Palace this summer. Central Wire Industries UK Limited – UK Website : www.centralwire.com

CWI has a wide range of high performance speciality alloys in nickel, stainless and red metal, and cable products, which are used in multiple industries worldwide, including oil and gas, medical, aerospace, automotive and marine. CWI UK’s wire drawing and wire rolling operations manufacture round and profile forms in more than 50 different alloys.

CENTRAL Wire Industries UK Limited has been awarded the 2018 Queen’s Award for Enterprise in the category of International Trade. With facilities in Rotherham, UK, CWI UK is a manufacturer of stainless steel and nickel-based alloy wires. The award recognises the company’s 92 per cent growth in export sales in the last three years. James Roper, managing director of CWI UK Ltd, said: “I am absolutely delighted that Central Wire Industries UK Ltd has won the prestigious Queen’s Award for Enterprise. “The winning of this award gives recognition to all the hard work and commitment given by each of our employees both past and present.” From Canada, Central Wire Industries Ltd president and CEO Paul From agreed: “It is very exciting, and I attribute the success in whole to the UK team.” Currently, CWI UK employs 57 people. It is part of the Central Wire Industries Ltd group of companies headquartered in Ontario, Canada.

▲ ▲ A CWI UK worker at the plant in Rotherham, UK. Photograph courtesy of CWI

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Corporate News

Newmanaging director at Messe Düsseldorf

MESSE Düsseldorf GmbH – organisers of the leading trade exhibitions for the wire and cable industry, include wire and Tube – has appointed a new managing director. Wolfram Diener will take over the role on 1 st October following the retirement of current managing director Joachim Schäfer. The appointment follows a meeting of the company’s supervisory board in May, headed by chairman Lord Mayor Thomas Geisel. Mr Diener will take over the divisions that Mr Schäfer has been responsible for since 2006: the Global Portfolios Health and Medical Technologies (MEDICA, COMPAMED, REHACARE International) and Metals and Flow Technologies (GIFA, Thermprocess, Newcast, Pump Summit, Valve World Expo, METEC, wire, Tube), the leading trade fair trio Beauty Düsseldorf, Top Hair – Die Messe with the make-up artist design show, A+A – Safety, Health and Security at Work, glasstec as well as the trade fair duo Caravan Salon Düsseldorf/TourNatur. Furthermore, he will be in charge of the business division “Digital Strategy and Communication”, newly established in 2017, encompassing the IT and inhouse services, marketing services, advertising and trade press departments. “We are pleased to see that the supervisory board followed our personnel proposal and appointed Wolfram Diener. Our aim is to ensure a consistent transfer of business for our customers thereby guaranteeing continuity,” said Werner M Dornscheidt, president and CEO of Messe Düsseldorf GmbH. He added that he had known Mr Diener for many years and was convinced of his expertise in the trade fair business that he had acquired through broad-based industry and leadership experience, as well as activities and high profitability in

▲ ▲ Newmanaging director Wolfram Diener

an international market-leading group – especially in the Asian region. This created the ideal prerequisites, he went on, to successfully develop Messe Düsseldorf’s product portfolio further and to continue along the way of digital transformation. A graduate in business management, Mr Diener started his professional career in 1991 as the division head for catering and events at the Baden-Württemberg horticultural show in Pforzheim before he joined Hamburg Messe- und Congress GmbH as a project director for foreign trade fairs from 1992 to 1997. From 1997 he served Messe Frankfurt (HK) Ltd as a managing director for Asian operations. 2001 saw Mr Diener change to the management of Shanghai New International Expo Centre Ltd, one of the world’s biggest trade fair centres, a Chinese-German joint venture that Messe Düsseldorf holds a share in. From 2005 to 2011 he took over the operation of the convention and congress centre as well as exhibitions and special events and hotel logistics as vice president at Venetian Macau Ltd and Marina Bay Sands Singapore Ltd. Since 2011 he has served as senior vice president at UBM Asia Ltd in Hong Kong and responsible for the China business as well as selected global trade fair formats. Messe Düsseldorf GmbH – Germany Website : www.messe-duesseldorf.com

www.candorsweden.com • Electrolytic plating • Candojet hot water cleaning • Electrolytic & Ultrasonic degreasing • Welding wire cleaning and copper coating • Pickling & phosphating

