There was a time when the government – or the ‘powers that be’ – could be trusted with the welfare of the people. When I was a kid I had a kind of blind faith that those elected to run the country (and the world) were intelligent human beings who had the greater good of the people at heart. If we invaded a sovereign nation, we had good reason to do so; if we closed a hospital it must have been because it presented a public health risk and if we incarcerated a body of people it wouldn’t be before they were all given a fair trial in front of a jury.
Today, I’m not so sure if any of the above still ring true – or whether they ever did. In his latest book, The Road to Little Dribbling – more Notes from a Small Island – Bill Bryson sums it up nicely: “In countless small ways the world around us grows gradually shittier.”
The political landscape of the 21st Century is characterised by ‘career politicians’ and self-interest rather than a sense of philanthropy and well-being. Most tellingly, however, it’s all about greed. Iraq wasn’t about saving the world from weapons of mass destruction; it was about oil and construction contracts and now, of course, it’s all back-fired as Islamic State runs amok and refugees risk life and limb, on choppy seas, to reach Europe.
In short, there is plenty to be concerned about; and that common theme running through most episodes of the X-Files has returned to haunt us – ‘trust nobody’.
I am constantly wracked with suspicion over the motives of the British Government, the European Parliament, whoever is in the White House and, lately, the World Trade Organisation.
It has been made abundantly clear that bestowing ‘market economy status’ upon the Chinese will be disastrous for the global steel industry and the livelihood of those employed by it. And yet, an online report by Reuters has confirmed my worst fears.”Although fierce debate is raging, all signs point to the EU accepting China as a market economy after December 2016.”
Why is it that Chinese steel companies are not bothered about making a return on capital? Because they can rely upon the support of the state. Tata Steel UK, of course, isn’t so lucky because the government’s hands are tied by EU state aid rules – meaning that it will sit idly by and do nothing. Disgraceful.
China has been ‘top-of-mind’ for the global steel industry for some time. Visit any conference anywhere in the world and somebody will be talking about China. My last leader was all about China. I’ve spent time in BBC radio studios – even on the day of Xi Jingping’s official state visit to the UK – discussing ‘the Chinese problem’ and the resulting job losses in Redcar, Scunthorpe and elsewhere. It’s a never-ending story, but now there’s a new kid on the block. He’s been lurking in the shadows, waiting for the right moment to strike. That kid is called ‘Market Economy Status’; the Chinese crave it and if we’re not careful they’re going to get it.
I worry that governments around the world sit back and do nothing, preferring to watch the growing tragedy of a situation unfold before taking decisive action. Look no further than Syria for proof.
I have a sneaking suspicion that the British Government will do very little for the ailing UK steel industry – preferring instead to curry favour with the Chinese over nuclear power rather than work on a solution to avoid further catastrophe for British steel. I am concerned that the EU is piling regulation upon regulation on its foundation industries and, far from creating a level playing field (craved by western steelmakers) are moving towards the complete opposite situation.
And now there’s ‘market economy status’ for the Chinese, something they simply don’t deserve. Granting it would be disastrous as it would open up the floodgates to more imports of cheap steel.
Nobody can accuse the steel industry – particularly the American steel industry – of not making its feelings known.
Following on from an open letter earlier this year, nine steel associations, including Eurofer, the AISI and the Steel Manufacturers Association have recently issued a statement expressing concern over China’s attempt to gain market economy status in December 2016 – just over 12 months away (see page 9).
My worry is that the powers that be are simply not listening; they don’t want to listen. They appear to have their own agenda and, oddly, it always seems to be detrimental to the interests of those who have the best interests of the countries concerned at heart. Don’t be too surprised if, by next Christmas, the WTO regards China as a fully-fledged market economy.
I would be lying if I said that you won’t be reading any more about China is this issue. China is ubiquitous. Our Japan Update on page 13 carries the headline China Shock Increases Uncertainty. On page 21, the conference report from Brazil notes that China ‘dominates the agenda’ and that’s probably it if you ignore the aforementioned News Focus article (page 9) and some of the answers to questions in this month’s Perspectives Q&A feature by ABB’s Christer Skogum. It goes without saying that China crops up in the news pages fairly frequently too.
China aside, there are Update articles on Latin America and India, plus an interesting feature from Global Strategic Solutions’ Sara Hornby entitled Low-Cost Steel from Low-Cost Scrap.
In addition to Germano Mendes de Paula’s conference review from Brazil, Joe Poveromo reports from a conference organised by the Society of Mining Engineers and the Canadian Institute of Mining in Minnesota, USA, and from Metal Bulletin’s 21st International Iron Ore Symposium in Vienna.
On three occasions this month I have spent time in the BBC Radio 5 Live studios answering questions on the ailing British steel industry. My on-air ‘appearances’ were the result of SSI UK and Tata Steel closing plants and slashing jobs in Redcar and Scunthorpe in the United Kingdom – and it’s all China’s fault.
The Chinese economy is slowing but China is producing more steel than it needs. Result? It ‘dumps’ excess metal on foreign markets, the global steel price dips and steel producers struggle to survive. It’s happening all over the world, but unlike in North America – where anti-dumping and countervailing duties are imposed on ‘rogue nations’ like the Chinese – Europe’s lumbering bureaucratic machinery is slow, and some would say unwilling, to react.
Something must be done, but I doubt if David Cameron, the British Prime Minister, will jeopardise his rather dangerous nuclear power deal with the Chinese by berating Xi Jingping for dumping cheap steel on the UK market.
The Chinese problem is one that requires a multi-lateral approach. Xi Jingping needs to be told – in no uncertain terms – that China can’t expect to be granted ‘market economy status’ (which it craves) if it doesn’t behave like one. Make no mistake: Chinese steel producers, unlike those in the west, don’t have to generate a return on capital. We’re back to what western steel producers crave most: a level playing field. But will they ever get one and does anybody really care? Not the UK government, it seems.
The proverbial ‘man on the Clapham omnibus’ must be wondering whether the British Government is serious about the survival of its homegrown heavy industry and, indeed, the much talked about ‘northern powerhouse’ it promised to create if a high speed rail link is established between London and ‘the north’. It’s all beginning to sound like empty rhetoric.
How is it that we find ourselves in a position where, through countless European directives and punitive green taxes, we have regulated our foundation industries into virtual oblivion? Why have we given steel producers in other regions of the globe an unfair advantage when it comes to competing on the world stage?
Applauding ‘globalisation’ is fine, but why should western steel producers play with both hands tied behind their backs?
This issue of Steel Times International discusses many different subjects. On the technical front we have three interesting articles on ironmaking and then, in keeping with our aim to keep readers abreast of the latest steel industry conferences, a report from the editor of the magazine on the 49th World Steel Association Conference, which this year was held in the Windy City, Chicago, USA.
Myra Pinkham discusses the US Oil Country Tubular Goods market and, in Perspectives, we hear from Thermo Fisher Scientific's Kevin Quinn who argues that overcapacity creates opportunities.
Regular features, such as industry news, country updates and, of course, the History page make up this month's issue and we still have one more issue to go before the year-end.