Download - Steel – A Year Later
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Steel A Year LaterThomas A. Danjczek, PresidentSteel Manufacturers AssociationNovember 1, 2005Concrete Reinforcing Steel Institute
Fall Business Meeting - 2005
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Steel A Year LaterSMAReview 2004 Presentation Highlights/Conclusions2005 World Steel Production/Operating Rate China Scrap, Ore, Steel, Gas Prices ConsolidationsIV.ConclusionCRSI Fall Business Meeting - 2005
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CRSI Fall Business Meeting - 2005The Steel Manufacturers Association (SMA)39 North American companies:32 U.S., 4 Canadian, and 3 Mexican103 Associate members:Suppliers of goods and services to the steel industrySMA member companiesOperate 120 Steel plants in North AmericaEmploy about 40,000 peopleMinimill Electric Arc Furnace (EAF) producersProduce nearly 100% of structural, wire rod, rebar, minimill plate and hot rolled, and a high percentage of SBQ productsAlso represent several integrated steel producers and rerollers
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CRSI Fall Business Meeting - 2005Production capabilitySMA represents over half of U.S. steel production (app. 70%)RecyclingSMA members are the largest recyclers in the U.S.Last year, the U.S. recycled over 70 million tons of ferrous scrapGrowth of SMA membersEfficiency and quality due to low costFlexible organizationsEAF growth surpassed 53% in 2004, and anticipated to be 60% by 2010
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Concrete Reinforcing Steel InstituteFall Business Meeting, 2004SMA
ChangesAugust 2003Scrap ImpactWorld Steel Production
China, China, ChinaKey StatisticsSteel ProductionSMA MissionLessons LearnedCurrency
Other Government ImpactsExchange RatesValue of the DollarScrap Imports/ExportsUS Overhead CostsTEA 21 Lunacy
Steel Production CostsKey IssuesEnergy & Raw Material CostsAsset ValuesBankruptcy/Restarts
ConclusionWashingtons Impact on SteelLAST YEAR - 2004
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Courtesy IMFSome things are the same
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Technical Read on Crude Oil PricesCourtesy JP MorganSome things are worse
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Concrete Reinforcing Steel InstituteFall Business Meeting, 2004ConclusionDont count on Washington for help! i.e. TEA 21
Uncertainty Cycle has Changed (Shorter Term & Greater Peaks & Valleys)
Revenue vs. Costs Not the Same Business Model
CHINA, CHINA, CHINA
Bankruptcy Laws Unfair to Competitors
Investments Earn Cost of Capital
Mini-Mills Must Compete in the World, as it is, and We Can!
Meaningful Optimism with Good Long Term Consumption, Relative Value, and Excellent Recyclability for Steel
LAST YEAR - 2004
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2005
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WORLD CRUDE STEEL OPERATING RATE
World Crude SteelOperating Rate %Operating rates recovered from 76 percent in 2000, to a peak of 87 percent in 2004, and have moved moderately downward since late 2004.Source: Metal Strategies
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World Raw Steel Production8 Months 2005 (000 metric tonnes)Source: IISIalthough total world steel production is increasing, Chinese production continues to increase, rest of the world production is flat, and North America production declines...
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U.S. Raw Steel Capability Utilization2000 August 27, 2005US steel makers reduced production (and capability utilization) to support inventory drawdown, and undertook maintenance in early 2005 to be prepared for stronger demand in 2H 2005
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CRSI Fall Business Meeting - 2005Chinas ImpactAfter 4 Trips in a YearKey Questions:- When will Chinese steel production significantly exceed its own domestic consumption I.e. 50/60 MMT?
- Will the Chinese government shut down inefficient, excess capacity? (Has not done so with polluting facilities despite strong policy)
- How can North American Steel Industry compete against Chinese government - - IT CANT!
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Chart1
8.27658.2765
8.27658.2765
8.27658.2765
8.27658.2765
8.11118.1111
8.08676678.1097
8.06250639998.1099
8.03831888078.1128
8.01420392418.108
7.99016131238.1056
7.96619082838.1046
7.94229225598.1032
7.91846537918.1051
7.8947099838.1027
7.8710258538.1037
7.84741277558.109
7.82387053718.107
7.80039892558.1062
7.77699772878.1002
7.75366673568.098
7.73040573538.0971
7.70721451818.1002
7.68409287468.0997
7.6610405968.1007
7.63805747428.1047
7.61514330178.1056
7.59229787188.1012
7.56952097828.1005
7.54681241538.1002
7.5241719788.0965
7.50159946218.0954
7.47909466378.0973
7.45665737978.0998
7.43428740768.0949
7.41198454548.0935
7.38974859178.0913
7.3675793468.0925
7.34547660798.0945
7.32344017818.0956
Yuan Revalued
Hypothetical Yuan per US$*
Actual Yuan per US$
Yuan per U.S. Dollar
Chart 1: U.S. Dollar Exchange Rate for the YuanDaily, July 18th, 2005 - Present
Sheet
Table 1: 2005 Foreign Exchange Rates for the Chinese Yuan
(Rates in Currency Units per Dollar)
August 15 - 19:
CountryMonetaryUnitAug. 15Aug. 16Aug. 17Aug. 18Aug. 19WeeklyAverage% Change vs.PreviousWeek Avg.
ChinaYuan8.09718.10028.09978.10078.10478.1005-0.0%
August 22 - 26:
CountryMonetaryUnitAug. 22Aug. 23Aug. 24Aug. 25Aug. 26WeeklyAverage% Change vs.PreviousWeek Avg.
ChinaYuan8.10568.10128.10058.10028.09658.10080.0%
August 29 - September 2:
CountryMonetaryUnitAug. 29Aug. 30Aug. 31Sep. 1Sep. 2WeeklyAverage% Change vs.PreviousWeek Avg.