Welding wire copper coating

Multi wire cleaning plant

Company founder steps down Lubricant specialist Metalube has announced that company founder David Lee will fully retire from the business in August this year. Mr Lee created Metalube 30 years ago, and under his vision the company grew into the global player it is today. The company was purchased seven years ago and is now part of the lubricant investment specialist Bish- opdale Group. Although no longer the managing director/owner, Mr Lee has remained a key part of the team, visiting Southeast Asia and China four times a year. Metalube Ltd – UK Website : www.metalube.co.uk

Ultrasonic & Electrolytic

CANDOR Sweden AB Tel: +46 11 21 75 00 Fax: +46 11 12 63 12 Email: info@candorsweden.com

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Corporate News

LEONI, a global provider of energy and data management solutions in the automotive sector and other industries, has completed and inaugurated its third Serbian plant in Niš. Harnesses for one of the world’s premium carmakers are being manufactured in a production space of 20,000m 2 . The investment value of the new Niš location is €22 million. Construction work started in February 2017 and in less than five months the first 6,000m 2 of the production space had been built. The first phase of production began in July 2017. At the moment, the Niš plant has around 1,200 employees. By the end of 2019, this figure will rise to 2,200. “The inauguration of our plant in Niš is a happy event for the country of Serbia and for our new employees. Today’s celebrations are also this year’s first official sign of our continuing expansion. Leoni plans to build five more new production facilities for wiring systems in the near future,” said Martin Stüttem, member of the board of directors of Leoni AG with responsibility for the Wiring Systems Division (WSD). The president of the republic of Serbia, Mr Aleksandar Vučić, expressed his great satisfaction with the new plant that will bring new jobs to the southern part of Serbia. Leoni AG – Germany Website : www.leoni.com ▲ ▲ Leoni’s third plant in Serbia, which will create 2,200 new jobs by the end of 2019 Leoni’s third plant in Serbia will create 2,200 new jobs by the end of next year

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Corporate News

Ridgway moving forward and expanding

RIDGWAY Machines, a manufacturer of precision taping and winding machines, is expanding its design department to drive the business forward by providing innovative solutions for customers. This will help meet demand for its machines designed for a range of industries such as aerospace, aviation, automotive, energy, nuclear and subsea. This technical focus is part of a recent reorganisation that saw Andy Glanville become the new managing director. “The announcement makes it clear that Ridgway has shown a commitment to continue to grow,” said Mr Glanville. “Investing in highly skilled people is great news for us and will help Ridgway thrive and confirm us as the leader in our fields.” In a strategic business move Tony Hart has taken up the position of operations director, focusing on support for customers in the delivery of projects, goods and services. Increased demand also means Ridgway has invested in new engineers to help manufacture machines like the new HTM high frequency taping machine,

▲ Precision taping and winding machines from Ridgway Machines

cameras are installed for high-speed image capture and data logging, with 80 images captured per second and a precise tape application with head speeds of 2,500 rpm.

designed to accurately apply a variety of tape materials to cables and flat conductors. It can apply a variety of high performance materials to wire and cable, including PTFE, aluminium, Mylar and Kapton®. High-resolution

Ridgway Machines – UK Website : www.ridgwayeng.com

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Corporate News

Expansion at Borealis Innovation Centre

even anticipate these trends, Borealis and Borouge continue to invest in research and development and testing to deliver step-change solutions based on proprietary technologies. Collaboration with customers and value chain partners takes place for the mutual advancement of electrical competence, but has also been a key factor in providing improved material solutions that support the global energy industry in its efforts to implement more sustainable technologies. For one, transmission technology must ensure the efficient connection of remote, clean energy sources to the grid. Here, Borealis has built on its years of operational experience in extruded HVDC materials and its proprietary Borlink™ technology to set higher standards in proven system performance, setting a new world record of 640 kilovolts (kV) for extruded HVDC cable technology in 2017. The tailor-made Borlink compounds used for these cables are produced in Stenungsund. Borealis Group – Austria Website : www.borealisgroup.com

