EuroWire September 2017

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Transatlantic cable
September 2017 42
† Separately, the USA-based job-search site Indeed reported
that more than 10 per cent of new jobs created in the UK
through mid-June were in technology, with AI and data
among the primary drivers.
Russ Shaw, founder of Tech London Advocates, told Indeed
(14th June), “The salaries and prestige associated with the most
in-demand specialisms – AI, data science, software developer –
are turning them into the rock stars of the business world.”
Steel
Steel in the blockade of Qatar by Persian Gulf
neighbours: how much of an Achilles heel?
When, on 5th June, Saudi Arabia, the United Arab Emirates
(UAE) and Bahrain severed diplomatic, trade and transport
ties with import-dependent Qatar, the halt in tra c into
and out of Hamad Port raised fears of shortages of food and
other essentials. But concern was also expressed for Qatar’s
steel trade, both imports and exports, with those nations
and others.
One early commentator, SteelOrbis, reported a consensus among
its market sources that the Qatari steel industry would have to be
negatively a ected.
The e-trading platform considered the situation faced by Qatar
Steel, the rst integrated steel plant in the Arabian Gulf and a
regional steel industry leader. Feedstock billets for the company’s
wire rod mill in Dubai normally move from Qatar to Dubai
through Saudi Arabia.
Blockage of these deliveries by the boycott would require Qatar
Steel to nd suppliers of billet where it could.
Qatar had also been exporting rebar to Saudi Arabia, Yemen
and Libya. Even if existing rebar commitments were honoured,
it seemed to SteelOrbis likely that subsequent exports would be
halted. This would mean opportunity for Turkish steel producers
who sell rebar in the region.
The political situation is still uid at the time of writing, and there
had been little news of steel speci cally. But on 16 th June, Hellenic
Shipping News reported on a bustling Hamad Port in Qatar, with
giant yellow cranes lifting hundreds of containers o cargo ships
onto lorries waiting ashore.
After the launch of new direct shipping routes to cope with the
crisis, port o cials believed the worst was over; they said the
episode might even help Qatar seal new transport deals that
would circumvent its Gulf neighbours.
“The rst ve days of the crisis there were fewer shipments,” said
a supervisor at the port. “Now it’s back to normal. I’ve seen the
schedule and it looks packed.”
This appeared to be an accurate reading. An alternate route
to India’s Nhava Sheva Port was announced on 14 th June after
two new services opened from Oman, which remained neutral
during the crisis.
Earlier in the week the world’s biggest container line, Maersk
of Denmark, said it would accept new bookings for container
shipments to Qatar from Oman. The rst ship on a new direct
weekly service from India’s Mundra Port was expected to arrive
shortly. Turkish vessels were on their way.
Hamad al-Ansar of the Qatari ports management company
Mwani said ties with Turkey and Iran, which ew goods into
the capital city of Doha during the boycott, might expand.
“We’ll open a relationship with anyone who can bring cargo,”
he told Hellenic Shipping News. (“Gulf Crisis a ‘Blessing In
Disguise’ for Qatar Seaport,” 16th June)
† Even so, ten days into the boycott, the cutting of transport
links did a ect some services to and from Qatar. One port
o cial said that ships from Shanghai, which normally go
through Jebel Ali in Dubai, had to be re-routed via Iraq,
adding seven days to a normal 20-day voyage.
But – that early in the boycott, at least – it seemed that a
week’s delay in the arrival of materials might be something
that the Qatari steel industry could tolerate fairly well.
Appraising China as an opportunistic
exporter of steel to the USA, a contrarian
sees the threat as more apparent than real
Datelined Sydney, Australia, a column by David Fickling on the
Bloomberg fast-commentary platform Gad y challenges the
view – widely held in the USA, most notably by President Donald
J Trump – that China’s steel mills are killing their American rivals.
(“Don’t Blame China for the Fall of US Steel,” 13th June)
Mr Fickling began by acknowledging that, since 2000, China’s
output of steel has risen more than 560 per cent, from just over
100 million metric tons per year to 690mmt over the 12 months
to this spring.
In the same period, USA manufacturing employment in steel,
aluminium and copper has dropped 38 per cent, from 625,000 to
385,000 jobs.
As US Department of Commerce (DOC) o cials prepared to
brief Congress on 16th June on an investigation into whether
steel imports threaten USA national security – and commerce
secretary Wilbur Ross weighed anti-dumping measures –
Mr Fickling addressed the question whether the prima facie case
against China is as persuasive as it seems. Here, condensed and
edited, are his ve arguments that it is not:
† A poor country uses very little steel per unit of gross
domestic product (GDP). As it industrialises, its usage
(”steel intensity”) increases rapidly until the country starts
to transition toward consumer-led growth. At that point,
steel intensity will start to slip as spending shifts from
industrial products like machinery and buildings to less
metal-intensive categories.
Considered in the context of the evolution of steel intensity,
Mr Fickling asserted, USA metal output isn’t declining as a
result of overseas competition “but because, as America gets
richer, it’s buying di erent stu .”
Further, employment is su ering in the USA because
the steel it does produce is being made more e ciently.
According to the Bureau of Labor Statistics, labour
productivity (real output per labour hour) in the American
primary metal sector more than doubled from 1987 to 2016.
America’s steel mills produced some 79 million tons over
the year to mid-June, compared with about 742,000 tons of
imports from China. Wrote Mr Fickling, “You have to squint
quite hard to even see Chinese steel imports to the USA,
when compared to the size of the domestic trade.”