TPT March 2011

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March 2011 87 ›
Global Marketplace
for steel in India. This was estimated by the Ministry of Steel to
have grown 10% in 2010. As reported on the business news site
bsr-russia.com, Severstal’s main shareholder and chairman, Alexei
Mordashov, has said that the company is looking beyond the US and
Europe to expand into markets in Southeast Asia and India.
›In the view of the chief executive of the third-largest Japanese
stainless producer, Japan’s stainless steel mills must combine or
else ally with others to regain ground lost to rivals in China and South
Korea. According to Hideo Suzuki, of Nisshin Steel Co, Ltd. bigger
Japanese steel makers would be in a stronger position to negotiate
raw material prices with suppliers and to attract investment. “The
current size of operations is too small,” Mr Suzuki told Bloomberg
News in a December interview at Nisshin Steel headquarters in
Tokyo. “The industry will need to consolidate.”
His own firm is seeking to extend an alliance with Nippon Steel Corp,
the nation’s biggest producer, Mr Suzuki said. Yasuhiro Matsumoto,
an analyst at Tokyo-based Shinsei Securities Co, told Bloomberg that
Japanese companies attempting to unite would have to overcome
regulatory hurdles – including strict anti-monopoly rules – or else
shut down plants and seek manufacturing bases overseas.
Transportation
Reporting on the 18 December opening ceremony in Madrid,
Raphael Minder of the International Herald Tribune also noted that,
only two days later, a new rail passage across the Pyrenees would
be inaugurated between Figueres, in Spain, and Perpignan, on the
French side. This is a significant step toward completion of a cross-
border, high-speed rail network connecting Madrid; Barcelona,
Spain’s second-largest city; and Paris.
Given Spain’s acute budgetary difficulties, which have unsettled
investors and sent its borrowing costs soaring, this hardly seems
an ideal time to launch a project whose cost has already surpassed
$15.7 billion, including the construction of a number of railway
stations. To Mr Minder, the counterintuitive timing “underlines the
extent to which infrastructure spending has been at the heart of
Spain’s boom-and-bust economy.” (“Despite Economic Woes, Spain
Continues Investment in Trains,” 22 December)
But, while Spain’s financial crisis has forced the shelving of billions
of euros in infrastructure projects, the government asserts that the
southeastern rail project will go forward as scheduled. According
to Inmaculada Rodríguez-Piñero Fernández, the general secretary
for infrastructure, Spain’s rail construction costs have fallen 19%
over the last 10 years. And, she told the Herald Tribune, “[We] can
continue to make dramatic progress in containing costs.”
Teófilo Serrano, president of Renfe, the state-controlled rail operator,
has said that the high-speed connection between Madrid and
Valencia would prove one of Renfe’s strongest businesses. Valencia
is a manufacturing centre and moreover commands one of the
biggest ports on the Mediterranean. Together, the regions of Madrid
and Valencia are home to 19% of Spain’s population and account
for 31% of its gross domestic product. Once having reduced travel
time between the two cities by almost two hours – to an hour and 35
minutes – the company expects to quadruple its market share of all
travel on the route to 41%, largely at the expense of airlines.
› Mr Minder of the Herald Tribune observed that Spain also has
hopes of leveraging its rail expertise worldwide. In December,
he reported, a delegation from the Spanish Ministry of Public Works
travelled to Beijing to showcase Spain’s latest rail advances to a
Chinese government that has invested billions to extend what is
already the world’s biggest high-speed rail network. In addition, a
consortium of Spanish companies entertains hopes of securing a
€6 billion contract to connect the Saudi Arabian cities of Medina and
Mecca.
In brief . . .
› Europe will remain among the most important areas of
investment for China’s world-record $2.65 trillion of foreign-
exchange reserves, according to an official of the People’s Bank of
China. Deputy Governor Yi Gang said in a statement on the central
bank’s website (7 January), “The euro and European financial
markets are an important part of the global financial system and
were, are, and will be one of the most important investment areas
for China’s foreign-exchange reserves.”
Other recent Chinese statements of support for the euro area include
Vice Premier Li Keqiang’s expression of confidence in the financial
markets of Spain and his pledge of further purchases of Spanish
debt. In backing European economies, China may help enhance the
value of its euro-denominated assets as well as boost demand for
Chinese exports in the region that is its biggest market.
Spain hopes to remain on track
with its high-speed rail network
Spain keeps up its thrust into high-speed
rail development even as the central
government struggles with a financial
crisis
In December, when Spain overtook France as the country
operating Europe’s biggest high-speed rail network, King Juan
Carlos and Prime Minister José Luis Rodríguez Zapatero opened
the link between Madrid, the Spanish capital and largest city, and
Valencia, the country’s third-largest city. The 242-mile link extended
Spain’s high-speed rail lines to a total of a little over 1,240 miles.
Neighbouring France, a similarly ambitious participant in the high-
speed rail stakes, has 1,178 miles. By way of comparison, Germany
has about 800 miles.