china steel to build 5 new plants in the US
What is up with China building 5 new steel plants in the US
Where did you hear or read this information ?
Industry week online here it is
China's Ansteel Group Signs Deal to Build Five U.S. Plants
The deal was structured to meet U.S. government requirements that steel used in infrastructure projects funded by the stimulus package comes from local manufacturers.
By . Agence France-Presse
May 17, 2010
BRIC Nations to Drive Global Growth
U.S. Consumer Prices Down First Time in a Year
EU Fines Samsung, Infineon, Toshiba and Others for Operating a Cartel
Hewlett-Packard Profit Surges as Tech Spending Revives
Toyota to Recall 11,500 Lexus Vehicles
Changes in Global Business Environment Spur New Business Ideals
More News »China's Anshan Iron and Steel Group said on May 17 that it had signed an equity investment agreement with U.S. mill Steel Development Company that includes the construction of five new U.S. plants.
The first plant will be built in Amory, Mississippi and will mainly target the southeastern United States and Latin American markets.
The deal, which was signed May 14, was structured so as to meet U.S. government requirements that steel used in infrastructure projects funded by a massive American stimulus package come from local manufacturers.
The Mississippi state government will help subsidize the Amory plant.
Chinese commerce ministry spokesman Yao Jian said the government supported efforts by the country's steel companies to move into overseas markets. "The cooperation between China and the United States in the manufacturing sector, including the steel industry, will help improve [China's] manufacturing technologies, the use of clean energy, and so on," he said at a briefing. "I think it is a good thing."
Copyright Agence France-Presse, 2010
This is nothing new.
First- despite whining to the contrary, there is a very strong market for steel in the USA. It has been running around 100 million tons a year.
Second- we have consistently been making, here in the USA, about 80% of our domestic consumption.
People think all steel is imported, but, in reality, that isnt true at all. High end die making steels are imported from Germany and Japan, low end rebar and cheap pipe is imported from third world countries, but most steel we use here (80% is definitely "most") is made here.
Third- american investors have not been investing in basic industry for probably 20 years. There are bigger profits to be made on Credit Default Swaps, Forex, Hedge Funds, and SubPrime Mortgages.
So foreign companies have been buying, and BUILDING, steel mills in the USA for at least 20 years now. Besides the Chinese, the Russians, the Indians, and the Germans have all invested Billions of dollars in US steel mills.
Thyssen Krupp, a german company, is currently building a $5 Billion dollar plant in Alabama.
People who are willing to accept a reasonable, as opposed to huge, profit, make money in steel, and most of those people these days are not americans. We, as investors, are too greedy and short term oriented to build a steel mill.
But of the 5 or so mills already under construction in the USA right now, before THESE five, all, to the tune of 20 or 30 billion, are foreign owned.
Buy some stock in Nucor, or another US steel company.
I only hope that someday your grandson, and mine, are able to work hard and long hours so that one day they will be honored deeply to be able to rush home and tell their own children that they had been given on that day the privelege of cleaning Mr. Wu's Mercedes Benz. It will become family lore.
But really, what's the big deal about 5 new steel mils anyway? Hell, around here they have built five nail salons within a 1 mile radius of me. There are also five new insurance agencies, five new haircut places, and five new ice cream stores. How dare you imply American industry is taking a back seat to any! Damn you, sir!
As far as I am concerned, the more steel mills in America the better.
Steel price increases always hit the small machine shop (like mine) square in the gut. Customers simply won't allow much, if any, adjustments to cover steel price inflation. So, I grin and bear it, and wave goodbye to the lost profits going out to the steel giants.
It would be nice if all American steel mills were American owned, but as said, the big-money people in America want huge profits...not steady, reasonable profits.
Warren Buffet might be on the verge of leading these greedy scoundrels in a more conservative direction...as he bought the steady-profit-producing BNSF railroad for 44 Billion a few months back. Go Warren!!
