WCA July 2016

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40 Wire & Cable ASIA – July/August 2016
From the Americas
Closed, idled, at-risk USA smelters
There is no denying that American and other aluminium
firms are restructuring and cutting back on production
in current conditions of imbalance in global supply and
demand. In what it describes as an efficiency initiative,
Alcoa, the foremost American aluminium producer, has
announced the closing of a series of domestic smelters
as it relies more heavily on production in Canada, Iceland
and Saudi Arabia. At the same time, Canadian and other
smelters have stepped up shipments of raw aluminium to
the United States.
“In states all across the country, America’s aluminium
producers have closed, idled or are at risk,” said USW
international president Leo W Gerard at the time of the ITC
filing.
“In 2011 there were 14 smelters in the United States.
Today there are only eight, of which only five are currently
operating. [One of these was expected to be idled by the
end of June.] Two of the five now operating are at 50 per
cent or less of capacity.”
For its part, China – whose exports to the United States are
an important source of domestic employment – professes
innocence of wrongdoing. While its own customs figures
show a jump in exports of aluminium of more than 27 per
cent over the past two years, the government-affiliat-
ed China Aluminium Association takes the position that
an increasing need for aluminium in high-speed railway
equipment, aerospace and electronics justifies an expansion
in Chinese production capacity and an incidental rise in
exports.
 Section 201 cases are not easy to win, requiring
proof not merely of injury but of “serious injury” to a
domestic industry from imports; and even if it prevails
the USW case would take some time to produce any
real effect. Meanwhile, presidential aspirant Donald
J Trump’s populist appeals for tougher USA trade
policies, including a steep tariff on goods from China,
attracted attention in China this spring. During a visit to
Washington in April, Chinese finance minister Lou Jiwei
told the Wall Street Journal that the imposition of such a
tariff would violate World Trade Organization rules.
Steel
In tandem to the tensions over aluminium,
low-priced Chinese exports continue to
roil the steel market
A senior official in the China Iron & Steel Association
(CISA) has rejected the charge that China bears any
special responsibility for the over-supply of steel in the
world. Speaking to the Wall Street Journal on the sidelines
of an industry conference held in Hong Kong in April,
Li Xinchuang, the vice secretary general of the China Iron
& Steel Association (CISA), claimed that overcapacity in
the steel industry is a global phenomenon. “It is not only a
situation in China,” said Mr Li. “We have both good quality
and price. It is not about price alone.”
He further told the WSJ ’s Asia correspondent Biman
Mukherji that China would hit back at any increase in
tariffs on its steel exports imposed by other countries. Said
Mr Li, “We are against anti-dumping action and we will
take measures.” (“China’s Steel Body Sees Red Over Tariff
Measures to Stall Exports,” 6 th April)
In March, the US Department of Commerce imposed
preliminary duties on imports of cold rolled steel, used
extensively to make auto parts, from seven countries
including China, whose steel imports received a 265.79 per
cent tariff.
India last year raised import taxes on steel by five
percentage points to 12.5 per cent on flat products and
10 per cent on long products. It also added a temporary
20 per cent “safeguard” duty on hot rolled coils after local
producers claimed to have suffered damage from cheap
imports.
 On 19th April it became apparent that China is
doubling down on its disavowal of responsibility in
the matter of steel over-supply. One day after the
major steel-producing countries, meeting in Brussels,
acknowledged failure to come together on a remedy, a
spokesman for China’s Ministry of Commerce betrayed
some exasperation.
“China has already done more than enough [to reduce
capacity in its steel sector],” Shen Danyang told
reporters in Beijing. “What more do you want us to do?”
The reference would have been to the 2.3 per cent
cutback in Chinese steel production (to 803.8 million
metric tons) last year, the first drop since 1981.
According to Reuters, the current drive by Beijing to cut
industrial capacity will force China to lay off some 1.8
million coal and steel workers. The central government
will allocate $15.5 billion to cushion the effect of the job
losses and to discharge debt.
Elsewhere in steel
 As reported in the Northwest Indiana Times (1st April),
the Korean steel producer Posco is seeking final
local approval and property tax abatement for a new
120,000-square-foot wire rod processing plant in the
Port of Indiana-Jeffersonville. The $19 million project
– a joint venture with JP Steel, also Korean – would
be Posco’s second USA plant. Kyu Tae Kim, the
company’s finance director, said the plant would supply
its automotive customers on a just-in-time (JIT) delivery
basis.
 The Posco announcement came a day after
Delaware-based Nuco Steel Bar Technologies said it
was investing $36.9 million to build a 150,000ft2 bar
mill in Valparaiso, Indiana. Construction was to begin in
May, with completion set for sometime in 2017. Target
sectors are automotive, agricultural, hydraulic, and tool
manufacturing.
As noted on (29th March), Nuco
claims to be building “the most advanced cold draw
bar mill in North America,” with continuous processing
capability.