ChinaYuan8.09548.09738.09988.09498.09358.0962-0.1%
September 5 - September 9:
CountryMonetaryUnitSep. 5*Sep. 6Sep. 7Sep. 8Sep. 9WeeklyAverage% Change vs.PreviousWeek Avg.
ChinaYuan-8.09138.09258.09458.09568.0935-0.0%
* - Holiday
Source: Federal Reserve Board, Release H.10
* Hypothetical value of the Yuan derived by assuming full 0.3% maximum daily appreciation against the US$, as announced by the People's Bank of China on July 21, 2005.
Table 2: 2005 Foreign Exchange Rates for Selected Asian Currencies
(Rates in Currency Units per Dollar)
August 15 - 19:
CountryMonetaryUnitAug. 15Aug. 16Aug. 17Aug. 18Aug. 19WeeklyAverage% Change vs.PreviousWeek Avg.
ChinaYuan8.09718.10028.09978.10078.10478.1005-0.0%
JapanYen109.4109.37109.63110.54110.68109.92-0.8%
MalaysiaRinggit3.7553.7633.7673.76853.76733.76420.4%
South KoreaWon10151016.41017.11022.11028.151019.80.6%
August 22 - 26:
CountryMonetaryUnitAug. 22Aug. 23Aug. 24Aug. 25Aug. 26WeeklyAverage% Change vs.PreviousWeek Avg.
ChinaYuan8.10568.10128.10058.10028.09658.10080.0%
JapanYen109.75109.83110.35109.9109.85109.940.0%
MalaysiaRinggit3.7663.76983.76953.76953.76953.76890.1%
South KoreaWon1021.1510281029.151026.41028.71026.70.7%
August 29 - September 2:
CountryMonetaryUnitAug. 29Aug. 30Aug. 31Sep. 1Sep. 2WeeklyAverage% Change vs.PreviousWeek Avg.
ChinaYuan8.09548.09738.09988.09498.09358.0962-0.1%
JapanYen110.53111.49110.84110.16109.66110.540.5%
MalaysiaRinggit3.76833.76983.76983.77133.7643.7686-0.0%
South KoreaWon10301039.210391030.751024.751032.70.6%
September 5 - September 9:
CountryMonetaryUnitSep. 5*Sep. 6Sep. 7Sep. 8Sep. 9WeeklyAverage% Change vs.PreviousWeek Avg.
ChinaYuan-8.09138.09258.09458.09568.0935-0.0%
JapanYen-109.67110.06110.49109.69109.98-0.5%
MalaysiaRinggit-3.76453.76453.7693.76953.7669-0.0%
South KoreaWon-1024.41026.41026.81024.31025.5-0.7%
* - Holiday
Source: Federal Reserve Board, Release H.10
&CPrepared by Georgetown Economic Services
Sheet
8.27658.2765
8.27658.2765
8.27658.2765
8.27658.2765
8.11118.1111
8.08676678.1097
8.06250639998.1099
8.03831888078.1128
8.01420392418.108
7.99016131238.1056
7.96619082838.1046
7.94229225598.1032
7.91846537918.1051
7.8947099838.1027
7.8710258538.1037
7.84741277558.109
7.82387053718.107
7.80039892558.1062
7.77699772878.1002
7.75366673568.098
7.73040573538.0971
7.70721451818.1002
7.68409287468.0997
7.6610405968.1007
7.63805747428.1047
7.61514330178.1056
7.59229787188.1012
7.56952097828.1005
7.54681241538.1002
7.5241719788.0965
7.50159946218.0954
7.47909466378.0973
7.45665737978.0998
7.43428740768.0949
7.41198454548.0935
7.38974859178.0913
7.3675793468.0925
7.34547660798.0945
7.32344017818.0956
Yuan Revalued
Hypothetical Yuan per US$*
Actual Yuan per US$
Yuan per U.S. Dollar
Chart 1: U.S. Dollar Exchange Rate for the YuanDaily, July 18th, 2005 - Present
Raw - Open as Fixed Width
100100100100
100101.1915427343100101.0653753027
100101.6126142268100101.0653753027
10098.9697186884100100.2421307506
98.001570712399.426626052799.539473684298.6440677966
97.984655349599.973123096298.960526315899.1767554479
97.9870718299100.60920981998.710526315899.7094430993
98.0221107956100.60920981998.697368421199.6610169492
97.9641152661100.645045690798.671052631699.5351089588
97.9351175014100.564414979498.697368421199.4188861985
97.9230350994100.447948396398.678947368499.2251815981
97.906119736699.695395090598.578947368498.7409200969
97.929076300499.489338828298.592105263298.401937046
97.900078535699.596846443398.592105263298.1598062954
97.9121609376100.421071492698.7598.401937046
97.9761976681100.223974198298.684210526398.401937046
97.9520328641100.403153556798.644736842198.2082324455
97.942366942599.148898046998.697.9757869249
97.869872530798.476975452498.623684210598.1210653753
97.843291246398.145493639198.623684210598.2179176755
97.832417084598.011109120298.815789473798.3050847458
97.869872530797.984232216499.026315789598.4406779661
97.863831329798.217165382599.131578947498.5084745763
97.875913731699.032431463999.171052631698.9927360775
97.924243339699.157857014999.139473684299.5786924939
97.935117501498.324672997799.105263157998.9007263923
97.881954932698.396344741199.205263157999.5641646489
97.873497251398.862211073399.197368421199.6755447942
97.869872530798.459057516699.197368421199.4092009685
97.825167643398.414262676999.197368421199.6319612591
97.811877001199.02347249699.165789473799.7578692494
97.834833564999.88353341799.2052631579100.6489104116
