20
China steel makers
Powers Fasteners
to hike Q1 prices manslaughter charge
China's major steel mills are raising steel prices as
much as 350 Yuan per metric ton. At least five
dropped
major mills reportedly will raise prices starting in
Powers Fasteners agreed to pay US$16 million in exchange for one count of
February 2009.
manslaughter being dropped against the company. Powers Fasteners was charged
The increase is about 10% above the current price,
in relation to the death of a woman in Boston's Big Dig tunnel.
translating to a 5% to 6% increase in fastener prices
In addition to the financial settlement, Powers reportedly agreed to recall its
from China, XL Screw purchasing director, Jikyoon
"fast-set" epoxy used in the tunnel that collapsed, as well as notify customers that the
Park, told FIN.
epoxy failed certain tests and is not recommended for sustained loads.
Steel prices in China have fallen to a level close to
New York-based Powers Fasteners was charged in 2007 with manslaughter in the
or below break-even point for steel producers, Park
explained. "China's steel prices have experienced the
death of Milena Del Valle, who was crushed when the tunnel collapsed. Powers
most violent price fluctuations this year with sharp
Fasteners, which manufactured the epoxy blamed for the tunnel collapse, reached a
and continuous increase in the first half, followed by
US$6 million settlement with the woman's family.
a sharp decline in the second half,” Park stated.
Company president Jeffrey Powers applauded the deal. "Today our company accepts
Chinese mills have already cut production output
its share of responsibility as one of many businesses involved in the construction of the
by 20% to 30%, with some factories shutting down
tunnel," Powers told
FastenerNews.com.
production completely. Despite this, China's steel mills
He noted that Powers Fasteners is a "very small company" with just 240 employees.
continue facing pressure to consolidate operations in
"The indictment alone has put enormous stress on our business and our people in an
order to reduce surplus capacity in China. Likewise,
economic environment posing its own special challenges. We are very happy to bring to
dealers have reduced inventory "significantly” and
a close this difficult chapter for all concerned."
remain unwilling to carry extra inventory after severe
Powers officials insisted they told Big Dig officials that their 'fast-set' epoxy was to be
losses over the past three months. "They had to sell used only to secure wall panels, not heavy overhead concrete ceiling panels.
at a loss for those high-cost inventories purchased Big Dig contractor Modern Continental Corp. faces 49 federal criminal charges for
earlier due to the steep decline in steel prices,” Park allegedly hiding shoddy workmanship.
told FIN. A National Transportation Safety Board report that spread broad blame for the ceiling
Overall steel prices in China have been "very collapse, concluding that designers and construction crews had not considered that the
stable” during the past six to seven weeks, with a
epoxy holding 5/8 inch diameter threaded steel anchor rods embedded about five
slight 150 Yuan per metric ton increase in the past 2
inches in the tunnel's concrete roof could creep under load. The NTSB specifically faulted
weeks. Park expressed confidence that steel prices
the ceiling designer for failing to stipulate which kind of epoxy to use during installation.
will stabilize for a while at their current level once
the hikes are implemented.
"We could see further weakness in price next year
Ayala heads WAI for 2009
if global economy continues to falter, but I think price
will be stabilized and go up gradually if we are on
Antonio Ayala Reyna is the new president of the Wire Association International for
our way to recovery from the current economic
2009. Ayala is the 55th president of the 79-year-old association. He succeeds 2008
mess.”
president Ronald Reed of Horizon Wire & Cable.
Park noted that China would continue to spend
large sums of money to build infrastructure, which
Since 1998, Ayala has been director of Latin America sales at J.J. Lowe Associates Inc.
should consume much of the surplus inventory. In
Previously he was with AXA Group in Mexico, Conductores Latincasa of Mexico and
recent weeks Beijing announced a 4 trillion Yuan
Ericsson of Sweden. Ayala holds a degree in mechanical and electrical engineering from
infrastructure stimulus package for its economy.
The Engineering University at Veracruz, Mexico, and an MBA from Ohio University.
Bruce Darling, vice president of materials for
Ayala joined WAI in 2001 and has served on numerous association committees. He
Porteous Fastener Co., said he's no longer seeing "a
was the primary organizer for the 2008 International Technical Conference, in Mexico,
continuing to the price reduction we had been see- and was chairman of the 2004 Conference in Mexico. He has been a WAI short course
ing” on steel in China. "Others have told us that steel on extrusion instructor and translated educational and promotional materials for the
will go up after Chinese New Year so we are placing
Latin American and South American wire and cable markets.
our next round of orders before the holiday,” Darling
WAI executive director Steven Fetteroll noted Ayala's career has been in the global
told FIN. One of Darling's sources in China told him
industry and he "has developed an excellent understanding of the Latin American wire
steel mills have been reducing output in recent
and cable market. As a result, he has personally provided a strategic connection for the
weeks. "We believe steel price won't go down much
association to better reach this key market with not only our existing products and
further as a general trend for the first quarter…. price
services, but also to consider new specialized products. We have seen him roll-up his
will be stabilized for a while at current level,”
according to the Chinese source.
sleeves to get things done and we expect more of the same in the coming year," Fet-
The latest steel hikes could weaken China's
teroll said.
bargaining position at iron ore price negotiations with
WAI's 2009 executive committee members are: First vice president Dane Armendariz,
miners. But the mills are focusing on staying solvent
Henkel Surface Technologies; second vice president Dominique Perroud, Samp USA Inc;
in the short term. "The point for them is they have to
executive committee member Nicholas Nickoletopoulos, Ivaco Rolling Mills, and Reed.
return to profitability before considering the
Founded in 1930, WAI is a not-for-profit association with 2,500 individual members in
negotiations, 58 countries. WAI manages the Interwire Trade Exhibition and the Wire Expo event and
Shanghai economist Judy Zhu told Dow Jones. publishes the Wire Journal International and Wire Journal International Reference Guide
"They're now trying to consume iron ore inventories.”
through a subsidiary operation.
Web:
wirenet.org
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