Posted on 04/29/2002 9:15:49 AM PDT by LarryLied
China's biggest steelmaker has seen its profits plummet as it faces what observers believe will be a flood of foreign steel into its domestic market.
Now that the US has slapped tariffs on steel imports in an attempt to protect its own industry, exporting countries are thought likely to look to China's huge and booming economy as an alternative market.
Baoshan Iron & Steel's admission that net profits for the first three months of the year were 39.5% lower than last year therefore comes at a bad time.
The company, the fourth biggest in the world by market capitalisation, said it made a profit of 547.8m yuan ($66.3m; £45.4m) for the three months, on sales which fell 2.3% to 7.09bn yuan.
Flooding in
The losses at Baosteel, as it is known, follow a 14.4% fall in profits for 2001 as a whole from the previous year.
"In the first quarter of 2002, the domestic and international steel markets were sluggish and the prices of our core products such as cold-rolled and hot-rolled steel plates fell 11% year on year," it said in a statement.
Imports have surged since the US introduced selective tariffs of up to 30%. China's newly-minted membership of the World Trade Organisation and the lower tariffs it brings with it is also encouraging other countries to get in on the act.
Baosteel is now asking for government protection.
Help is on the way, in the shape of anti-dumping investigations launched against cold-rolled steel imports from South Korea, Russia, Taiwan, Ukraine and Kazakhstan.
At the same time US steel producers were being stuck and out bid...
While at the same time China put up barriers to trade...(or course not exporting)...
This is essentially forcing sellers to export to developing markets in much more of a FAIR trade scenario...
They will complain about lower profits... but don't complain to us... complain to the Chinese...there should be a smooth and steady opening of the world markets... which to China that means 'everyone except us...'
Thank you Ralph Nader, friend of the consumer (barf).
The mark-up is where they made their gold... not in lowering the prices...
I would have to do some research on the problems etc... but I will venture to say that revenues for US steel manufacturers steadily declined... while prices remained relatively the same with only minor price fluxuations...
Stuff like this is why I didn't rip my 2004Bush bumper sticker off when CFR passed. I'm in a wait and see mode at the moment.
He just got one of his stars back :)
GO BUSH
YOY prices drop with economic ups and downs...
Now if we look at it in much longer terms... we can see fairly steady pricing, with the exception of creating a market that 'just undercuts' US manufacturers...
They won't cut prices too much, just enough to gain marketshare... the $$$ for the dumpers was in low cost manufacture and high market prices...
Free traders believe in free competition, no? Thats exactly what was not happening, not because of us, but them... there were brick walls everywhere in the world all funneling competition into the US...
Considering the RAT on your home page, I would say it quite appropo.
I think that you are also right re their mental abilities to understand these complicated issues. So they develop a mantra and use it like one of the 10 commandments. The problem is that in these issues, often there are so many issues and shades of variance in each issue like this one re the steel tariffs. You can't have a simplistic mantra for everything in life. Our forefathers didn't intend for mantras that if followed blindly could lead to damaging your self or even suicide.
Then, they try to make these things a moral issue like you will go to hell if you ever have a tariff. Then this repels a who lot of voters who are looking for some common sense instead something written on stone from a higher source.
What angers them is GW is not bound nor locked in with this jingo mantra thinking. He will not allow a small group of people to put him and American into a box and then punish us when we try to get out of their pre conceived box.
Exactly.
BUT, their domestic steel industry is decimated by this action, because they cannot compete, unless they prop it up with money from the government. Money from the government in China is not a available as it was a few years ago.
This action needs to be viewed as more than just a trade question. If China has its resources diverted to propping up their steel industry, they have fewer resources for their mischief in other areas. This is a good thing.
In addition, if they choose to let their steel industry wither, they will not be able to manufacture items needed for their war machine.
I cannot see where this helps the Chinese at all. Good for W!!
Does this make GW perfect? No, but his batting average right now makes me happy.
Will GW make some mistakes? Yes, but who doesn't.
When issues like this come up, I ask myself what President Goron would have done? President Goron would have closed down all our steel mills so we couldn't build any more cars and ships that pollute the environment!
You are leaving aren't you?
Yet your same theory doesnt not apply to the US? What about MY resources that are (tariff) diverted to propping up OUR steel industry? You cant be serious.
Thanks again for showing every reader here that you cannot back up your goofy economic theories with a solid example of it working in real life and instead resort to personal attacks.
Steel production is a national security issue, first and foremost. All other considerations are secondary.
We were having a discussion...
What is better... to have the 'rich nations' feel and obligation to buy imports from the 'poor nations' an call that process of pouring money into a broken system 'development'... or....
To realize that 'development' is not entirely tangible cash assets...
In most cases 'development' is not a tangible asset...
Competion being compelled upon someone forces them to move. That in turn forces reforms of various sorts... such as management practices, professionalsim, reformed accounting practices, ect...
nessesity is the mother of invention...
Bush is doing more to develop the world than anyone I have ever seen...
Developing is painful, but required...
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