97.865039569999.301200501799.2052631579100.6295399516
97.805835800298.691990682799.244736842199.8305084746
97.788920437498.244042286399.052631578999.2493946731
97.76233915398.253001254399.065789473799.215496368
97.776838035498.602401003499.065789473799.4092009685
97.801002839498.987636624399.184210526399.4479418886
97.814293481598.270919190199.197368421199.205811138
Yuan Revalued
China
Japan
Malaysia
South Korea
7/18/2005 = 100
Chart 2: U.S. Dollar Exchange Rates for Various Asian CurrenciesDaily, July 18th, 2005 - Present
MONETARY
COUNTRYUNITJul. 18Jul. 19Jul. 20Jul. 21Jul. 22Jul. 25Jul. 26Jul. 27Jul. 28Jul. 29Aug. 1Aug. 2Aug. 3Aug. 4Aug. 5Aug. 8Aug. 9Aug. 10Aug. 11Aug. 12Aug. 15Aug. 16Aug. 17Aug. 18Aug. 19Aug. 22Aug. 23Aug. 24Aug. 25Aug. 26Aug. 29Aug. 30Aug. 31Sep. 1Sep. 2Sep. 6Sep. 7Sep. 8Sep. 9
*AUSTRALIADOLLAR0.75410.74920.7540.7630.76610.76330.75850.75560.75710.75940.76180.76490.77180.77390.76710.76520.76010.7640.77370.77230.76830.76880.76230.75370.75050.75480.75510.75520.760.75840.75220.74690.75140.76090.76490.76680.76840.77120.7731
BRAZILREAL2.32652.3422.35752.352.37732.4192.43652.4432.4142.38552.3772.34972.3092.29652.30052.30952.3122.27452.33052.37352.3422.3452.3512.3692.452.39712.4022.42052.41862.422.41062.38842.3542.36452.34052.32812.32852.31532.3209
CANADADOLLAR1.21541.21861.22181.21771.2181.21941.22911.23411.23451.22571.21361.21221.21281.21191.21851.21321.2141.21131.20251.19461.19681.1981.2071.21781.21521.2041.19811.19561.18881.19491.19651.19191.18931.18551.1881.18671.18551.18221.1749
CHINA, P.R.YUAN8.27658.27658.27658.27658.11118.10978.10998.11288.1088.10568.10468.10328.10518.10278.10378.1098.1078.10628.10028.0988.09718.10028.09978.10078.10478.10568.10128.10058.10028.09658.09548.09738.09988.09498.09358.09138.09258.09458.0956
DENMARKKRONE6.17526.21476.19246.16316.17566.18856.21266.19316.15426.14966.11596.10996.04766.02536.05296.03416.04326.04295.99966.0026.03466.04486.06836.12296.13726.09316.10576.09266.05696.05126.09066.11096.04835.99185.94625.97275.99436.01125.9941
*EMU MEMBERSEURO1.20771.20011.20461.21131.20791.20541.20071.20481.21211.21291.21951.22091.23371.23831.23271.23611.23471.23451.24341.24281.23621.23421.2291.21781.21471.22351.22131.22391.23111.23241.22481.22041.2331.24471.25381.24831.24391.241.2433
HONG KONGDOLLAR7.7767.7777.77777.76857.77337.77327.77647.77737.77437.77447.77227.77227.77127.77297.77117.77097.77137.76937.76877.76917.76847.77147.77137.76927.77117.7717.77347.77337.77097.76887.76917.7717.77187.76937.7677.76737.76717.76597.7645
INDIARUPEE43.4743.4843.4643.0543.443.4543.4143.3443.3243.443.3743.4143.3643.4343.4243.4443.4643.5443.543.4843.4543.4543.4643.543.5143.5843.5743.6943.643.643.8643.974443.9443.8743.8243.7943.7843.76
JAPANYEN111.62112.95113.42110.47110.98111.59112.3112.3112.34112.25112.12111.28111.05111.17112.09111.87112.07110.67109.92109.55109.4109.37109.63110.54110.68109.75109.83110.35109.9109.85110.53111.49110.84110.16109.66109.67110.06110.49109.69
MALAYSIARINGGIT3.83.83.83.83.78253.76053.7513.75053.74953.75053.74983.7463.74653.74653.75253.753.74853.74683.74773.74773.7553.7633.7673.76853.76733.7663.76983.76953.76953.76953.76833.76983.76983.77133.7643.76453.76453.7693.7695
MEXICOPESO10.58610.6210.65710.59110.63110.67110.69610.63810.61610.610.59810.59810.59510.57810.59610.60510.63810.59210.58510.63510.59710.57510.60810.65210.75810.72810.77710.88210.80610.85810.89510.83710.79410.72810.6810.69110.71810.71110.705
*NEW ZEALANDDOLLAR0.67850.6740.67430.68450.6870.68380.68290.68050.6830.68340.68460.68780.69150.69240.68950.69320.69150.69410.70520.70770.7050.7040.70290.69540.69310.69690.69730.69780.69720.69720.69360.68790.69320.70230.70540.70720.70570.70530.707
NORWAYKRONE6.61296.67386.61586.57066.58316.5636.58166.57426.52556.47856.43226.42776.35966.34776.4136.4046.40436.39156.33696.35686.43356.4436.44276.52396.57316.51946.5316.50456.446.43976.46466.48246.37256.2896.21256.26526.26156.28896.2674
SINGAPOREDOLLAR1.68481.6911.6891.65351.65841.66181.66821.66421.66511.6611.66021.65451.65111.6521.65421.65321.65381.64621.64791.6511.661.65621.65751.66541.67121.66721.6681.66971.67081.67321.68061.6861.6831.67711.67471.67581.67811.67781.6738
SOUTH AFRICARAND6.6656.7156.67556.5836.6356.64156.6916.63856.60856.566.52256.5256.4416.44886.4556.456.47256.4026.34356.356.4256.4276.46256.536.55256.486.56.4866.46256.4556.45756.52856.46.31256.2556.3256.3456.32756.295
