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The United States and China began the first round of their biannual trade negotiations yesterday, with talks set to focus on technology products. The US hopes to be able to negotiate a reduction in the duty obligations of firms exporting to China, a vital market for America’s leading industry.
Although both countries are signatories to the WTO’s ITA, which removes tariffs on many such goods, China requested 57 items be placed on the exclusion list, whilst the US protects its Fibre Optic. If a deal can successfully be achieved, then this is good news for the steel industry, which supplies vast quantities of goods to the technology firms.
Steel has enabled our modern way of life. It has helped lift societies out of poverty, spurring economic growth, and continues to do so around the world today.
Iron, steel’s precursor, fueled the industrial revolution starting in 1750, enabling manufacturing equipment in factories and rail transport. Modern steel-making was developed 150 years ago with the invention of the Bessemer process allowing for the affordable mass-production of steel (an iron alloy). This set off a second industrial revolution, and sustained economic growth.
Today, steel is one of the most common materials in the world. We rely on it for our housing, transport, food and water supply, energy production, tools and healthcare. Nearly everything around us is either made of steel or manufactured by equipment made of steel.
Steel is inextricably linked with economic growth and prosperity, as shown in Figure 1. This figure estimates stocks of steel per person, based on their current wealth (GDP per person), and suggests that as a person’s income increases they build up their stock of steel, which then tends to reach a plateau.
Developing societies require steel to build new roads, railway lines, buildings and bridges. They also need it to lay new pipelines for gas, water and sanitation and to build factories and machinery.
Once basic infrastructure needs are met and GDP continues to rise, the demand for consumer goods such as washing machines and refrigerators increases, as does the need for mobility via trains, buses and automobiles – all of which require steel for their production and related infrastructure (stations and fueling). Urbanization is also enabled by steel – e.g. allowing for high-rise buildings.
Steel stocks per person, or the demand for steel in developed societies tends to plateau as a certain level of wealth is reached and the need for new infrastructure and buildings are satisfied. Per capita demand tends to remain high in areas with high industrial production, contributing to sustained economic growth.
For example, steel demand is high in South Korea due to the country’s high level of steel exports in steel-containing goods such as ships and cars.
It is also high in Japan because of shipbuilding, engineering and automotive – it remains a big net exporter of automotive vehicles. Steel is also required in both of these highly urbanized countries for highrise buildings that are earthquake resistant.
Stock levels for steel in China and India in particular are expected to grow significantly by 2050 to meet their growing need for buildings, infrastructure and transport in a sustainable way. There will also be strong growth in steel production in other areas of the world where steel will be vital in raising the material and social welfare of developing societies.
Steel will continue to be needed in both developed and developing countries in advanced and new applications that support sustainable development and thereby, a green economy.
Year 2013 experienced a modest expansion in the steel production of only 2.4% to 1.582 million tonnes. With this figure we have to realize that it covers also a range of national and regional variations. On the other side, these variations are milder than it was in 2008 when the financial crises fully hit in many countries and weakened the markets for years. We can call this is a good sign of stability and recovery, but nothing else.
Economies in Europe and the Japan economy have been slowly improving, while the steel production in China, the world leader in this industry, is slowing down.
Focus on China
Still, China remains the worlds number one producer of steel. China is producing 49% of world’s total steel and in 2013 China’s production increased by 8.7% to 779 million tonnes.
Given the past growth of the Chinese steel production, it is expected to hit 50% this year. Althought the home production is increasing, the home demand is decreasing. Already in 2013 China’s output was greater than the demand on the internal market which ensured China’s position of the world’s number one steel exporter.
Looking at this year data, it is visible that the production growth is slower than in the previous years. Year-on-year data of the first four months of 2014 shows output of 271.9 million tonnes. Chinese goverment is becoming more and more concerned about the outdated technology in the steel industry and the level of overcapacity. It is attempting to slowdown the steelmaking growth in order to improve the industry’s economic viability.
Focus on Europe
The European Union is the second largest steel producer. Still shaken with the recent financial crisis, the steel output declined last year by 2% after a fall of 5% in 2012. However, the production rose in the first four months by 6.2%. The recovery in the EU region is very slow. The 2013 production level was 22% below its pre-crisis peak of 210 million tonnes in 2007.
Lookin at the internal market in the EU, the numbers are looking much better. As an interesting fact, the internal steel market within the EU region is matching with the size if the internal steel trade in Asia!
The forecast for the EU market is to rise by 2.1% this year and 2.4% the next year.
Jovelle W. // SMC Editor
International Trade and Marketing Specialist
Data in this article are taken from Metal Bulletin Monthly Magazine June 2014
This week, Shanghai Metal Corporation (SMC) welcomes our summer international interns to Shanghai! Our international interns come from all over the world and will be the new face of SMC.
