20100708 - Steel Manufacturers Association

advertisement
SteelOrbis
ALL ABOUT STEEL TRAINING WORKSHOP
Thomas A. Danjczek
President
Steel Manufacturers Association
San Diego, CA
July 8, 2010
SteelOrbis Training
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
History of American Steelmaking
SMA
Early 20th century American steel
Transformation of steel making from Open Heart Furnace to BOF and later to EAF
EAF and evolution of minimill concept
Advantages of minimills
Dominant companies throughout 20th century
Mergers and Acquisitions among modern American steelmakers
American Steel Making in Crises: 1980’s, late 1990’s, early 2000’s
Various trade remedies
- Trigger price mechanism / Section 201 Safeguards / 421 Safeguard
Antidumping and Countervailing Cases
Other trade issues: Fraud, NME’s, WTO, etc.
Largest North American steelmakers
Product mix: longs, flats, specialty steel
Current issues that American steelmakers are facing
Where do we go from here?
What are the trends?
SteelOrbis Training
SMA
• The Steel Manufacturers Association (SMA)
– 34 North American companies:
29 U.S., 3 Canadian, and 2 Mexican
– Operate 125 steel recycling plants in North America
– Electric Arc Furnace (EAF) steelmakers using recycled steel
– EAF steel producers accounted for nearly 2/3 of U.S. production in 2009
– SMA represents approximately 90 million of U.S. 120 million ton
capacity (75%)
– 128 Associate members - Suppliers of goods and services to the steel
industry
SteelOrbis Training
Where SMA Member EAFs are located…
U.S. Steel Industry, Then. . . . . . . . .and Now
Smoke pouring into the air from a Pittsburgh steel mill,
1890.
Image by Corbis - Bettmann
Electric Arc Furnace facility
Image by SMA
SteelOrbis Training
Early US Steelmaking
Source – Stubbles, J.R. The Original Steelmakers. Iron & Steel Society, Warrendale, PA, 1984. 5, 33.
US Steel Production by Process
SteelOrbis Training
In 2009 64% EAF
SteelOrbis Training
World Steel Production by Process
In 2009 37% EAF
US Steel Production
SteelOrbis Training
Year
US Raw Steel1
(Metric Tons)
1US
Geological Survey
1900
9,200,000
1910
23,700,000
1920
37,800,000
1930
36,000,000
1940
78,000,000
1950
87,800,000
1960
90,100,000
1970
119,000,000
1980
101,000,000
1990
89,700,000
2000
102,000,000
2010
70,000,000 (e)
SteelOrbis Training
US Capacity; Production & % EAF & Integrated –
2000-2009
% Capacity
Total Raw
Steel
Production
(mt)
Total
Shipments
(mt)
% EAF
Share
Integrated
Ore-Based
Share (mt)
%
Integrated
Ore-Based
Share
EAF BasedShare (mt)
118
86.1
102.0
99
46.5
47
52.5
53
2001
114
79.2
90.1
92.6
43.9
47.4
48.7
52.6
2002
103
88.8
91.6
90.7
45.7
50.4
45
49.6
2003
110
84.9
93.7
96.1
49
51
47.1
49
2004
105
94.6
99.7
101
52.7
52.2
48.3
47.8
2005
108
87.5
94.9
102
56.1
55.7
45.9
44.3
2006
112
87.5
98.2
99.3
56.7
57.1
42.6
42.9
2007
113
87.0
98.1
96.5
56.2
58.2
40.3
41.8
2008
113
81.4
91.9
89.3
51.3
57.4
38
42.6
2009
113
49.6
56.0
52
33.3
64
18.7
36
Year
Total
Capacity
(mt)
2000
Source – U.S. Geological Survey – Iron & Steel Statistics and Information web page =
http://minerals.usgs.gov/minerals/pubs/commodity/iron_&_steel/
Set the Stage
SteelOrbis Training
US Steel Production
(All in Million Net Tons)
(Numbers are Approximate)
PAST – From 1986 through 2008, U.S. steel production has been around 100 m tons – up &
down 10%
2009
1st Half
2nd Half
Year
25m
36m
63m
(45% utilization)
(62% utilization) Now 1.5m/week vs. 2.1m/week
(Minimills at 63% of production)
2010 (from November 2009)
World Steel
Peter Marcus
US Poll
78m
68m
69m
(up 19% over 2009), optimistic
(Back to 75m in 2012)
(up 10% over 2009)
2010 – Today (Through March 30)
Capacity Utilization (67.7%); or approximately 80 million tons annual rate
42.9% in 2009
2009 in a long term context
US steel industry production changes
Year
Decline
1
1921
-53%
2
1932
-47%
80%
3
1938
-44%
60%
4
1908
-40%
5
1982
-38%
6
1931
-36%
7
2009F
-30%
8
1930
-28%
9
1914
-25%
-40%
10
1958
-24%
-60%
11
1919
-22%
12
1954
-21%
13
1975
-20%
14
1980
-18%
15
1946
-16%
World
USA
40%
20%
0%
-20%
19
00
19
05
19
10
19
15
19
20
19
25
19
30
19
35
19
40
19
45
19
50
19
55
19
60
19
65
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
05
20
10
Year on Year Change in Production
100%
Source: AISI, First River
US raw steel capacity utilization
Long-term average is 78%, stable
level is 85%
100%
63%
48%
65%
61%
90%
CapacityUtilization
80%
70%
60%
50%
40%
30%
Average Utilization Rates
Periods of adjustment (red bars): 60%
Periods of relative stability:
85%
20%
10%
0%
1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Source: AISI, First River
Steelmaking Flowlines
EAF Process Flow Diagram
Flat Rolled Breakdown
Long Product Breakdown
SteelOrbis Training
Top Global and North American Steel Producers - 2006
Source – Adapted from Metal Bulletin (March 12, 2007) for data on tonnage and global rankings.