SOUTH KOREAWON1032.51043.51043.510351018.510241029.510291027.71026.51024.51019.510161013.51016101610141011.61013.11014.110151016.41017.11022.11028.151021.1510281029.151026.41028.710301039.210391030.751024.751024.41026.41026.81024.3
SRI LANKARUPEE100.31100.2100.4100.33100.35100.62100.73100.68100.62100.67100.36100.45100.51100.55100.4100.66100.47100.64100.77100.79100.85100.86100.9100.87100.7100.83100.71100.8100.7100.8100.94101.22101.2101.22101.35101.3101.28101.42101.51
SWEDENKRONA7.78297.84377.84617.8077.81877.8037.86187.83717.75267.76147.70587.67487.60737.53547.57167.5577.5677.56377.47627.48797.51657.54857.59357.65487.71217.65027.64757.62517.58067.57577.62417.65127.55997.48697.39367.4487.48597.51637.4954
SWITZERLANDFRANC1.29161.30351.29711.28871.29511.29651.30071.29861.2881.2871.2781.27531.26161.25841.26631.26071.26181.26081.24871.2491.25531.25731.25981.27051.27561.26921.27221.26841.25561.25411.26421.27031.25461.241.22871.23661.23991.24421.2413
TAIWANDOLLAR31.873231.8931.9431.6131.7231.9431.9131.8531.9231.931.8231.8431.8531.7731.8131.9631.8831.931.8831.9531.9832.0532.1932.1532.132.1632.2332.2532.232.4432.7232.7132.7132.5232.5432.632.7432.7
THAILANDBAHT41.7241.9542.1241.3241.3641.3441.5941.6441.7841.6541.5541.2741.2141.1241.1641.1541.1440.8640.8240.8640.9741.1341.2541.3241.244140.9541.141.064141.2641.3641.2541.0541.0941.1241.0240.9640.95
*UNITED KINGDOMPOUND1.75231.73641.73031.74711.74131.74551.74151.74381.75471.75931.76951.77281.78081.77971.77481.78631.78441.79221.80711.81481.80881.80961.80761.79491.79331.80221.79961.79651.80451.80661.80061.7841.80121.82791.84031.8421.83941.83881.84
VENEZUELABOLIVAR2144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.6
GRAPH 1
Hypothetical Yuan per US$*8.27658.27658.27658.27658.11118.08676678.06250639998.03831888078.01420392417.99016131237.96619082837.94229225597.91846537917.8947099837.8710258537.84741277557.82387053717.80039892557.77699772877.75366673567.73040573537.70721451817.68409287467.6610405967.63805747427.61514330177.59229787187.56952097827.54681241537.5241719787.50159946217.47909466377.45665737977.43428740767.41198454547.38974859177.3675793467.34547660797.3234401781
Actual Yuan per US$
GRAPH 2
China10010010010098.001570712397.984655349597.987071829998.022110795697.964115266197.935117501497.923035099497.906119736697.929076300497.900078535697.912160937697.976197668197.952032864197.942366942597.869872530797.843291246397.832417084597.869872530797.863831329797.875913731697.924243339697.935117501497.881954932697.873497251397.869872530797.825167643397.811877001197.834833564997.865039569997.805835800297.788920437497.76233915397.776838035497.801002839497.8142934815
Japan100101.1915427343101.612614226898.969718688499.426626052799.9731230962100.609209819100.609209819100.6450456907100.5644149794100.447948396399.695395090599.489338828299.5968464433100.4210714926100.2239741982100.403153556799.148898046998.476975452498.145493639198.011109120297.984232216498.217165382599.032431463999.157857014998.324672997798.396344741198.862211073398.459057516698.414262676999.02347249699.88353341799.301200501798.691990682798.244042286398.253001254398.602401003498.987636624398.2709191901
Malaysia10010010010099.539473684298.960526315898.710526315898.697368421198.671052631698.697368421198.678947368498.578947368498.592105263298.592105263298.7598.684210526398.644736842198.698.623684210598.623684210598.815789473799.026315789599.131578947499.171052631699.139473684299.105263157999.205263157999.197368421199.197368421199.197368421199.165789473799.205263157999.205263157999.244736842199.052631578999.065789473799.065789473799.184210526399.1973684211
Singapore100100.3679962013100.249287749398.142212725598.43304843398.634852801599.014719848198.77730294498.830721747498.587369420798.539886039998.201566951697.999762583198.053181386598.183760683898.124406457798.160018993497.708926875697.809829059897.993827160598.528015194798.302469135898.379629629698.848528015299.192782526198.95536562299.002849002899.103751187199.169040835799.311490978299.7507122507100.071225071299.893162393299.542972459699.400522317299.465811965899.602326685799.584520417999.3471035138
South Korea100101.0653753027101.0653753027100.242130750698.644067796699.176755447999.709443099399.661016949299.535108958899.418886198599.225181598198.740920096998.40193704698.159806295498.40193704698.40193704698.208232445597.975786924998.121065375398.217917675598.305084745898.440677966198.508474576398.992736077599.578692493998.900726392399.564164648999.675544794299.409200968599.631961259199.7578692494100.6489104116100.629539951699.830508474699.249394673199.21549636899.409200968599.447941888699.205811138