cable extrusion lines in 1986. In 2009, a new three-layer continous vulcanisation (CV) extrusion line was installed. The completion of this most recent two-year investment project in electrical testing now significantly expands the range of testing activities. The newly enhanced Stenungsund HV testing centre offers alternate current (AC) and direct current (DC) simulation testing for the performance of commercial cable materials in the medium (MV), high (HV), and extra high voltage (EHV) ranges. materials, testing is crucial to help ensure material safety and promote quality assurance. Within the framework of customer and value-chain cooperation, the HV testing centre can also open up an entire spectrum of new project types, and can accelerate the time to market for new innovations. Increased demand for electricity, growing urbanisation, the efficient supply of energy from renewable sources, and the interconnectivity of power grids are just a few of the trends driving the wire and cable industry. To meet and When developing new

BOREALIS and Borouge, providers of value-creating polyolefin solutions for the global wire and cable industry, have inaugurated the newly expanded high voltage (HV) electrical testing facilities at the Borealis Innovation Centre in Stenungsund, Sweden. Four million euros has been invested in order to expand and equip the facility with cutting-edge testing equipment, which is claimed to be unique among polymer producers. The facility enables Borealis and Borouge to continue their position as industry innovation leaders in the most demanding segments of wire and cable. It also opens up new opportunities for collaboration with customers and value chain partners. The wire and cable laboratories in Stenungsund have been important development centres for cable insulation products since 1970, when the first cross-linked polyethylene (XLPE) cable insulation products were produced at the Stenungsund plant. The scope of testing activities has been expanding steadily over decades, starting with testing on electrical cables and

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Corporate News

New USA factory for wire rope manufacturer GUSTAV Wolf has opened its new factory in the USA. The manufacturer of wires and ropes, based in Gütersloh, Germany, is pushing ahead with its international strategy and making a clear move towards further growth.

“We’re now manufacturing in the USA as well. This represents an important step in the more than 130-year history of our company,” said Dr Ernst Wolf, managing director. “It’s in keeping with our tradition to occupy the strongest markets on every continent. Our organic growth is a continuous process. This year, we’re expecting our group turnover to increase by 15 per cent, reaching $184m.” Gustav Wolf now has six rope plants on three continents. Together with Asia and Europe, the USA is one of the biggest markets for these specially constructed ropes. Three years ago, the company director conceived the idea of setting up the company’s own production site in the USA. The site is located in Rome, Georgia, a town of 36,000 inhabitants. The German company bought the factory from a local manufacturer. “From May onwards, we’ll be additionally installing some new machines. And that’s just the beginning. We plan to have 30 staff at the site and want to achieve a turnover of $12.3 million,” said Reinhard Bänisch, the division manager for steel wire ropes. “Our ropes, produced for the major and leading elevator manufacturers, fulfil the highest standards. We’ll manufacture about 3,000 tons of elevator rope in the USA per year, exclusively

for the American market,” added Richard Lindemeyer, who manages the USA site. The 61,354ft 2 premises in the southeastern state of Georgia offers the family-run company the possibility of expanding further. “The USA represents a growth market for us and Rome is a geographically, and thus strategically, ideal location for us. We’re moving even closer to our American customers,” added Dr Wolf. “Our aim is and has always been to be able to deliver our premium products to our customers within 24 hours. Establishing a base in the USA means that we can now accomplish this for all our customers throughout the world.” ▲ ▲ From left, managing director Dr Ernst Wolf; production manager Gerry Blalock; and Reinhard Bänisch, division manager for steel wire ropes

GustavWolf GmbH – Germany Website : www.gustav-wolf.de

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Transatlantic Cable

fast approaching,” Stephen Brennock, an oil analyst at the Singapore-based brokerage rm PVM Oil Associates, wrote to clients in April. † Mr Aleem shared his own pessimism, with ampli cations. “If [Mr] Trump took military action against Iran, it would likely spark protests on the left and among his anti-war supporters,” he wrote. “A spike in the price of gas would probably help fuel [the protests].”