The only difference is where the money at the top goes to, domestic production is domestic production. In general large american manufacturing firms haven't wanted to, or haven't been able to invest in large capital expenditures for production. Some of the price per dollar diferences come from the fact that foreign competitors who just start in the game have the capital to invest in the latest highest efficiency equipment. An exisiting plant has a large legacy cost and can't afford to go off production for the weeks and months to do hundreds of millions in upgrades to infastructure.
It's the early adopters syndrome, if you adopt a technology early, sometimes it's more costly to replace infastructure than the new investment which is starting with a blank slate. However if you don't adopt you're no longer competitive.
But But But, people call my friend a traitor for driving his South Carolina made BMW, and I get an "atta boy" for driving a Mexican made Dodge.
Originally Posted by MetaRinka
Like most I'm not a fan of China but, somebody has to employ American's and American companies don't seem to be willing to do that.
Not like it really matters, global economy and all that. Really, who "owns" Ford? And if any of these companies are publicly traded.....
Jobs here are a good thing.
Our integrated mill, Edgar Thompson Works, Braddock, PA, maintained steel making and heating and rolling ingot into slabs while we installed a twin strand continuous caster.
Full production, right up through shakedown and proving of the new process. We didn't stop production, simply built a 500 million or so process on the other side of the wall.
It made for better product, with less loss from cropping the good part of the slabs for remelt. Probably 10 to 20% improvement in production.
By the same token, our Clairton Coke Works is still slated to make a 1.2 billion upgrade, having torn down I forget how many batteries, yet still making coke from the ones that are still left, whole building new, larger, cleaner, more productive, and better ones.
I think we use or sell near all we can make. Coke is probably our biggest money maker. A while back I saw a price of over 700 bucks a ton.
It isn't that they can't afford to lose that production. It is that most companies would prefer to get someone elsewhere, preferably off shore, to make the stuff they really would rather not get their hands dirty with.
On January 1, 1873, ground work broke on the Edgar Thomson Steel Works
History: Edgar Thomson Steel Works - Wikipedia, the free encyclopedia
I believe The Edgar Thompson Works is the only steel Mill left in Allegheny Co. Pa.
During World War II, Pittsburgh produced 95 million tons of steel:
Last edited by paul39; 05-19-2010 at 06:44 PM.
Keerect, and during WWII, Homestead Works had the 120 and 160 inch mills that made plate for many of the ships needed for the war effort.
ET was a kiss ass to Edgar Thompson, then chairman of Pennsy RR, rail being one of Carnegie's most lucrative products, in an expansive time for rail travel. Carnegie bad mouthed all his competitors till they were near bankruptcy, then magnanimously bought them out for pennies on the dollar.
That man, nor his henchman, Frick, do not rate on my "Hero list".
Gmatov there is some infastructure upgrades going on. But when you compare the overall picture on the risk,return and cost of doing upgrades as opposed to virgin construction it gets pretty iffy. Basically put infastructure upgrades don't offer a huge return on investment. I think the problem with american industry is that on paper if you have only 10 dollars to spend you'll save more money by buying cheaper material or services directly rather than spending 10 dollars to upgrade a plant that will save you 10% over 10 years.
I'm not defending it, just saying when you do the math the bean counter at the top wants the best return with least risk. Maybe I'm bitter because I had a 200,000 capital project request turned down today.
BUT, Russian, Chinese, Indian companies are also buying established OLD mills, and either running them as is, with little improvement to plant, or throwing money at them to improve efficiency.
It really doesn't matter. They see money to be made. And they don't insist that the Union be ousted before they will buy. They work with the Unionized workforce, and they make product and money.
Their passion is making steel. Not investing in derivatives.
So let me see if I have this figured out... when we're more than broke and China gets pissed and goes to war with us because we cannot pay our off debt to them, if they own the steel mills and most of the manufacturing we're pretty much stuck learning Chinese and bowing before the President of The Peoples Republic of China.
Got it... and thanks uber-scholars in American business schools for breeding a generation of short-sighted money grubbers.