-
Chart2
100100100100
100101.1915427343100101.0653753027
100101.6126142268100101.0653753027
10098.9697186884100100.2421307506
98.001570712399.426626052799.539473684298.6440677966
97.984655349599.973123096298.960526315899.1767554479
97.9870718299100.60920981998.710526315899.7094430993
98.0221107956100.60920981998.697368421199.6610169492
97.9641152661100.645045690798.671052631699.5351089588
97.9351175014100.564414979498.697368421199.4188861985
97.9230350994100.447948396398.678947368499.2251815981
97.906119736699.695395090598.578947368498.7409200969
97.929076300499.489338828298.592105263298.401937046
97.900078535699.596846443398.592105263298.1598062954
97.9121609376100.421071492698.7598.401937046
97.9761976681100.223974198298.684210526398.401937046
97.9520328641100.403153556798.644736842198.2082324455
97.942366942599.148898046998.697.9757869249
97.869872530798.476975452498.623684210598.1210653753
97.843291246398.145493639198.623684210598.2179176755
97.832417084598.011109120298.815789473798.3050847458
97.869872530797.984232216499.026315789598.4406779661
97.863831329798.217165382599.131578947498.5084745763
97.875913731699.032431463999.171052631698.9927360775
97.924243339699.157857014999.139473684299.5786924939
97.935117501498.324672997799.105263157998.9007263923
97.881954932698.396344741199.205263157999.5641646489
97.873497251398.862211073399.197368421199.6755447942
97.869872530798.459057516699.197368421199.4092009685
97.825167643398.414262676999.197368421199.6319612591
97.811877001199.02347249699.165789473799.7578692494
97.834833564999.88353341799.2052631579100.6489104116
97.865039569999.301200501799.2052631579100.6295399516
97.805835800298.691990682799.244736842199.8305084746
97.788920437498.244042286399.052631578999.2493946731
97.76233915398.253001254399.065789473799.215496368
97.776838035498.602401003499.065789473799.4092009685
97.801002839498.987636624399.184210526399.4479418886
97.814293481598.270919190199.197368421199.205811138
Yuan Revalued
China
Japan
Malaysia
South Korea
7/18/2005 = 100
Chart 2: U.S. Dollar Exchange Rates for Various Asian CurrenciesDaily, July 18th, 2005 - Present
Sheet
Table 1: 2005 Foreign Exchange Rates for the Chinese Yuan
(Rates in Currency Units per Dollar)
August 15 - 19:
CountryMonetaryUnitAug. 15Aug. 16Aug. 17Aug. 18Aug. 19WeeklyAverage% Change vs.PreviousWeek Avg.
ChinaYuan8.09718.10028.09978.10078.10478.1005-0.0%
August 22 - 26:
CountryMonetaryUnitAug. 22Aug. 23Aug. 24Aug. 25Aug. 26WeeklyAverage% Change vs.PreviousWeek Avg.
ChinaYuan8.10568.10128.10058.10028.09658.10080.0%
August 29 - September 2:
CountryMonetaryUnitAug. 29Aug. 30Aug. 31Sep. 1Sep. 2WeeklyAverage% Change vs.PreviousWeek Avg.
ChinaYuan8.09548.09738.09988.09498.09358.0962-0.1%
September 5 - September 9:
CountryMonetaryUnitSep. 5*Sep. 6Sep. 7Sep. 8Sep. 9WeeklyAverage% Change vs.PreviousWeek Avg.
ChinaYuan-8.09138.09258.09458.09568.0935-0.0%
* - Holiday
Source: Federal Reserve Board, Release H.10
* Hypothetical value of the Yuan derived by assuming full 0.3% maximum daily appreciation against the US$, as announced by the People's Bank of China on July 21, 2005.
Table 2: 2005 Foreign Exchange Rates for Selected Asian Currencies
(Rates in Currency Units per Dollar)
August 15 - 19:
CountryMonetaryUnitAug. 15Aug. 16Aug. 17Aug. 18Aug. 19WeeklyAverage% Change vs.PreviousWeek Avg.
ChinaYuan8.09718.10028.09978.10078.10478.1005-0.0%
JapanYen109.4109.37109.63110.54110.68109.92-0.8%
MalaysiaRinggit3.7553.7633.7673.76853.76733.76420.4%
South KoreaWon10151016.41017.11022.11028.151019.80.6%
August 22 - 26:
CountryMonetaryUnitAug. 22Aug. 23Aug. 24Aug. 25Aug. 26WeeklyAverage% Change vs.PreviousWeek Avg.
ChinaYuan8.10568.10128.10058.10028.09658.10080.0%
JapanYen109.75109.83110.35109.9109.85109.940.0%
MalaysiaRinggit3.7663.76983.76953.76953.76953.76890.1%
South KoreaWon1021.1510281029.151026.41028.71026.70.7%
August 29 - September 2:
CountryMonetaryUnitAug. 29Aug. 30Aug. 31Sep. 1Sep. 2WeeklyAverage% Change vs.PreviousWeek Avg.
ChinaYuan8.09548.09738.09988.09498.09358.0962-0.1%
JapanYen110.53111.49110.84110.16109.66110.540.5%
MalaysiaRinggit3.76833.76983.76983.77133.7643.7686-0.0%
South KoreaWon10301039.210391030.751024.751032.70.6%
September 5 - September 9:
CountryMonetaryUnitSep. 5*Sep. 6Sep. 7Sep. 8Sep. 9WeeklyAverage% Change vs.PreviousWeek Avg.
