In late May, I posted an article here called “What to Make of Anshan’s investment in the USA”. It was in reference to the investment by Chinese steelmaker Anshan in John Correnti’s Steel Development Company. The point of my piece was to explore why Anshan might do such a thing. The only real sense I could make of it was as an opportunity to provide US exports to China in place of importing considerably more than one ton of raw materials to China to make rebar. It was a contrarian attempt at finding reason where none seemed to exist.
Since my posting, a video has appeared which offers an explanation for the investment directly from an Anshan executive’s mouth. No, he doesn’t say they’ll export rebar to China, but I don’t think that would be a wise thing to say anyway. But his purported investment reasoning makes no more sense to me after watching the video than it did when they first announced. You be the judge. The video is below and, since a Nerds technical hitch about a week ago wiped out my original post, the original post (without the links) is re-posted below that.
[Original post from May 24th] There’s plenty of comment to go around on Anshan’s investment in John Correnti’s Steel Development Company, a rebar mini/micro-mill building vehicle that plans to build four or five mills in the US.
The objections to the deal are various. To some it’s an empty and irrelevant political gesture full of political meaning ahead of US-Chinese talks in Beijing. They claim that it’s akin to the investments by Japanese steel producers in the US following the migration of Japanese auto manufacturers here in the 1980’s to calm complaints about Japanese car imports. Those steel investments didn’t end too well, even though the car operations were very successful and helped save the North American steel industry by teaching it what quality looked like. [click to continue…]
Global crude steel production kept close to its record-setting pace in April. According to worldsteel’s most recent production report released today, crude steel production was a little over 124MT in May, up 29% from the same month in 2009. Capacity utilization sagged a little to 82% globally. All the data are below:
Based on reported import licenses, US long products imports dropped 12% from 273,000 short tons in April to 239,000 tons in May. This can be compared to long products imports of 98,000 tons in May 2009, 242,000 tons in May 2008 and 591,000 in May 2007.
The decline in May was driven by a 48,000 ton reduction in rebar imports mainly due to lower Turkish imports. In contrast, wire rod imports increased by 10,000 tons and beams imports increased by 9,000 tons.
Import licenses reported up to June 15th were 117,000 tons which indicates that full-month June imports should be slightly lower than May imports. Licenses reported so far this month for beams are down for a number of countries but particularly for Luxembourg.
Based on reported import licenses, US flat products imports climbed 8% in May compared to preliminary April census data. Imports increased from 556,000 short tons to 602,000 tons. This can be compared to 350,000 of flat products imports in May 2009.
The increase was driven by hot roll imports which rose 17% to 354,00 tons due to rising imports from Korea, Australia and Finland. Hot dip galvanized imports rose marginally by 3% and cut plate and cold roll imports dropped.
It’s too early in the month to accurately forecast full-month June imports, but I will update the spreadsheet below with the newest June 15th data next week.
Gerdau’s EBITDA for Q1 was $172 per ton, a very strong result and the third highest we’ve seen among companies tracked in the Nerds of Steel earnings spreadsheet. Gerdau Ameristeel also had a good quarter, reporting EBITDA of $74 per ton.
If you’ve never seen it, those nice people at ArcelorMittal provide an extensive Excel spreadsheet called the ArcelorMittal Model to help with analyzing their company. The spreadsheet provides, in considerable detail, data and metrics for each of the ArcelorMittal businesses. You can download the latest one here or you can see all of the data below in one of our now famous Nerds spreadsheets.