SteelOrbis Training
Globalization and Consolidation Developments Have Dramatically
Changed the NAFTA Steel Landscape
Acquiring Company
Acquired Company
Acquiring Company
Acquired Company
Arcelor Mittal
Arcelor
Dofasco
Mittal
Ispat Inland
Bethlehem
ISG
LTV
US Steel Plate
Weirton
Acme-Riverdale
Georgetown
Sicartsa
Bayou
US Steel
Lone Star
National
LTV Tin
ISG IH#2 Pkl.
Stelco
Nucor
Duferco/NLMK
Connecticut Steel
Winner Steel
Trico
Evraz
Birmingham
Corus Tuscaloosa
Oregon Steel
Worthington-Decatur
Claymont Steel
Marion
Ipsco Canada
Nelson Steel
Severstal
Harris Steel
Auburn Steel
Arcelor Mittal-Sp. Pt.
North Star Arizona
Rouge
American Iron Reduction
WCI
LMP Steel & Wire
Wheeling Pitt
The David J. Joseph Co. (Scrap)
CSN
Gerdau Ameristeel
Heartland
Sheffield
Essar
Chaparral
Algoma
Co-Steel
Minnesota Steel
North Star
Sidetul Tultitlan
Quanex Macsteel
Corsa
BlueScope
IMSA Steelscape
ICH/Grupo Simec
Republic
Ternium
Hylsa
IMSA
SSAB
Ipsco Plate (U.S.)
Steel Dynamics
GalvPro-Jeffersonville
The Techs
Roanoke Steel
Steel of West Virginia
Omnisource (Scrap)
1/1/09
Acquiring Company
Acquired Company
OAO TMK
Ipsco Tubular (U.S.)
Tenaris
Maverick Tube (U.S.)
Prudential Canada
Hydril Company
SteelOrbis Training
1970’s
2008
100-140 million tons
100 million tons
80 million tons, 63
in 2009
Approx. 700,000
12 MH/ton
(1978 – 449,000)
<120,000
(Minimills @ 60% - approx.
40,000, <2MH/ton)
100,000
Technology
<20% casters
<10% EAF
95% casters
60% EAF
Location
Primarily Rust Belt & a few
scattered
NW, SE, Rust Belt
(near customers, and
cheap power)
Imports
Approx. 15%
Approx. 25% (peak @
35%)
20%
Profitability
Poor
Good
Marginal
Average Price
$605
$1000???
$600
Production
Employment
short tons
2010
+
SteelOrbis Training
-U.S. has become one of the world’s low cost steel producers, due to metallics
availability, transportation, labor and energy efficiencies, and high utilization
-China, which was approx. 70mmt in 1970’s, today over 500mmt
-Many large integrated producers eliminated legacy costs in 1998-2003 period through
bankruptcies (30 companies)
-World demand for all raw materials has changed from excess to shortages
-Last integrated mill built, Burns Harbor, was 1964-1970
-Growth in U.S. lost to foreign producers (1970 – U.S. approx. 20% of world; today, less
than 10%)
-U.S. steel capacity has been reduced from approx. 170 million tons in the 1970’s, to 130
million tons today, while production has been around 100 million tons
-Steel sales in 1970’s were less than $60 billion USD
-Profitability: net income as a % of sales was only .5 to 2.5% (1974) in the 1970’s.
