WCA January 2016

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Wire & Cable ASIA – January/February 2016
From the Americas
In the first eight months, steel cargoes out of China surged
26.5 per cent to 71.9 million tons, customs data shows.
China’s shipments of steel ballooned to a record in 2014 as
mills – faced with shrinking domestic demand and slowing
economic growth – pursued overseas sales, driving down
global prices and spurring trade tensions with the USA,
India and Africa.
JPMorgan said steel demand in China would shrink four per
cent last year and two per cent in 2016.
“Booming steel exports have helped steel production
hold up relatively better than steel demand, but we
believe exports have reached a peak,” Daniel Kang and
other analysts wrote in a 4th October report from the New
York-based banking and financial services company.
Net tonnage shipped from China was expected to total
86 million last year, 87 million in 2016, and 83 million in
2017, according to the bank, which put the 2020 projected
total at 90 million tons and left that unchanged through
to 2035.
As noted by Jasmine Ng of BloombergBusiness , mills
outside China “are pushing back.” ArcelorMittal South Africa
Ltd, a unit of the world’s biggest steelmaker, has asked
Pretoria to extend tariffs on steel imports. And the European
Union steel industry is assembling data for a complaint to
the European Commission alleging that Chinese exporters
are dumping hot-rolled coil in the EU. (“JPMorgan Says
‘Waves of Protectionism’ Will Cap China Steel,” 4th October)
China may try to rein in steel exports by adjusting taxes to
achieve a situation that benefits both the country and its
trading partners, Wang Liqun, vice chairman of the China
Iron & Steel Association, told Ms Ng and other reporters in
Qingdao in September.
Still, shipments will surpass 100 million tons this year as
overseas sales remain strong, Mr Wang said.
Chinese mills are making more steel than the economy
needs as they are benefiting from supplies of cheap
iron ore, Lourenco Goncalves, chief executive officer of
Cliffs Natural Resources Inc (Cleveland, Ohio), said in
August.
Bright spots in automotive and
construction support a somewhat
improved outlook for the steel industry
of North America in 2016
From the 49th annual World Steel Association conference,
held on 12th October in Chicago, Christopher Davis of Platts
reported on a cautiously optimistic WSA short-term outlook
for the steel industry in the North American Free Trade
Agreement (NAFTA) region.
While finished steel demand across the region – comprising
the USA, Canada and Mexico – was expected to show
contraction by 2.7 per cent in 2015, to 140.8 million metric
tons (mt), WSA looks for growth of 2.1 per cent, to 143.7
million mt, in 2016.
In the USA, the largest steel producer and consumer of the
three NAFTA countries, WSA expected a three per cent dip
in demand in 2015, to 103.8 million mt, followed by a return
to growth of 1.3 per cent in 2016, for a total of 105.2 million
mt. (“NAFTA, US to See Steel Demand Dip in 2015, Growth
in 2016,” 13th October)
At a press briefing at the conference the incoming WSA
vice chairman, Nucor Corp CEO John Ferriola, said the
automotive sector is among the key end-user drivers of the
expected modest growth in USA steel demand.
Recent estimates put production at between 17.6 million
and 17.9 million cars and trucks this year, up from about
17.2 million units in 2015.
While USA non-residential construction is showing “slow
but steady improvement,” with growth of about five to six
per cent last year, WSA took note of a “sluggish” US energy
sector. Mr Ferriola said, “Almost no steel is going into the
energy sector at all.”
At the same press briefing the president of the German
Steel Federation, Hans Jürgen Kerkhoff, said that much
of last year’s likely 1.7 per cent decline in global steel
consumption – to around 1.51 billion mt – could be
attributed to the slowing Chinese economy.
According to Mr Kerkhoff, who with JPMorgan Chase
believes that steel demand in China has peaked (see
“Chinese steel exports,” above), “The [Chinese] steel
industry is now experiencing low growth, which will last for
the time it takes for other developing regions of sufficient
size and strength to produce another major growth cycle.”
Immigration
Meant to attract ‘the best talent in the
world’ to the USA, the problematic H-1B
visa programme hits another speed bump
As reported by Suryatapa Bhattacharya of the Wall Street
Journal’s Delhi bureau, the USA “staged a rapid retreat”
from plans to speed up the green-card application process
in a way that would have been especially helpful to Indian
holders of the H-1B temporary visa.
This programme allows American employers to hire foreign
professionals with college degrees and “highly specialised
knowledge,” mainly in science and technology, to meet their
needs for particular expertise.
A green card certifies the holder as a lawful permanent
resident entitled to reside and work in the United States.
To an H-1B visa holder, a pending green card application
entails certain benefits in the meantime, including job
mobility and greater freedom to travel outside the United
States.
Additionally, the privileged status extends to the children of
such applicants, even if these minors should become adults
during the waiting period. The yearly cap on new green
cards is 140,000.