Steel news of the week - Americas
What do candles and steel have in common?
The Government Accountability Office (GAO) is raising an eyebrow at law designed to protect
US companies from unfair foreign trade.
In a report Monday, the GAO said that the so-called Byrd Amendment, named after its chief sponsor Sen. Robert Byrd, has only benefited a select group of companies.
The law has distributed $1 billion to American companies from 2001 through 2004, two-thirds of which have gone to three industries: ball bearings, candles, and steel.
Almost half of the $1 billion went to only five companies.
The Timken Company, a major contributor to George W. Bushs re-election campaign, was the largest recipient, receiving $205 million.
The law has already been ruled a violation of global trade rules by the World Trade Organization and a number of countries are imposing retaliatory tariffs on up to $134 million in
US exports.
Those against the law may use the GAOs report to try to repeal it.
Taconite production trimmed
Due to softening of the domestic steel market in the first half of 2005, several Iron Range taconite nugget producers are curtailing
production to match demand.
The $29 million restart of Furnace No. 5 at Cleveland-Cliffs Silver Bay plant has been delayed and
US Steels Minntac Mine in Mountain Iron is shutting down its agglomerating and pellet producing lines.
Cliffs has reduced its 2005 sales forecast by approximately 1.5 million tons, said company spokesperson Dana Byrne. Therefore, Cliffs does not need the additional capacity from Furnace 5 at this time.
John Armstrong of
US Steel said the shutdown of their lines will help the company match pellet inventory to customer demand as well as reduce high energy costs.
No layoffs from either company have been planned.
Another example of how bad the auto industry is hurting
Delphi Corp, the United States largest supplier of auto parts, has asked former parent General Motors Corp. for $6 billion to protect it from bankruptcy.
The Troy, Michigan company plans to use the cash from GM to reduce expenses by offering long-time workers bonuses to retire, quit, or accept lower pay. The money would also be used to pay for pensions and health care for the retirees, said Delphi.
GM is said to be considering the request, though its decision may depend in part on how many concessions the company can wring from the United Auto Workers (UAW) union.
GM is attempting to save $5.6 billion in annual health-care expenses by trimming worker benefits.
Analyst Sean McAlinden of the Center for
Automotive Research said the decision to help Delphi could pay off for GM if Delphi buys out its high-seniority UAW workers, who receive $27.50 an hour, and replaces them with workers who make $14 an hour. The company could save even more if Delphi also encourages the UAW to accept cheaper health care for its own workforce.
Of course, this transaction would require company approval to throw all scruples to the proverbial wind.
Steel Technology predicts lackluster fourth quarter results
Steel Technologies Inc. announced today that the company expects fourth quarter results to reflect lower-than anticipated shipments and further margin compression.
The company expects shipments to be 5 percent below projections stated in July due to the July-August seasonal softness, compounded by excess inventory throughout the supply chain.
For the three months ended September 30, 2005, the company expects sales to be around $200 million and for tons shipped to total 250000. Due to these factors, Steel Technologies predicts earnings per diluted share for the quarter to total approximately $0.06 and $2.77, respectively.
The company will release final fourth quarter and year-end results November 1, 2005.
Armtec supplies pipe for environmentally-friendly wind towers
Armtec Infrastructure Income Fund announced it has supplied large diameter corrugated steel
pipe to build 47 wind towers near Fort McLeod in southern Alberta, Ontario.
The company manufactured the 94 pieces of nine-meter long
pipe at the customers site, using a mobile mill to eliminate shipping costs.
Wind tower projects such as this one are widely expected to be a growth market as governments look for environmentally friendly sources of new power generation, said Charles Phillips, President and Chief Executive Officer of Armtec Limited Partnership.
The
pipe is being installed vertically in the ground and the void between each section is being filled with reinforced concrete to form a stable foundation for the turbine. The mobile mill was contracted from Contech
Construction Products Inc.
Armtec is a leading manufacturer and marketer of drainage products and engineered solutions for residential and agricultural drainage in
Canada.