Insufficient to cover down cycles
-Significant quality improvements
-Metallics yields have improved from 75% in 1970 to over 90% today
-The next challenges are availability of scrap, scrap substitutes, energy, people, and
customers
SteelOrbis Training
U.S. Foreign Trade In Steel Products
(Million Net Tons)-Life
Source – AISI, “The Steel Import Problem.” New York, NY. 1968. Page 6.
in the ‘60
SteelOrbis Training
Crude Simple Estimate – Long Products
SteelOrbis Training
Employment in the U.S. Steel Industry
Source – U.S. Department of Labor. Bureau of Labor Statistics.
SteelOrbis Training
Trade Cases
1. Section 421 – Against Chinese Tires
-
When China joined WTO, part of agreement was a 421 Safeguard to avoid surges &
injuries
Filed by Unions only, case heard at ITC, 4-2 in favor, awaiting remedy recommendation by
ITC
Key is Presidential discretion; under Bush; won 6 cases, but no remedy
Positive from President, low cost legal approach only needs to show surge and harm, not
dumping, subsidies, etc.
2. WTO Complaint By US Government
-
9 materials, some steelmaking raw materials
Seems counterintuitive - don’t want Chinese exports, but the complaint is against hoarding
of materials. But, quotas are illegal.
Chinese defense will be Article 20, preserve raw materials; Coke is a key.
Next steps: consultation between governments, followed by dispute resolution
Allows Chinese finished goods to be artificially cheaper
3. Antidumping/Countervailing Cases
4. 201 Safeguard (2001)
SteelOrbis Training
Trade Update
Item
Plus
Minus
SMA Action
OECD
Only Global Forum
No Measured Outcome
Participate in China in
October – Raw
Materials
NASTC
Hangtime w/NAFTA
Officials; Governments
see value
5 years = Bureaucratic
Press NAFTA
competitiveness Issues
w/industry and
Governments
ITAC 12
Influence to DOC &
USTR
“Confidentiality”; needs
more US producers
TAD Vice Chair
US China Dialogue
Cards on the Table
Even God does not
know next meeting date
Participate w/members
Buy America
Relatively unchanged
since 1932
Negative Press
Hold Course
ITC
Support Members
Lawyers
Continue Support
China Steel Trade
Elephant in Room
Potential Threat
Cases, Press U.S.
Govt.
SteelOrbis Training
Trade Update
Item
Plus
Minus
SMA Action
Customs Fraud
Big Deal in
Circumvention,
mislabeling, duty
avoidance, etc.
Time Lag
Participate in Customs
Training and CSUSTL
Chinese Currency
Now National Issue
7 years
Continue Raise Money
FTZ – Alabama
2nd Filing
Duty Avoidance
including raw materials
Oppose Partial
Approval
Retrospective /
Prospective AD/CVD
Duty System
Support Retrospective
Prospective Less
Accurate
SMA Testified
VAT Taxes
Some Noise
Not Tax Increase
Reduce Personal and
Corporate Tax
accordingly
Trade Legislation
Noise
Not Today
Support Activity; No
Action
SteelOrbis Training
Trade Update
Item
Plus
Minus
SMA Action
Trade Statistics
SIMA Helpful
AIIS Comments
Continue Comments,
press surge
component;
Jobs, Jobs, Jobs
WTO Raw Materials
Case
International Support
Negotiated Solution?
Principle is important
Doha Negotiations
No Progress
It’ll be back
Through ITAC
Climate Change
Not 2010
Waxman, etc.
Press no Global
Exceptions
American Scrap
Coalition
Not just steel
% scrap exports
White Paper underway
2009 Was Only the Second Year Since 1963 in Which
North America Produced Fewer than 9 Million Cars and Trucks
North America Car & Truck Production, 1963-2009
19
18
Recent gains in
North American
car and truck
production
notwithstanding,
it is projected
that it will take
up to five years
to return to precrisis ”normal”
levels.
17
15
14
13
12
11
10
9 million cars and trucks produced
9
1982
8
19
63
19
65
19
67
19
69
19
71
19
73
19
75
19
77
19
79
19
81
19
83
19
85
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
20
03
20
05
20
07
20
09
Million Units
16
Source: Ward’s Automotive.
The U.S. Construction Market Remains Weak
U.S. Single-Family Housing Starts, Q1 2004 through Q4 2009
500
450
400
'000 Starts
350
300
250
200
150
100
50
Q
1
20
Q 04
2
20
Q 04
3
20
Q 04
4
20
Q 04
1
20
Q 05
2
2
Q 005
3
20
Q 05
4
20
Q 05
1
20
Q 06
2
20
Q 06
3
20
Q 06
4
2
Q 006
1
20
Q 07
2
20
Q 07
3
20
Q 07
4
20
Q 07
1
20
Q 08
2
2
Q 008
3
20
Q 08
4
20
Q 08
1
20
Q 09
2
20
Q 09
3
20
Q 09
4
20
09
0
Source: U.S. Census Bureau.
