Transatlantic cable
May 2014
32
The GM response did not directly address the immunity issue.
A statement read: “It is true that GM did not assume liability
for claims arising from incidents or accidents” occurring prior to
July 2009; concluding: “Our principle throughout this process
has been to put the customer rst, and that will continue to
guide us.”
Mr Spangler noted that the defective ignition switch has not
been identi ed as a causative factor in any of the deaths and
injuries associated with models in the recall. But he reported
that GM arrived at a con dential settlement in at least one
lawsuit – instituted over a fatal crash, in 2010, of a 2005
Cobalt – that fell outside the scope of the liability shield. The
successful attorney in that case was not entirely satis ed.
“Instead of recalling their product, they started paying the
claims, which is outrageous,” Lance Cooper, of Marietta,
Georgia, told the
Free Press
. He added that waiving liability
protection “would be a good step in the right direction.”
Of related interest . . .
Even as lawmakers pressed General Motors over the
defective ignition switch, a new review of federal data
showed that air bag malfunction was identi ed in crashes
involving two models in the February recall, in which 303
people died. The review by Friedman Research (Austin,
Texas), a company that analyses vehicle safety data,
examined cases in which air bags failed to deploy, but did
not try to discover what caused the crashes.
The Center for
Auto Safety commissioned the study. In a 13
th
March letter
to the National Highway Tra c Safety Administration, it
criticised the agency for not detecting the air bag incidents
as well as the ignition switch defects.
Steel
For good or otherwise, the mainly
China-centred trends of last year are seen
as in uencing the current scene in steel
Paul Bartholomew, who is managing editor-Australia of
Platts
,
reports from Melbourne for the New York-based global provider
of information relating to commodity markets. Here, much
abbreviated, is his roundup of developments last year that bear
most signi cantly on steelmakers today (“Key Steel Themes in
2013 Will Impact Markets This Year,” 14
th
February)
China keeps on making more steel. Crude steel production
in 2013 rose 7.5 per cent year-on-year to reach around 780
million metric tons in 2013, and the Asian giant is expected
to produce close to 810 million mt this year. Even if output
starts to plateau, incremental increases on such a large base
will continue to drive strong demand for raw materials.
Iron ore prices held up remarkably well, averaging around
$132/mt in 2013 and avoiding the dramatic price slumps of
the previous two years. Many analysts expect the iron ore
feast to induce market indigestion and push prices closer
to the $100/mt level. Much depends on where Chinese
cost-curve support will settle as imports displace more
domestic supply. No one is totally sure if that level is closer
to $100/mt or $120/mt.
Abundant supply alters stocking cycles. With the increasing
availability of coking coal and iron ore, restocking cycles
are becoming less predictable; also less driven by seasonal
factors, as mills and traders learn that they can source raw
materials easily. This means participants can a ord to sit on
the sidelines when they believe prices are too high, which
could in turn help to pressure prices. Iron ore stocks have
risen signi cantly recently and are some 30-35 million mt
higher than they were six months earlier.
Rise of derivatives, no longer the preserve of foreign
investment banks. To help mitigate price risk and in some
cases simply to have a punt, Chinese mills, traders and
investors have increasingly embraced raw materials swaps
and futures trading. This was aided by the establishment
of new contracts in 2013, when more than 284 million mt
of iron ore swaps, options and futures were cleared, with a
cumulative value of around US$40 billion. In volume terms,
this was 123 per cent higher than in 2012.
Project development remains a challenge. Most smaller iron
ore and coal project developers achieved little in 2013 other
than to conserve working capital while seeking strategic
partners. Investors are cold on the resources sector right
now and projects further back in the pipeline may have
another di cult year. There is unlikely to be much progress
on big-ticket projects such as West African iron ore, as the
large miners will focus on controlling costs and doing more
with existing operations.
China is serious about pollution. The new leadership in
Beijing knows it must tackle pollution and the steel sector is
rmly in its sights. Many small mills will be unable to meet
new environmental targets and may eventually be forced
to close some or all of their operations, which could help
reduce steel overcapacity.
Already the market is seeing higher-quality raw materials
rewarded with stronger premiums, which could increasingly
be the case in coming years.
(But, Mr Bartholomew also
noted: “China has been trying to reform its steel sector for
many years, to little real e ect.”)
Elsewhere in steel . . .
Steel sheet prices might be nearing bottom, industry sources
told
American Metal Market
(14
th
March). Hot rolled and cold
rolled sheet prices had slipped in the US since the New Year
on increased import activity, a cold-weather cutback in
buying, and falling raw material costs, but opportunity for a
price increase was seen as arriving with the spring.
“Business is good and I’m not hearing anything out there
that’s negative,” a Midwest service centre source told
AMM
.
“I’m expecting to see a price increase before 1
st
April because
mills will want to take advantage of the pent-up demand as
well as setting a oor.”
AK Steel (West Chester, Ohio) said it has raised its prices on
all stainless steel products, e ective 1
st
April, by way of a
discount reduction of two percentage points. The producer
of at-rolled carbon, stainless and electrical steels hiked its
net-price items, including automotive exhaust products,
two cents per pound. Current surcharges on the company’s
range of stainless steel products remain in e ect.
The inclusion of steel plate made by ArcelorMittal USA
in Northwest Indiana in the new $3.9 billion Tappan Zee
Bridge in New York State marks a departure from a trend
toward the use of steel made in China for major American
infrastructure projects. Chinese steel was recently used in
the Verrazano-Narrows Bridge, also in New York, and the
San Francisco-Oakland Bay Bridge.
