82
N
ovember
2014
Global Marketplace
There is no question of the value of the newly protected
market. “Because of this cheap energy, there’s a lot of
infrastructure with steel going on,” Piotr Galitzine, chairman
of TMK-IPSCO, said in an interview with the
Journal
. “We’ve
identified $120bn worth of projects in the US which have to do
with gas as a fuel and feedstock.”
›
Expert opinion canvassed by Mr Miller suggests that, even
as the ITC tariffs raise the costs of oil and gas companies
drilling everywhere from Western Pennsylvania to the Gulf of
Mexico, they will not entirely stop OCTG imports.
“If the findings had been dramatic enough to stop all imports
from South Korea, we’d be looking at Korea leaving behind a
25 per cent market void,” said Mr Galitzine, referring to South
Korea’s current share of the market. However, he said, with
tariffs in the 5 per cent to 15 per cent range some imports will
still trickle through.
Other steel executives consulted by Mr Miller are of much
the same view. They say that imports from another country
will likely take South Korea’s place, as happened when tariffs
were imposed on imports from China in 2010.
Elsewhere in steel . . .
›
Tata Steel on 11 August announced that over the previous
year it had signed contracts worth $13.4mn with the
London-based global contractor Subsea 7 to supply undersea
pipes to four separate North Sea projects. The Indian producer
is providing “in excess of” 9,000 metric tons of pipe: around
17.4 miles of carrier pipe and 16.8 miles of sleeve pipe, to be
manufactured at Tata’s Hartlepool pipe mills in the UK.
›
The Gerdau Special Steel India plant in Andhra Pradesh
– the first investment in Asia for the Brazilian steel giant
– was to be inaugurated by the beginning of 2015. The plant,
built on an 846-acre site at a cost of $400mn, has an installed
capacity of 300,000 metric tons.
Aerospace
Airbus vs Boeing: Will passenger
distaste for connections through
huge hubs finally decide the
winner of the competition?
For years this column has covered the rivalry between the
European plane maker Airbus and Boeing, of the US, in which
the advantage – in prestige, productivity, profits – passed
regularly from one company to the other and back again.
When, in August, it was reported that the pilot of a Boeing 787
“Dreamliner” was forced to shut down one of the plane’s two
engines about one and a half hours into a scheduled flight over
the Atlantic, the advantage moved to Airbus.
The plane made a safe emergency landing in the Azores
about four hours into a nine-and-a-half hour flight from the
Dominican Republic to Manchester, UK. The sudden engine
failure, the first such event for the 787 since deliveries began
in the autumn of 2011, was a black mark for Boeing.
But, if experts like aerospace analyst Richard Aboulafia, of the
Teal Group, an aviation consulting firm in Fairfax, Virginia, are
right, Boeing will emerge as ultimate victor in the competition
with Airbus. The deciding factor will be something that has
not, until now, commanded much attention: the preferences
of the typical airline passenger, about which Airbus may have
guessed wrong.
As reported by Jad Mouawad of the
New York Times
, the A380
– which dwarfs every other commercial jet in the skies – was
Airbus’s response, not only to the Dreamliner but also to a
trend: more and more air travellers (a projected four billion
by 2030), more flights, and increasingly congested tarmacs.
Airbus saw the rise of international traffic through major hubs
and bet on a big plane to connect those big airports: the A380,
ideal for high-traffic high-volume routes or where there are
flying constraints.
For the plane that cost roughly $25bn to develop, the
anticipated benefits have not materialised.
So far, according to the
Times
, Airbus has received 318 orders
for the A380 and delivered 138 planes to just 11 airlines – a
disappointing showing for what was to be a flagship aircraft
for carriers worldwide. A number of reasons could be cited,
some merely cyclical; but according to Mr Aboulafia the main
problem is more fundamental. People would rather take direct
flights on smaller airplanes, he said, than get on big airplanes
– no matter their feats of engineering – that make connections
through huge hubs. (“Oversize Expectations for the Airbus
A380,” 9 August)
›
Of the 500-passenger A380 with its two full-length decks
totalling 6,000ft
2
and a wingspan that almost crowds it out
of a football field, the aviation industry expert declared flatly,
“It’s a commercial disaster.”
Time will tell if that is overstatement. In the meantime, this
much is clear: a decade ago, when the world’s two leading
plane makers were looking to the future, Boeing saw traffic
moving away from big hubs and toward secondary airports.
“So it started to build a smaller, more fuel-efficient long-range
aircraft,” wrote the
Times
’s Mr Mouawad. “Which became
known as the 787 Dreamliner.”
In brief
›
The US Securities and Exchange Commission (SEC)
requires both public and private American firms
contemplating dealings with Iran to file an “IRANNOTICE”
with that agency and other regulatory bodies. Boeing Co has
filed such a notice with the SEC, reporting its having reached
a preliminary agreement with a subsidiary of Iran Air for the
potential sale of goods and services. In April, as part of an
interim agreement concerning Iran’s controversial nuclear
programme, the US Treasury had granted licences to Boeing
and General Electric Co to sell parts to Iran to service its
ageing civilian air fleet.