ChinaYuan-8.09138.09258.09458.09568.0935-0.0%
JapanYen-109.67110.06110.49109.69109.98-0.5%
MalaysiaRinggit-3.76453.76453.7693.76953.7669-0.0%
South KoreaWon-1024.41026.41026.81024.31025.5-0.7%
* - Holiday
Source: Federal Reserve Board, Release H.10
&CPrepared by Georgetown Economic Services
Sheet
8.27658.2765
8.27658.2765
8.27658.2765
8.27658.2765
8.11118.1111
8.08676678.1097
8.06250639998.1099
8.03831888078.1128
8.01420392418.108
7.99016131238.1056
7.96619082838.1046
7.94229225598.1032
7.91846537918.1051
7.8947099838.1027
7.8710258538.1037
7.84741277558.109
7.82387053718.107
7.80039892558.1062
7.77699772878.1002
7.75366673568.098
7.73040573538.0971
7.70721451818.1002
7.68409287468.0997
7.6610405968.1007
7.63805747428.1047
7.61514330178.1056
7.59229787188.1012
7.56952097828.1005
7.54681241538.1002
7.5241719788.0965
7.50159946218.0954
7.47909466378.0973
7.45665737978.0998
7.43428740768.0949
7.41198454548.0935
7.38974859178.0913
7.3675793468.0925
7.34547660798.0945
7.32344017818.0956
Yuan Revalued
Hypothetical Yuan per US$*
Actual Yuan per US$
Yuan per U.S. Dollar
Chart 1: U.S. Dollar Exchange Rate for the YuanDaily, July 18th, 2005 - Present
Raw - Open as Fixed Width
100100100100
100101.1915427343100101.0653753027
100101.6126142268100101.0653753027
10098.9697186884100100.2421307506
98.001570712399.426626052799.539473684298.6440677966
97.984655349599.973123096298.960526315899.1767554479
97.9870718299100.60920981998.710526315899.7094430993
98.0221107956100.60920981998.697368421199.6610169492
97.9641152661100.645045690798.671052631699.5351089588
97.9351175014100.564414979498.697368421199.4188861985
97.9230350994100.447948396398.678947368499.2251815981
97.906119736699.695395090598.578947368498.7409200969
97.929076300499.489338828298.592105263298.401937046
97.900078535699.596846443398.592105263298.1598062954
97.9121609376100.421071492698.7598.401937046
97.9761976681100.223974198298.684210526398.401937046
97.9520328641100.403153556798.644736842198.2082324455
97.942366942599.148898046998.697.9757869249
97.869872530798.476975452498.623684210598.1210653753
97.843291246398.145493639198.623684210598.2179176755
97.832417084598.011109120298.815789473798.3050847458
97.869872530797.984232216499.026315789598.4406779661
97.863831329798.217165382599.131578947498.5084745763
97.875913731699.032431463999.171052631698.9927360775
97.924243339699.157857014999.139473684299.5786924939
97.935117501498.324672997799.105263157998.9007263923
97.881954932698.396344741199.205263157999.5641646489
97.873497251398.862211073399.197368421199.6755447942
97.869872530798.459057516699.197368421199.4092009685
97.825167643398.414262676999.197368421199.6319612591
97.811877001199.02347249699.165789473799.7578692494
97.834833564999.88353341799.2052631579100.6489104116
97.865039569999.301200501799.2052631579100.6295399516
97.805835800298.691990682799.244736842199.8305084746
97.788920437498.244042286399.052631578999.2493946731
97.76233915398.253001254399.065789473799.215496368
97.776838035498.602401003499.065789473799.4092009685
97.801002839498.987636624399.184210526399.4479418886
97.814293481598.270919190199.197368421199.205811138
Yuan Revalued
China
Japan
Malaysia
South Korea
7/18/2005 = 100
Chart 2: U.S. Dollar Exchange Rates for Various Asian CurrenciesDaily, July 18th, 2005 - Present
MONETARY
COUNTRYUNITJul. 18Jul. 19Jul. 20Jul. 21Jul. 22Jul. 25Jul. 26Jul. 27Jul. 28Jul. 29Aug. 1Aug. 2Aug. 3Aug. 4Aug. 5Aug. 8Aug. 9Aug. 10Aug. 11Aug. 12Aug. 15Aug. 16Aug. 17Aug. 18Aug. 19Aug. 22Aug. 23Aug. 24Aug. 25Aug. 26Aug. 29Aug. 30Aug. 31Sep. 1Sep. 2Sep. 6Sep. 7Sep. 8Sep. 9
*AUSTRALIADOLLAR0.75410.74920.7540.7630.76610.76330.75850.75560.75710.75940.76180.76490.77180.77390.76710.76520.76010.7640.77370.77230.76830.76880.76230.75370.75050.75480.75510.75520.760.75840.75220.74690.75140.76090.76490.76680.76840.77120.7731
BRAZILREAL2.32652.3422.35752.352.37732.4192.43652.4432.4142.38552.3772.34972.3092.29652.30052.30952.3122.27452.33052.37352.3422.3452.3512.3692.452.39712.4022.42052.41862.422.41062.38842.3542.36452.34052.32812.32852.31532.3209
CANADADOLLAR1.21541.21861.22181.21771.2181.21941.22911.23411.23451.22571.21361.21221.21281.21191.21851.21321.2141.21131.20251.19461.19681.1981.2071.21781.21521.2041.19811.19561.18881.19491.19651.19191.18931.18551.1881.18671.18551.18221.1749
CHINA, P.R.YUAN8.27658.27658.27658.27658.11118.10978.10998.11288.1088.10568.10468.10328.10518.10278.10378.1098.1078.10628.10028.0988.09718.10028.09978.10078.10478.10568.10128.10058.10028.09658.09548.09738.09988.09498.09358.09138.09258.09458.0956
DENMARKKRONE6.17526.21476.19246.16316.17566.18856.21266.19316.15426.14966.11596.10996.04766.02536.05296.03416.04326.04295.99966.0026.03466.04486.06836.12296.13726.09316.10576.09266.05696.05126.09066.11096.04835.99185.94625.97275.99436.01125.9941
*EMU MEMBERSEURO1.20771.20011.20461.21131.20791.20541.20071.20481.21211.21291.21951.22091.23371.23831.23271.23611.23471.23451.24341.24281.23621.23421.2291.21781.21471.22351.22131.22391.23111.23241.22481.22041.2331.24471.25381.24831.24391.241.2433
HONG KONGDOLLAR7.7767.7777.77777.76857.77337.77327.77647.77737.77437.77447.77227.77227.77127.77297.77117.77097.77137.76937.76877.76917.76847.77147.77137.76927.77117.7717.77347.77337.77097.76887.76917.7717.77187.76937.7677.76737.76717.76597.7645
INDIARUPEE43.4743.4843.4643.0543.443.4543.4143.3443.3243.443.3743.4143.3643.4343.4243.4443.4643.5443.543.4843.4543.4543.4643.543.5143.5843.5743.6943.643.643.8643.974443.9443.8743.8243.7943.7843.76
