Global Fastener News

John Wolz

MEDIA SPOTLIGHT
Editor’s Note: Articles in Media Spotlight are excerpts from publications or broadcasts that show the industry what the public is reading or hearing about fasteners and fastener companies.

Nick Lardy, a senior fellow at the Institute for International Economics, told the American Wire Producers Association that the trade situation with China is “not as bad” frequently portrayed, according to the WireLine summary of the association’s 25th annual meeting.
China’s GDP is growing at a 10% rate and the country is not as protectionist as it was in the 1980s. The average tariff is 2%, which is lower than India.
China is responsible for one-third of global steel production and has gone from being the largest steel importer in 2003 to a net exporter in 2005.
Lardy predicted China will be a “disruptive factor in steel trade worldwide, but in the long-term the steel trade situation will even out” and China is an “open market.”
The U.S. has little leverage with China’s undervalued currency, Lardy suggested. Such Congressional proposals as tariffs aren’t permitted by the WTO.
Dick D’Amato, a commissioner with the U.S./China Economic & Security Review Commission, advised U.S. companies to join with the government in demanding real changes from the Chinese government. D’Amato suggested the Chinese government’s policies are oriented toward “economic supremacy of its domestic companies” rather than “efficient, market-oriented goals,” WireLine summarized.
Patricia Mears, the director of International Commercial Affairs for the National Association of Manufacturers, finds China to be both “our greatest challenge” and “greatest opportunity.”
NAM opposes tariffs on Chinese goods entering the U.S. but wants China open to exports from the U.S., revaluation of the Chinese currency, elimination of China’s regulatory and standards barriers, and expansion of export promotions.
Beyond the export issues, NAM wants Congress to work on manufacturing issues of corporate taxes, health and pension costs, litigation, regulations and energy costs which Mears estimated can add up to 22% to U.S. manufacturing costs compared with China.
John Foster, COO of Ferrostaal Inc., predicted steel imports will continue to fluctuate but will decrease in 2007. Global steel demand rose 7.5% in 2005 and will climb 6% this year. Wire and wire product imports will continue to increase this year.
Insteel Industries CEO H. Woltz predicted rod consumption will exceed seven million tons this year for the first time since 2002. U.S. wire rod consumers will have “unprecedented import competition in finished product markets” and domestic wire rod prices are substantially higher than world market prices. Woltz predicted the U.S. market for wire rod would continue to shrink for domestic producers if prices are not competitive with global suppliers. �2006 FastenerNews.com