Fallout at the gas pump

An unintended consequence of the American withdrawal from the Iran nuclear pact: a spike in gasoline prices across the USA In early May, Americans faced the fact that President Donald Trump was about to follow through on his campaign pledge to pull the USA out of the 2015 Obama-era agreement with Iran. They also faced the prospect that gasoline prices would surge past $3 a gallon at the start of the summer driving season. Mr Trump had repeatedly threatened to renounce the deal – under which the USA lifted sanctions on Tehran in exchange for the downsizing of the Iranian nuclear programme – and reimpose punishing sanctions on Iran unless Europe helped “ x the terrible aws” in the agreement. The other signatories – the European Union, the United Kingdom, Russia, France, Germany and China – declined to oblige; and interested parties including President Emmanuel Macron of France guessed – correctly, as it turned out – that Mr Trump really was about to pull the USA out of the agreement. Writing in Vox , Zeeshan Aleem reported that the reimposition of sanctions on Iran “would infuriate the US’s allies and deal a serious blow to Iran’s economy, and could ultimately inspire Iran to pursue nuclear weapons.” But he noted something else as well. Because Iran is an oil powerhouse, and sanctions on its oil exports could cause the price of oil to surge across the globe, Americans would feel it immediately at the gas pump. (“You’re Going to Pay a Lot More at the Gas Station If Trump Kills the Iran Deal,” 4 th May) Experts consulted by Mr Aleem said that, when US participation in the Iran deal was scrapped, the price of gas in the USA could increase by upwards of 30 cents per gallon. “Gas prices nationally would rise to over $3 a gallon if Trump places wide-ranging sanctions on Iran,” Patrick DeHaan, a senior petroleum analyst at GasBuddy, a rm that monitors gasoline pricing, told Vox . Analysts said prices could go higher still if withdrawal from the Iran deal were to be followed by further escalation of tensions between the USA and Iran; and, if Mr Trump resumes his talk of using “ re and fury” to take out Iran’s nuclear capability, the price of oil could jump enormously. Fears of widespread turbulence and war in the Middle East would cause a scramble for oil supplies. Some experts said gas prices could spike past $4 a gallon in some US states if war looks imminent. † This spring, oil watchers were not hopeful. “The Iranian nuclear deal is dead in the water and a Trump torpedo is

Energy

Image: www.bigstockphoto.com Photographer Adrian Grosu

Quick-marching into a clean energy future, California becomes the rst US state to require solar panels in all new houses Building standards requiring solar panels on all newly built single-family houses provide an example of California’s ambition to slash greenhouse gas emissions in coming decades. On 9 th May, the state’s Energy Commission voted unanimously to mandate the installation of the panels on all new homes, putting California even further to the fore in the use of solar power. The regulations, set to take e ect in 2020, will also apply to new multi-family buildings of three storeys or fewer, and do not need the approval of the State Legislature. They initiate a broad slate of sweeping policy changes to promote renewable energy, electric vehicles, and denser neighbourhoods in which people will drive shorter distances on their daily rounds. “This is going to be a signi cant increase in the solar market in California,” Kelly Knutsen of the trade group California Solar & Storage Association told Andrew Khouri of the Los Angeles Times (9 th May). “We are also sending a national message that [California is] a leader in the clean energy economy.” Right now, about a fth of new houses in California are equipped with solar panels, one business group estimates. “Going to 100 per cent is a really big, big jump,” said Stuart Waldman, president of the Valley Industry & Commerce Association, which represents San Fernando Valley businesses and opposes the mandate. In explanation of that opposition, Mr Khouri noted that – when taken together with factors including the Trump administration’s tari s on imported solar panels, other state and local mandates, and rising construction costs and government fees – the new rules will likely add $9,500 to the cost of building a new house.