JAPANYEN111.62112.95113.42110.47110.98111.59112.3112.3112.34112.25112.12111.28111.05111.17112.09111.87112.07110.67109.92109.55109.4109.37109.63110.54110.68109.75109.83110.35109.9109.85110.53111.49110.84110.16109.66109.67110.06110.49109.69
MALAYSIARINGGIT3.83.83.83.83.78253.76053.7513.75053.74953.75053.74983.7463.74653.74653.75253.753.74853.74683.74773.74773.7553.7633.7673.76853.76733.7663.76983.76953.76953.76953.76833.76983.76983.77133.7643.76453.76453.7693.7695
MEXICOPESO10.58610.6210.65710.59110.63110.67110.69610.63810.61610.610.59810.59810.59510.57810.59610.60510.63810.59210.58510.63510.59710.57510.60810.65210.75810.72810.77710.88210.80610.85810.89510.83710.79410.72810.6810.69110.71810.71110.705
*NEW ZEALANDDOLLAR0.67850.6740.67430.68450.6870.68380.68290.68050.6830.68340.68460.68780.69150.69240.68950.69320.69150.69410.70520.70770.7050.7040.70290.69540.69310.69690.69730.69780.69720.69720.69360.68790.69320.70230.70540.70720.70570.70530.707
NORWAYKRONE6.61296.67386.61586.57066.58316.5636.58166.57426.52556.47856.43226.42776.35966.34776.4136.4046.40436.39156.33696.35686.43356.4436.44276.52396.57316.51946.5316.50456.446.43976.46466.48246.37256.2896.21256.26526.26156.28896.2674
SINGAPOREDOLLAR1.68481.6911.6891.65351.65841.66181.66821.66421.66511.6611.66021.65451.65111.6521.65421.65321.65381.64621.64791.6511.661.65621.65751.66541.67121.66721.6681.66971.67081.67321.68061.6861.6831.67711.67471.67581.67811.67781.6738
SOUTH AFRICARAND6.6656.7156.67556.5836.6356.64156.6916.63856.60856.566.52256.5256.4416.44886.4556.456.47256.4026.34356.356.4256.4276.46256.536.55256.486.56.4866.46256.4556.45756.52856.46.31256.2556.3256.3456.32756.295
SOUTH KOREAWON1032.51043.51043.510351018.510241029.510291027.71026.51024.51019.510161013.51016101610141011.61013.11014.110151016.41017.11022.11028.151021.1510281029.151026.41028.710301039.210391030.751024.751024.41026.41026.81024.3
SRI LANKARUPEE100.31100.2100.4100.33100.35100.62100.73100.68100.62100.67100.36100.45100.51100.55100.4100.66100.47100.64100.77100.79100.85100.86100.9100.87100.7100.83100.71100.8100.7100.8100.94101.22101.2101.22101.35101.3101.28101.42101.51
SWEDENKRONA7.78297.84377.84617.8077.81877.8037.86187.83717.75267.76147.70587.67487.60737.53547.57167.5577.5677.56377.47627.48797.51657.54857.59357.65487.71217.65027.64757.62517.58067.57577.62417.65127.55997.48697.39367.4487.48597.51637.4954
SWITZERLANDFRANC1.29161.30351.29711.28871.29511.29651.30071.29861.2881.2871.2781.27531.26161.25841.26631.26071.26181.26081.24871.2491.25531.25731.25981.27051.27561.26921.27221.26841.25561.25411.26421.27031.25461.241.22871.23661.23991.24421.2413
TAIWANDOLLAR31.873231.8931.9431.6131.7231.9431.9131.8531.9231.931.8231.8431.8531.7731.8131.9631.8831.931.8831.9531.9832.0532.1932.1532.132.1632.2332.2532.232.4432.7232.7132.7132.5232.5432.632.7432.7
THAILANDBAHT41.7241.9542.1241.3241.3641.3441.5941.6441.7841.6541.5541.2741.2141.1241.1641.1541.1440.8640.8240.8640.9741.1341.2541.3241.244140.9541.141.064141.2641.3641.2541.0541.0941.1241.0240.9640.95
*UNITED KINGDOMPOUND1.75231.73641.73031.74711.74131.74551.74151.74381.75471.75931.76951.77281.78081.77971.77481.78631.78441.79221.80711.81481.80881.80961.80761.79491.79331.80221.79961.79651.80451.80661.80061.7841.80121.82791.84031.8421.83941.83881.84
VENEZUELABOLIVAR2144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.62144.6
GRAPH 1
Hypothetical Yuan per US$*8.27658.27658.27658.27658.11118.08676678.06250639998.03831888078.01420392417.99016131237.96619082837.94229225597.91846537917.8947099837.8710258537.84741277557.82387053717.80039892557.77699772877.75366673567.73040573537.70721451817.68409287467.6610405967.63805747427.61514330177.59229787187.56952097827.54681241537.5241719787.50159946217.47909466377.45665737977.43428740767.41198454547.38974859177.3675793467.34547660797.3234401781
Actual Yuan per US$
GRAPH 2
China10010010010098.001570712397.984655349597.987071829998.022110795697.964115266197.935117501497.923035099497.906119736697.929076300497.900078535697.912160937697.976197668197.952032864197.942366942597.869872530797.843291246397.832417084597.869872530797.863831329797.875913731697.924243339697.935117501497.881954932697.873497251397.869872530797.825167643397.811877001197.834833564997.865039569997.805835800297.788920437497.76233915397.776838035497.801002839497.8142934815
Japan100101.1915427343101.612614226898.969718688499.426626052799.9731230962100.609209819100.609209819100.6450456907100.5644149794100.447948396399.695395090599.489338828299.5968464433100.4210714926100.2239741982100.403153556799.148898046998.476975452498.145493639198.011109120297.984232216498.217165382599.032431463999.157857014998.324672997798.396344741198.862211073398.459057516698.414262676999.02347249699.88353341799.301200501798.691990682798.244042286398.253001254398.602401003498.987636624398.2709191901
Malaysia10010010010099.539473684298.960526315898.710526315898.697368421198.671052631698.697368421198.678947368498.578947368498.592105263298.592105263298.7598.684210526398.644736842198.698.623684210598.623684210598.815789473799.026315789599.131578947499.171052631699.139473684299.105263157999.205263157999.197368421199.197368421199.197368421199.165789473799.205263157999.205263157999.244736842199.052631578999.065789473799.065789473799.184210526399.1973684211
Singapore100100.3679962013100.249287749398.142212725598.43304843398.634852801599.014719848198.77730294498.830721747498.587369420798.539886039998.201566951697.999762583198.053181386598.183760683898.124406457798.160018993497.708926875697.809829059897.993827160598.528015194798.302469135898.379629629698.848528015299.192782526198.95536562299.002849002899.103751187199.169040835799.311490978299.7507122507100.071225071299.893162393299.542972459699.400522317299.465811965899.602326685799.584520417999.3471035138
