b'12American Journal of Transportation ajot.comSteel: Is China overproducing again? (DITCHcontinued fromutilize the exclusions already page 10) grantedbytheCommerce indicatedthatsteelisinDepartment,anassociation By Peter Buxbaum, AJOT shortsupplyintheUnitedreport said, those customers Statesandpricesaresurg- wouldnotneedtopurchase TheChinesegovernmenthascommittedAsurprisinglyrobustrecoveryinChinaing. Unfilled orders for steelone pound of American-made more than once to curbing its excess steel-pro- accounts for last years small contraction inin the last quarter were at thealuminumcansheetforthe ducing capacity, a condition which contributedsteel demand, according to Saeed Al Remeithi,highestlevelinfiveyears,next two years.to a pre-COVID glut of steel in global markets.chairman of Worldsteels economics commit- while inventories were near a Detractors may rightly be skeptical of Chinastee.SteeldemandinChinasawgrowthof3-1/2-year low. A c omplexi ssueintentions, as previous cuts years ago did little to9.1% in 2020, while demand in the rest of theAsfarasjobsgo,theTheAmericanIronand change global market conditions, and recent dataworld steel contracted by 10%.Coalition of American MetalSteelInstitute,whichrepre-doeslittletosupportChinascredibility.SteelAlmostalleconomicactivityexceptManufacturers and Users, insentsmanydomesticsteel-productioninChinanearedanall-timerecordretailingresumedfullproductivitybyMayarecentlettertoPresidentmakers, supports maintaining in March, when production increased by 19.1%inChina,accordingtoaWorldsteelreport.Biden,statedthattheSec- the Section 232 tariffs. AISI over 2020. Production during the first quarter ofAfter contracting by 6.8% in the first quartertion 232 steel and aluminuminterim CEO Kevin Dempsey 2021 increased by 15.6% year over year. of2020,ChinaseconomyrecordedannualtariffshavedamagedU.S.noted there are indications of But other data tell a different story. Steelgrowthof2.3%in2020andisexpectedtoconsumingindustriesthatincreased steelmaking capac-futuresinChinareachednewhighsinlateaccelerate to 7.5% or higher in 2021. employmorethan6.8mil- ity in China, and with it, the April,asignalthattradersbelievethattheTheChinesegovernmentsmeasurestolionworkers,comparedtopossibilityofanincreased nations commitment to lowering productionstimulate the economy, including new and accel- 140,000intheU.S.steelcapacity-production gap that is real. Rebar futures in Shanghai climbed toerated infrastructure projects, allowed the coun- industry.Accordingtoanarrowed between 2016 and their highest level since began trading in 2009,trys construction sector to return to normal atstudy by the Federal Reserve2019.Wereverylucky and hot-rolled coil reached a seven-year high,the end of April 2020. Automotive production inBoard of Governors, the tar- that we have not seen a new both advancing over 3% in a week. China contracted by 45% during the lockdown,iffscost75,000U.S.manu- surge in imports in the wake Reports indicate that Handan city in Hebeibut declined by only 1.4% for the whole of 2020,facturing jobs. of COVID-19 as we recover province plans to curb output, and some millsindicating a strong recovery during the secondThe tariffs have generatedfromtheshockthisyear, intheFengrunareaofTangshanhavehaltedhalf of the year. Steel use in China rose by 9.1%someotherperverseresults.Dempseysaid,andIthink productionaltogether.Tangshanalreadyfacedin 2020, according to Worldsteel, and demand isTheAluminumAssociationthat is due in part to the steel productionrestrictionsimposedbythecentralexpected to grow by 3.0% in 2021. noted recently that the cur- tariffs being in place.government as part of a push to control emissions.DomesticdemandmaybeabsorbingrentSection232productButnotallU.S.steel Productionincreasesdontnecessar- the increases in Chinese steel production, soexclusionprocesshasinad- makers are on board with the ilytranslatetooverproduction,sincesteelincreases dont necessarily signal overproduc- vertentlymadetheUnitedtariffs. Tamara Lundgren, CEO demand is on the rise, globally and especiallytion. But the tea leaves are difficult to read.States a magnet for imports.ofSchnitzerSteelIndustries, inChina.Aneconomicboom,particularlyAreportfromafuturesanalystinShang- For example, the CommerceInc.,arecycledsteelmanu-seen in the construction and automotive sec- hai maintained that declines in production inDepartmentgranted8.3bil- facturerbasedinPortland, tors and which began as early as last February,Hebei are seen as a prelude to the cut in totallionpoundsofaluminumOregon, allowed that the Sec-is now underway in the Peoples Republic.production this year. On the other hand, thecan sheet exclusions in 2020,tion 232 tariffs gave the domes-The World Steel Association recently fore- report added, handsome profits could stim- morethantwicethesizeoftic industry a boost, but added cast that steel demand globally will grow byulate mills in other regions to boost productionthe entire annual U.S. market.(DITCHcontinued on 5.8% in 2021 after declining by 0.2% in 2020.as much as they can. Ifimportersweretofullypage 16)Bulk. Breakbulk. And so much more.Fairless Hills, PA - Palm Beach - Port Canaveral - Port Everglades - Port Manatee - Wilmington, DEportcontractors.com 1-800-792-PORT'