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Transatlantic cable

Reckoning with California On another front, the automakers at the White House meeting were hoping to persuade the president to cooperate with Jerry Brown, the governor of California, who had invoked biblical references when calling the Trump administration’s proposal to roll back auto e ciency regulations “profoundly dangerous.” “We support standards that increase year over year that also are consistent with marketplace realities,” Mitch Bainwol, chief executive o cer of the Alliance of Automobile Manufacturers, told a House panel on 8 th May. The same tone of bland reasonableness just might be detectable in this statement from Lindsay Walters, White House deputy press secretary: “The President will hear from the automaker CEOs about the impact of the rulemaking on the auto industry and their e orts to negotiate a ‘National Program’ with the state of California.” In fact, the auto executives were in an uncomfortable position: wanting to emphasise their support for easing the rigorous Obama-era mileage standards mandated by the Environmental Protection Agency; but not so much as to trigger con ict with California, which favours the tougher standards, and risk the emergence of a split market of environmental regulations set by Washington and Sacramento. As in the Energy item above (“Quick-marching into a clean energy future”), California has demonstrated a determination to take the lead in environmental matters. And, as the world’s fth-largest economy, the headstrong state is not easily ignored. “We are not asking the administration for a rollback,” Ford chairman Bill Ford said on 10 th May during the automaker’s annual meeting. “We want California at the table and we want one national standard.” Mr Jonas of Bloomberg TV asserted that the automakers de nitely want one standard. “And they don’t want this going to the Supreme Court and being dragged out in the media,” he said, becoming linked in the public mind with “some kind of” hostility toward California. † Bloomberg reporters Ryan Beene and John Lippert pointed out that the meeting with the carmaker chiefs came against a background of occasionally bumpy relations between Mr Trump and an industry that he championed before his inauguration. Candidate Trump repeatedly attacked Ford over its decision to build an automobile plant in Mexico. And he attacked GM and Toyota over manufacturing plans for Mexico, both of which responded by announcing billions of dollars in (already planned) investments in American plants. “Trump trade-related tirades also have been a routine issue for the likes of Volkswagen AG, Daimler AG, and BMW AG,” wrote Messrs Beene and Lippert, with Mr Trump excoriating Europe’s auto trade imbalance with the USA and threatening to tax German car imports. Elsewhere in automotive . . . † According to a study conducted in Sweden, rust cuts deep – literally. As reported in The Car Connection , the insurance company Folksam and the homeowner organisation Villaägarnas Riksförbund, both Swedish, performed crash tests on a handful of used Mazdas and Volkswagens that showed signs of typical rust. (“The Ugly Truth: Rusty Used Cars Aren’t As Safe As They Were When New,” 30 th April)

“It all adds up,” Mr Waldman said. “Ten thousand dollars is the di erence in getting a home and not getting a home for some home buyers. There is only so much the banks will nance.” In defence of the new rules, Mr Knutsen of the trade group which promotes solar use said that they should result in more jobs in the state’s solar industry and promote emerging technology by letting builders meet other energy-e ciency requirements through batteries that store a home’s solar-generated power. † In a related article in the New York Times (“California Will Require Solar Power for New Homes,” 9 th May) Ivan Penn pointed out that utilities in California were not taken by surprise by the new rules. The industry has been preparing for the proliferation of energy-producing homes by studying the impact on the electric grid at test sites like the community of net-zero houses in Fontana, east of Los Angeles. These grid-tied homes are so air-tight, well insulated, and energy e cient that they produce as much renewable energy as they consume over the course of a year, presenting the occupants with a net zero energy bill. The utilities are trying to determine how best to manage a system in which these houses put electricity onto the grid during the day and consume it at night. † At the end of 2017, California was by far the USA leader in installed solar capacity. Solar power provides almost 16 per cent of the state’s electricity, and the industry employs more than 86,000 workers. Told by Washington that they should build more cars in the United States, automakers must rst deal with some challenges President Donald Trump informed top auto executives at a meeting in the White House that he wants them to build “millions more cars” in the USA. “We have at this table the biggest car manufacturers in the world,” Mr Trump said at the start of the 11 th May meeting. “We’re working on how to build more cars in the United States.” Executives of General Motors Co, Honda Motor Co, Ford Motor Co, Fiat Chrysler Automobiles NV and other companies were told by Mr Trump that they would be discussing environmental regulations such as auto e ciency standards; and also trade – especially the North American Free Trade Agreement currently under renegotiation. “I’ve never been a NAFTA fan,” Mr Trump said, in an uncharacteristic understatement. As reported by Bloomberg News , automakers, parts suppliers and dealers have been wary about the administration’s renegotiation of NAFTA, warning that higher local content requirements could be unworkable and raise vehicle prices. “Their hand is a bit stronger than perhaps the administration realises,” Adam Jonas, an auto analyst at Morgan Stanley, said on 11 th May on Bloomberg Television . “Those ten CEOs might represent the better part of a million jobs in the United States and indirectly support many, many millions more, particularly in states that supported the administration, such as Michigan.” Automotive

