EoW January 2012

Transatlantic cable agency, manufacturing is helping to pull the 18 counties of the region out of the US recession faster than in most of the rest of the state and nationwide. The study found that employment in the region grew by 1.5 per cent to that point in the year. Meanwhile, unemployment fell to 8.5 per cent, below both the statewide rate of 8.8 per cent and the national rate of 9.1 per cent. Jacob Duritsky, director of business attraction at Team NEO, told the Cleveland Plain Dealer that, while the region saw employment increase by 1.2 per cent from the second to third quarter of 2011, much of that increase could have been a seasonal hiring spike. He saw a stronger barometer in the year-over-year increase of 30,000 jobs. About 8,000 of those jobs were in manufacturing: a “Cleveland-Akron-Youngstown tradition,” in Mr Duritsky’s view, that now accounts for 18 per cent of the regional economy. The Plain Dealer ’s Robert L Smith reported that Mr Duritsky believes the numbers were likely buoyed by new steel jobs in Lorain and Youngstown and by busy production lines at General Motors plants in Lordstown. But the Team NEO director credits “new manufacturing savvy,” as well, according to Mr Smith. (“Northeast Ohio Is Manufacturing Its Way Out of the Great Recession,” 14 th November). Mr Smith continued: “The regional economy is being strengthened by companies that successfully transitioned from traditional to advanced manufacturing, a trend represented by venerable employers like GrafTech [carbon and graphite products] and Astro Manufacturing [wire EDM], Team NEO contends. Meanwhile, innovative companies like Lubrizol have made the region a national leader in specialty chemicals.” † That is not to say that the good times have returned to Northeast Ohio. As noted by the Plain Dealer , Team NEO’s broad view of Greater Cleveland does not re ect the experience of every community. About two weeks earlier, the US Labor Department released statistics showing zero job growth in the Cleveland-Elyria-Mentor metro area in the year to 30 th September 2011. Still, Mr Smith observed, Northeast Ohio competes as a region, and Team NEO found that the region has added 40,000 jobs since the bottom of the recession in 2009. Some observers – like Edward Hill, a professor of economics and the dean of the College of Urban A airs at Cleveland State University – see a section of the country poised to rise with the times. Observing that a region that manufactures is a region that exports, he cited a trend that is making American products cheaper overseas. “The declining dollar [is] great for parts of the country that make stu ,” said Mr Hill. The London Metal Exchange requires more storage space in the US, to the bene t of Charleston and New Orleans A top o cial at the London Metal Exchange said in November that the exchange was working on plans to expand its US warehouse locations to Charleston, South Carolina. This newest American outpost for the exchange – of a total of 13 worldwide – would likely house raw steel made at a Nucor Inc mill in Darlington, also in South Carolina. The LME’s other US facilities for storing and distributing steel billet are in Chicago, Detroit and New Orleans. Chris Evans, head of business development for the LME, told Reuters: “The Southeast of the states is very important for the steel market in the USA and we need to be part of that.” As reported by John McDermott in the Charleston Post and Courier (10 th November), Charleston can be viewed Steel

as an ideal location for a Southeast distribution point because of the number of steel makers that already operate near the port. Dallas-based Commercial Metals Co – one of three US companies that make billet approved for LME-bonded storage warehouses – has a mill in nearby Cayce. While declining to comment on the LME initiative, the South Carolina State Ports Authority con rmed the hospitality of its ports to such bulky, non-containerised cargo as long, rectangular bars of raw steel. SPA spokesman Byron Miller told the Post and Courier: “We’re dedicated to this business and aim to see it grow.” † Another interested party in the Southeast is Louisiana, whose own Port of South Louisiana already handles the largest tonnage of shipping of all US ports. And matters of metal storage are attracting attention in New Orleans, still struggling in the aftermath of the disastrous Hurricane Katrina of 2005. The New Orleans Times-Picayune reported that the current interest is traceable to a programme begun in 1998, when the city became one of a limited number around the world to be designated by the LME to keep metals until manufacturers are ready to receive them. Now there are 53 New Orleans-area warehouses holding LME certi cation, and stockpile accumulation in structures that had stood empty for years has touched o a scramble for specialised warehouses throughout the metro area. Rebecca Mowbray wrote: “New Orleans is the second-largest London Metal Exchange site in the country behind Detroit, according to the exchange, and has more copper, zinc, and steel in storage than any other place,” in the United States. (“Local Warehouse Space Is Bursting with Stored Metals,” 13 th November). Ms Mowbray added that, according to port o cials, this has been excellent for the Port of New Orleans because demand for metals storage climbs when the economy is slow and imports of other goods fall o . “We’re probably close to 98 per cent occupancy, which is the best ever,” Kevin Kelly, owner of Port Cargo Service, a local metals warehousing business, told the newspaper. “I’m considering buying property and building warehouses if I can nd good land to build on.” Elsewhere in steel . . . † AK Steel (West Chester, Ohio) raised its prices for at-rolled stainless steel products in the 200, 300 and 400 series, e ective 1 st January. The producer of at-rolled carbon, stainless, and electrical steels said the increase would be achieved through a reduction of four percentage points in the discount for cold-rolled and hot-rolled product. Andrea Brown of Platts reported (17 th November) that AK’s base prices on automotive exhaust grades and bright anneal nishes would increase by 8 cents per pound. All raw material surcharges for stainless steel products, including those for materials under 0.015" thick, will remain in e ect. † Also on 17 th November, Steel Business Brie ng reported that US spot prices for wire rod had declined $20 per ton month-on-month as domestic rod mills reacted to a further decrease in the price of scrap. Spot prices for mesh quality rod dropped to $720-740 per ton.

Surveys

A good place for a going business, the US is less hospitable to new enterprises The annual publication Doing Business from the World Bank reviews regulatory environments worldwide and ranks nations

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EuroWire – January 2012