英語學習筆記

by Alex MacDonald

　Producers in the U.S. and Europe have increased prices for
flat steel by as much as $50 a ton or more and in some cases re-
started idle production as customers replenish inventories and
auto makers benefit from government-sponsored car-scrapping
subsidies.
　In China, the world's largest steel-producing nation, steel-
makers are operation near capacity in order to satisfy demand
stemming from the government's four trillion yuan($585.44 bil-
lion) economic-stimulus package.
　But despite a couple of bright spots in emerging economies
such as China, steelmakers warn that global demand won't
recover to last year's peak level until 2011 at the earliest. As a re-
sult, many mills will have to operate below optimal production
rates in the interim.
　"Unless real demand shows further momentum beyond in-
ventory restocking, we're at risk of negative price pressures"
again, said John Lichtenstein, managing director of Accenture's
metal-industry group. The "risk is that you have multiple play-
ers who decide to ramp up production at the same time because
they see more need for steel."
　"Overcapacity is very hard to manage," said Andre Gerdau
Johannpeter, chief executive of Brazil-based Gerdau SA. "Clos-
ing idle capacity is something we have already done... We are
in survival mode because we don't know how long" it will take
for demand to recover.
　Integerated steel mills, which make up about two-thirds of
the world's total production, need to operate on average at
75% of their full production capacity to break even, according
to steel executives, analysts and consultants. Electric arc fur-
naces, which account for the remaining third of global produc-
tion, need to operate at about 60% depending on the above factors.
　At the moment the global steel industry is operating at
about 73% of its full production capacity and 62% if China is
excluded, according to Macquarie Research Commodities. In
the U.S. and Europe, the utilization rates are even lower at 48%
and 52%, respectively. Steelmakers such as Russia's OAO Sev-
erstal, Gerdau and U.S.-based Nucor Corp. and Steel Dynamics
Inc. all agreed the industry needs to remove excess capacity in
order to return to profitability.
　Lakshmi Mittal, CEO of the world's largest steelmaker, Arce-
lorMittal, said, "We are starting to see some green shoots in our
industry," but "the situation of overcapacity is likely to continue
this year and beyond, particularly in the developed world."
　ArcelorMittal Has already shut down two plants producing
finished steel in the U.S. and may consider shutting more if the
automotive industry doesn't fully recover. Meanwhile, Gerdau is
closing one idled steel plant in the U.S., suspending production
at another and entering talks with union leaders to shut a third.
　The global steel industry is facing about 300 million to 400
million tons of excess capacity, said Alexei Mordashov, chief
executive of OAO Severstal, Russia's largest steelmaker.
　"Without restructuring [this excess capacity], we believe it is
impossible for a recovery in our industry or a recovery in our
margins in the short term or the medium term."