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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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Transatlantic cable

“The USA labour market has tightened to the point where rms are having tremendous di culty nding quali ed and available workers,” RSM chief economist Joe Brusuelas told USA Today . Low unemployment forces employers to raise pay more sharply to attract and retain workers. With unemployment slipping below four per cent, wage growth is expected to accelerate, putting more money in Americans’ pockets. On the minus side (“con”), Mr Davidson notes that if businesses cannot nd enough workers, they will be unable to satisfy all the demand they’re seeing from customers. That means they cannot deliver as many products and services as they otherwise could, which translates into slower economic growth. And slower growth eventually means less hiring. † Another inauspicious aspect of the recent statistics is that unemployment fell in April because there were 236,000 fewer people in the labour force, which includes Americans working and looking for jobs. “That’s not a happy development because a healthy labour market should draw in Americans on the sidelines,” observed Mr Davidson. “It would be more encouraging if the unemployment rate fell because more people got jobs.” On the other hand, the fall-o in job seeking can also be attributed to the number of “baby boomers” (those born between 1945 and the late 1960s) who are retiring from the workforce. This is a long-term trend that will no doubt continue to complicate the USA employment/ unemployment picture. Dorothy Fabian USA Editor

But the company also looks to bene t from the run-up in regional metals prices. Schae er expects to make money from its sales of manufacturing by-products such as steel chippings. Said Mr Heinrich, “The price for this [scrap metal] will rise because of higher steel prices.” (“Higher US Steel Prices Hurt, Help Schae er,” 8 th May) Ms Trentmann also reported that Schae er has negotiated price variation clauses for several components it buys from USA suppliers, which help shield it from some of the e ects of the higher steel prices. Moreover, as its competitors are facing the same challenges, Schae er can pass on at least some of the increase in costs to its consumers – large international auto makers. Making this point, Jürgen Pieper, senior advisor at B Metzler seel. Sohn & Co Holding AG, a German bank, predicted, “The impact of the steel and aluminium tari s will be neutral over time.” † Mr Pieper also noted that the prospect of new trade tari s – as threatened by the USA, the European Union and China – is reinforcing an existing trend to move production closer to where customers are based. Accordingly, Mr Heinrich said that Schae er plans to further localise its production to mitigate currency risks and to limit its exposure to new tari s. Producing locally also helps the company react faster to changing customer needs, he added. This is not to suggest that Schae er is pulling in its horns. Mr Heinrich mentioned, apropos of the $1.67 billion the company has earmarked for capital expenditure projects in 2018, the expansion of existing sites in Vietnam and the USA, and a new factory to be built in Xiangtan, China. † “We still have a positive outlook,” said Mr Heinrich. The company plans to invest six to eight per cent of annual revenue per year. At 8.6 per cent, its 1Q18 investments exceeded that allotment. Low unemployment is a not- unmixed blessing, making it hard for American businesses to hire and retain workers The USA Labor Department announced that the unemployment rate in the nation dropped to 3.9 per cent in April – down from 4.1 per cent in March and its lowest level since 2000. Modest job gains of 164,000 also marked an improvement over the prior month. Taken together, these reports would seem to constitute unambiguous good news for the American economy, and Paul Davidson of USA Today acknowledged that the headlines were impressive. But he cautioned that the situation is more complicated than it looks. Joblessness this low, he wrote, “is actually a mixed bag.” (“The Pros and Cons of US Unemployment Rate Falling Below four per cent,” 4 th May) On the plus side (“pro”), Mr Davidson points out, a low unemployment rate means there are fewer available workers for each job opening. That gives an advantage to job hunters and provides more opportunity to Americans on the margins of the labour force, including disabled people, ex-o enders and the less educated. A tight USA labour market

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