•Foreclosures remain
a problem for both
residential and nonresidential
construction.
•While residential
construction is
projected to increase,
it is not expected to
regain its 2008 level
until 2013.
•The value of nonresidential
construction put in
place fell by 9% from
2008 to 2009, and is
projected to continue
falling through 2011.
SteelOrbis Training
Global Steel Capacity Continues to Increase
World Crude Steel Capacity 2000-2012
World Crude Steel Capacity
CAGR
2,100
1,997
2,055
20
1,917
1,816
1,654
1,583
1,600
1,453
15
1,356
1,350
1,100
1,245
1,062
1,062
1,095
1,170
10
850
600
5
350
100
2000
Source: Worldsteel
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010(e)
2011(e)
2012(e)
0
Current Average Growth Rate (CAGR)
Steel Capacity (million metric tonnes)
1,850
SteelOrbis Training
Crude Steel Supply in China, 2005-2009
(million metric tons)
2005
2006
2007
2008
2009 (e)
Capacity
450.0
530.0
599.0
640.0 (e)
660.0
Production
352.0
416.0
489.0
498.0
500.0
Net Exports
0.5
29.7
41.7
51.0
40.0
Source: Growell Research, “China Steel Capacity Forecast for 2006-2010” and CISA Presentation at OECD, December 15, 2008.
In 2008 China Was Responsible for
Over Half of the U.S. Indirect Steel Trade Deficit
Percent of External NAFTA Indirect
Trade
China as Percent of Total External U.S. Indirect Steel Trade Deficit
2000 - 2008
50
53.5
45
40
39.3
35
30
25
20
15
23.8
25.2
2003
2004
28.5
27.2
2005
2006
20.5
17.6
10
5
0
2001
2002
Sources: US Department of Commerce for trade $
balances; AISI estimates for indirect steel trade
2007
2008
Over the Last Three Years, China’s Increase In Steel
Production Far Exceeded Total 2009 Steel Production
In Both Japan And The United States
600
500
400
300
Increase in Chinese Crude
Steel Production 20062009
200
100
0
NAFTA Crude Steel Production in
2009
Japanese Crude Steel Production in Chinese Crude Steel Production in
2009
2009
Source: Data for China taken from World Steel Dynamics, Inside Track # 102 (Jan. 15, 2010). Data for Japan and NAFTA taken from the World Steel
Association web page.
Last Year, China Accounted for Almost Half of
Total World Crude Steel Production
China’s crude steel production
600
50
Chinese crude steel production as
a percentage of total world
production
45
500
40
35
30
percent
millions of MT
400
300
25
20
200
15
10
100
Source: World Steel Dynamics, Inside Track # 77 (May 30, 2007); World Steel Dynamics, Inside Track # 102 (Jan 15, 2010).
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
20
09
20
07
20
05
20
03
20
01
19
99
0
19
97
19
95
0
1995
5
SteelOrbis Training
U.S. Scrap Consumption and Exports
90
80
70
Million Tons
60
50
Exports
U.S. Consumption
40
30
20
10
0
2000
2001
2002
2003
2004
2009 – Exports
Imports (e)
U.S. Consumption
2005
2006
22.3mt
3.0mt
48.0mt
2007
2008
2009
SteelOrbis Training
The Worldsteel Short Range Outlook
United States
Million MT
2009 (e)
2010(f)
Canada
Change
(%)
Million MT
2009 (e)
Mexico
2010(f)
Change
(%)
Million MT
2009 (e)
2010 (f)
Change
(%)
Crude Steel
Use
65.1
81.8
25.5%
Crude Steel
Use
10.6
13.1
23.9%
Crude Steel Use
17.7
22.1
24.5%
Finished
Steel Use
57.4
72.7
26.5%
Finished Steel
Use
9.5
11.8
23.9%
Finished Steel
Use
13.9
15.5
10.9%
Exports
8.5
11.3
32.9%
Exports
4.9
6.4
29.6%
Exports
2.0
2.4
20.0%
Imports
12.9
13.7
6.2%
Imports
6.0
7.7
28.3%
Imports
3.2
3.6
12.5%
Source: Worldsteel Economic Studies Committee, April 2010
Download
Related flashcards

Spanish economists

54 cards

Demographic economics

14 cards

Create Flashcards