From international trade, marketing, sales, to human resources, SMC is happy to provide the most unique internship experience as they have an opportunity to communicate with international clientele from around the globe. As SMC’s young brand ambassadors, the interns aim to share their knowledge and talents in an effort to promote the manufacture corporation as a fun and viable industry.
They will be participating in marketing and sales strategies that will allow continuous assistance for their specialized products through various social media networks but also gain personal experience through cultural diversity in and out of the work environment.
Meet our International Interns:
Our international interns will set the vision and the strategy for how our products and services will reach thousands of customers. They will be partnered up with a highly a engaged team and bring creativity to transform the business, as well as contributing a geocentric approach to international business.
Since the end of the 21st century China has become by far the largest steel producer in the world. Steel production has been growing nearly 10% per year in China, 6% in India and over 3% in Brazil.
Due to infrastructure projects in the construction industry, China has secured its dominant position in the world for steel production. Many of China’s bridges are made from steel material so when it comes to records, China holds the three top ranking spots in the world for arch bridges.
The Chaotianmen Bridge spans over the Yangtze River in the city of Chongquing, China. The steel truss arch spans 552 meters and reflects the achievements in modern industry, strength, and structural beauty. The bridge was opened in 2009 and is the world’s largest arch bridge.
Shanghai has become a symbol of the recent economic boom in China. One of Shanghai’s own Lupu Bridge ranks second in the worlds longest arch bridges at 550 meters. The three-span steel arch bridge crosses the Huangpu River connecting the city’s Luwan and Pudong districts.
Opened in 2012, the Bosideng Bridge is the third largest arch bridge in the world with a span of 530 meters. The concrete filled steel tubular arch bridge is a highway bridge that crosses over the Yangtze River in Hejiang County, Sichuan, China.
There is no doubt that China takes the market in steel production. Chinese steel is known as some of the most durable steel on the market. Bridges require proper durability in order to stand up to a variety of common building issues such as mold, rot, and weather resistance.
With the advent of changing consumption patterns in the mainland economy, the logistics property market is expected to increase at an incredible rate. Despite recent slowdowns in trade, some analysts predict that by 2029 the value of the logistics property will grow to a figure of about US$2.5 trillion. Much of this expected property value growth is fueled by consumption-lead changes within the mainland economy. According to the global real estate consultancy, Colliers International, “The total value of investment in warehouses and distribution centers there jumped 38.8 percent year on year to 3.2 billion yuan (HK$4.04 billion) last year, while the number of deals surged 85.7 percent.”
The surge in property values can be attributed to the law of supply and demand. Access to land remains problematic as local governments still remain hesitant to allocate the land to the logistics industry. Some corporations, however, are overcoming this property crunch by partnering other financial institutions to offer lucrative deals. One such company is Shanghai based Global Logistic Properties.
Global Logistic Properties is China’s largest owner of warehouses and distribution centers. It is betting on the unencumbered growth of the logistics property market, and as such is seeking to boost access to land. To achieve this Global Logistics Properties has signed a US$2.5 billion equity agreement with three financial firms, the Bank of China, Beijing-based China Life Insurance and private-equity firm Hopu Investment management.
If Beijing’s promise of economic growth based on increased domestic consumption is realized, logistics storage facilities such as those sought by Global Logistics Properties will be in high demand. New storage facility properties will enable faster delivery times to Chinese consumers as well as same-day delivery options.
Such storage facilities are increasing in importance, as e-commerce represented 22 percent of Global Logistics leased area in the country in 2014, up from 4 per cent in 2010.
To view the Logistical areas in which Shanghai Metal Corporation operates please refer to the below links.
For products related to the the maritime transport industry, click here
To view additional metal and construction products as well as SMC company information check out our website: click here
As the world economy is constantly evolving, our demand for material goods increases along the way. Steel, the recycled material is one of the top products in the manufacturing sector of the world. It is a leading supplier in industries such as automotive, construction, transport, power and machine goods.
The steel industry is a booming industry due to the increasing demand of development projects around the world. The increasing need of steel in developing countries for its infrastructural projects and real estate projects has pushed the companies in this industry near their operative capacity, thus creating strong financial condition in the last decade.
The main demand of steel industries comes from the construction industry. With developmental works on the rise in both developed and developing countries, the rise of housing and construction sector is the largest consumer of steel today, using around 50% of world steel production.
The automotive industry is quickly rising as a potential demand for steel industries because the use of steel in vehicles cause the weight of the same to lesson by almost twenty five percent of the material. On the technological front, steel is making a rapid improvement with the implementation of cutting-edge technologies. As we see economies grow around the world, we also see that steel is a key driver of the world’s economy. Click here to visit Shanghai Metal Corporation’s website.
Steel industry in the global market:
Asian countries have dominated the production of steel in the last twenty years.
India is also among the one of the fastest growing economies in the world and has been considered to be a potential global steel hub.
India, Brazil, South Korea, and Turkey are poised for future production growth and all have entered the top ten producers list in the past 40 years.