South Korea100101.0653753027101.0653753027100.242130750698.644067796699.176755447999.709443099399.661016949299.535108958899.418886198599.225181598198.740920096998.40193704698.159806295498.40193704698.40193704698.208232445597.975786924998.121065375398.217917675598.305084745898.440677966198.508474576398.992736077599.578692493998.900726392399.564164648999.675544794299.409200968599.631961259199.7578692494100.6489104116100.629539951699.830508474699.249394673199.21549636899.409200968599.447941888699.205811138
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Chinas Steel Trade Balance
Year200420052006Imports33.127.022.0Exports20.232.536.0(Semis)6.29.05.0
Steel Trade Balance-12.9+5.5+14
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CONCERNSSteel ItemCommentNorth American steel industry CANNOTCurrency, banks, land, environment,compete against Chinese steel companiesconsolidations, policiesfinanced and controlled by theirgovernment In 2005, compared to 2004, China steelTrend worsens in 2006 with newimports are projected to drop by 6.1capacity on line, and Chinasmillion tons, while exports are projectedslowdownto increase by 12.3 million tons North American steel industry loss of aGovernment de facto subsidiessignificant increment of its customer(industrial parks, infrastructure,base to relocation to Chinesefactory space, loans)production sites
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CHALLENGES
Area Comment EnvironmentTrade policy and laws are not enforced regardingemissions and effluents; Province versusBeijing; employment rules, not environment ConsolidationsState-owned facilities; only non-controlling foreignownership allowed; antiquated facilities; policy is20 large producers, push small producers out Technology/QualityQuality in flat rolled will affect export capabilities.Switch from long to flat not easy InventoriesRun full out. Not always market-oriented CapitalWill not always be free; could lose state credit PersonnelSome unrest expressed toward elite class.Internet is politically uncontrollable
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Chinese steel industry expansion continues in a region that is deficient in resources (supply and quality) and environmental compliance
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The National Association of Manufacturers (NAM) recently reviewed Chinas compliance with its WTO commitments in the accession protocol. While progress has been made in certain areas, there are serious concerns and problems with effective compliance relating to:1. Huge U.S. trade imbalance2. Continued currency manipulation3. Arbitrary VAT taxes and rebates4. Massive counterfeiting and piracy5. Discriminatory standards6. Inadequate regulatory transparency
COMPLIANCE WITH THE WTO
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Steel Making Raw Material PricesPrices of key steel making cost inputs have more than doubled in 2004 and 2005. The outlook for 2006 is for continuing cost pressures...
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9/26/05
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Source: Iron and Steel Statistics Bureau
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Rebar Prices, 1990-2005(Midwest, $ per ton)Source: Purchasing MagazineJune 2005 = $470July 2005 = $450Aug. 2005 = $435Sept. 2005 = $485
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Wire Rod Prices, 1990-2005(Midwest, $ per ton)Source: Purchasing MagazineJune 2005 = $505July 2005 = $472Aug. 2005 = $469Sept. 2005 = $523
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Wide-Flange Beam Prices, 1990-2005(Midwest, 8 x 8, $ per ton)Source: Purchasing MagazineJune 2005 = $516July 2005 = $506Aug. 2005 = $496Sept. 2005 = $545
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Global Price Spreads Versus N.A. Spot Price Hot Rolled Sheetthe U.S. market had become less attractive to offshore steel with lower prices and lower spreads versus the rest of the world in 2005. However, price rebounds and increases in overcapacity may encourage imports to returnIncentives for imports to increase Incentive for import to fall
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U.S. Oil and Natural Gas Pricesoil prices are the major uncertainty in the outlook for 2006, with forecasts ranging from thirty-five to seventy-five US$ per bbl
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Natural Gas Cost Impactsharp gains in natural gas prices have more than doubled steel mill gas costs per ton since 2000. Costs for integrated mills have risen over $30 per ton
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U.S. STEEL INDUSTRY CONSOLIDATION(Percent Change, 2000 compared to 2005)Mittal Steel weighted average share of all markets served = ~33% (major product range-15-40%+)
FRP acquisition price ($/ton, going-concern basis) 2002= $110..2003-04=$1702005=$225Source: Metal Strategies
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CRSI Fall Business Meeting - 2005
Conclusions Hell, its still a cyclical business Fundamental shift in both demand and supply due to China and its appetite for raw materials China is still the wild card Consolidations and discipline have had an impact to reduce volatility Role of inventories affecting pricing and production Demand still healthy, construction solid Unknowns (Oil, interest rates, auto sector, energy, freight rates, federal spending, China, China, China) Still reasons for meaningful optimism