Now I am thinking how can we change this trend
One way is to support american manufacturing, by buying stock in the companies, and holding it long term.
If the stock is not being bought and sold as glorified gambling chips, but held for ten and twenty years, the variation in stock price becomes less of a driver in day to day decisions executives make.
Plus, you can also buy stock in "foreign" companies- thus defusing the common argument that BMW or Arcelor or other factories in the USA are "sending the money home".
If they employ US workers, buy US materials, have factories on US territory, pay US taxes, AND have US owners- you and me, for example, they are as american as apple pie.
You can buy stock in most of the foreign companies that have factories here- Toyota, Honda, many of the Russian, Indian, and German steel companies, and many more.
If you buy enough stock, you can even tell em how to run their company- thats what Warren Buffet does.
Many so called "american" companies actually have their stock owned by foreigners, making them no more "american" than a japanese company that has a lot of US stockholders.
During the period that Mercedes owned Chrysler, for example, the single largest stockholder in Mercedes was an Arab prince- making Dodge an "arab" brand as much as an american one, if all you base your decision on is ownership.
So if enough of us bought Mittal steel stock, or Honda, it could become more "american" than Ford, which undoubtedly has a LOT of chinese, russian, german, and other foreign stock ownership.
Nucor is a great company, american based and owned, which has close to 2 dozen steel mills in the USA. Buy stock in them.
Put your money where your mouth is.
Well, if you arent putting even 50 bucks a month away in an IRA, good luck when you get old.
I have never had a "real" employer- been self employed since I was about 20- so nobody but me ever saved a dime for me. And I pay my social security, and I get those letters that tell me I will get $1100 a month when I retire.
So, in addition to that, I try to save a little. And due to the tax laws, the best way to save is in a tax defered IRA, and when you put your money in an IRA, you can buy stock with it.
As I understand it, "Most" people actually have jobs, and most jobs have 401k's, or IRA's, and you can just have ten bucks or twenty deducted from your paycheck.
Most everybody I know just gets more premium channels on the sat dish instead, or buys a bigger truck with more leather, but you COULD save some money.
And if you did, you COULD buy stock in actual companies that make things.
Its kinda not the american way, of course- we have one of the lowest savings rates of any civilized country, and the largest personal debt load, and the least idea of what the money we do have in our 401K's is even invested in.
Instead, we have The Apprentice, or Lost, we have the biggest plasma screen TV's in the world, or we have 4 cars, 3 snowmobiles, a boat, and an RV in the driveway, with low monthly payments on all of em...
As Pogo says, We have met the enemy, and he is us.
My savings via a corporate retirement plan are kinda funny because that money of MINE cannot be taken by me without paying a penalty. It's funny how Wall Street gets to horse around and gamble with it with no liability when it drop 50% as it has a couple of times... but something about NOT being able to freely access MY money until I'm damn near at deaths door strikes me as a nifty backroom deal for the money crunchers.
Originally Posted by Ries
Some of us quite simply don't want to die hoarding the most money, we want to live while we can. I know, I know... quality of life is not a standard American trait but for some of us it is.
You are not forced to put money in a corporate retirement plan. You could take the same money and buy Certificates of Deposit, gold, guns, put it in a savings account, under your mattress, day trade stocks, buy mutual funds, etc., any or all of the above. You determine how quickly you can have access to your money.
Originally Posted by Peddler
I have a university professor friend who did not put her money in the NC teachers retirement system because it paid so little interest. She bought good stocks with good advice instead. She is retiring next month with a retirement fund of one half of what she would have had if she had gone with the state retirement.
I have a friend who has been day trading for about 8 years, last time I checked he has been losing about $10,000 a year. He still thinks he will figure it out.
My sister got a substantial settlement after a divorce. She went to a community college and took several courses in investing, put her money in mutual funds and did very well for about 10 years, lately she has lost 40% of her investment.
You pays your money and takes your choice.