Surge in Chinese Aluminum Semi Exports
NAM/ACCF Study on Waxman-Markey Bill
Midwest Industrial Energy Efficiency Exchange
CastExpo'10: March 20-23 in Orlando, FL
Room Block for Plant Management Closes Sept 4
Is a Surge in Chinese Aluminum Semi Exports an Indicator of Rising Global Demand?
The aluminum flat rolled products market is appearing to go its own sweet way. Mills
are reporting rising order books stretching into the fourth quarter and even daring to
try for premium increases. The problem appears most acute in Asia with Chinese mills
exports of semi finished products up 20% in June and expected to be a further 8% more
in July according to Reuters. The report is quoting export numbers around 120,000
metric tons of semis in June and estimating July at 130,000. Exports from China are
supported by a 13% vat rebate whereas primary metal is discouraged with a 15% export
tax, although up to now exports have been the last thing traders were considering as
record quantities of primary metal has flooded into the country. Indeed it is the
presence of this imported metal that could be helping semi’s producers compete in
export markets. Traditionally Chinese producers and the SHFE local market price have
been at a premium to world prices making it very difficult for semi producers to
compete, but with access to metal purchased earlier this year when aluminum was 20-30%
lower, semis producers could be enjoying a temporary cost advantage.
Aluminum sheet and coil mills elsewhere appear to be equally busy as demand has picked
up a little in Europe and North America. We understand many Europeans are on a reduced
working schedule which is restricting supply, but they are reluctant to ramp up until
they can see a clear recovery. Supply has also been restricted from some Asian sources.
Our office in India for example reports the country has all but banned Chinese imports
by imposing massive import duties on flat rolled products forcing consumers to buy from
domestic producers. In addition, Hindalco had a major hot mill failure at their
Renukoot mill on June 24 taking more capacity out of circulation. Indian mills are to
all intents and purposes out of the market now until 2010. Middle Eastern distributors
are casting around for flat rolled sheet supplies as mill deliveries rapidly move out
to the year end.
Many commentators have taken the increase in mill lead times as a sign that
distributors are re-stocking but our friends at Purchasing.com reported this week that
distributor inventories continued to fall in July and attributed the increased demand
seen by mills as the distributors and consumers being driven to buy more hand to mouth
from the mills as they face stock outs in many line items. This is undoubtedly creating
a pent up demand that only requires a modest increase in real consumer demand to impact
prices. The reason we have not seen significant distributor buying so far is probably
one of timing. The distributors are not seeing sufficient strength in consumer demand
to drive them to re-stock. The problem with watching distributor inventory reports
though is they are historical. Mill lead-times and conversion premiums are the most
reliable indicator of what’s to come and both have been in positive territory in recent
weeks.
–Stuart Burns
NAM/ACCF Study on Waxman-Markey Bill
The National Association of Manufacturers (NAM) and the American Council for Capital
Formation (ACCF) have just released an important analysis of the economic impact of the
climate change legislation the House passed in June.
This comprehensive study demonstrates that enacting H.R. 2454, the American Clean
Energy and Security Act – commonly known as the Waxman-Markey bill – will cause
serious, long-term damage to U.S. growth and jobs, with the manufacturing economy
taking an especially hard hit.
The analysis also includes 15 state-by-state breakdowns, confirming that states with
large manufacturing sectors will suffer most from the higher energy costs caused by
Waxman-Markey. We will release data for the remaining states in the coming weeks.
The key findings:
* Cumulative loss in GDP up to $3.1 trillion (2012-2030)
* Employment losses up to 2.4 million in 2030
* Manufacturing output decreases from 5.3 percent to 6.5 percent by 2030
* Residential electricity price increases up to 50 percent by 2030
* Gasoline price increases (per gallon) up 26 percent by 2030
This NAM-ACCF analysis was conducted by the Science Applications International
Corporation (SAIC), the same group that conducted our 2008 analysis of the
Lieberman-Warner bill. For inputs, we made assumptions using the best public data
available to reach the most accurate assessment on the bill’s impact on jobs and the
economy. The NAM/ACCF analysis used the most recent version of the Energy Information
Administration (EIA) Annual Energy Outlook, which includes the stimulus law enacted in
February 2009, as well as the original stimulus law enacted in October 2008, and the
Energy Improvement and Extension Act of 2008. All of our assumptions are available
publicly on our website. For more information on our assumptions or detailed findings,
please visit
www.nam.org/climatechangereport.
The issues of climate change, Greenhouse Gas emissions and cap-and-trade legislation
will be front and center when Congress returns in September. Given the critical stakes
for manufacturers and the nation, the NAM believes Congress should base its decisions
on the best data and analysis available. This study provides that information, and I
encourage you to read it and share it with employees and anyone who is interested.
Save the Date: Midwest Industrial Energy Efficiency Exchange
The US Department of Energy has asked the Energy Resources Center at University of
Illinois to invite your organization to attend and participate in the USDOE Industrial
Technologies Program’s (ITP) “Midwest Industrial Energy Efficiency Exchange” on
September 9th & 10th, 2009, in Detroit, MI. This event will be hosted by Michigan
Governor Jennifer Granholm, who plans to invite other members of the Midwest Governors’
Association. The primary focus of the summit will be to encourage development and
funding of energy efficiency capital projects for the industrial sector in the Midwest.
In conjunction with the Conference a webinar on the first morning’s presentations will
be available for those unable to attend in person.
There is no charge for attending the event or for those participating in the associated
webinar, but space might be limited, so please register for either the Exchange or the
associated webinar at www.midwestexchange2009.govtools.us.
For more information, please click here.
CastExpo'10: March 20-23 in Orlando, FL
CastExpo'10 will be held March 20-23 in Orlando, FL. Some highlights of
this conference include:
Cast in North America exhibit
This exhibit will showcase North American Casters. It will also feature
the winners of the 2010 Die Casting Competition.
Free Software Demonstrations
Stop by the NADCA bookstore for free software demonstrations given
daily. Along with the demos you will also receive trial versions of the
software.
2010 Die Casting Industry Award Banquet
This banquet will feature the awards winners of prestigious industry
awards, safety awards and our annual congress awards.
Room Block for Plant Management Closes Sept 4
September 23/25 NADCA will host our annual Plant Management conference.
This two day event will feature presentations on the State of the
Industry, Carbon Footprints, and semi-solid metal processes. It will
also feature a plant tour to Chicago White Metal. There has been a NEW plant tour of Acme die casting added!
Included in the low registration fee of $250 for NADCA Corporate Members is breakfast,
lunch, an evening reception and a group networking dinner. Sign up
today at: http://www.diecasting.org/meetings/pm
Just added: Diran Apelian to speak on SSM-Squeeze.
