Steel shortage update

According to Dr. Donald Ratajczak, professor of economics emeritus at Georgia State University, economic growth in China was "a major problem last year for all commodities, beginning last spring," Ratajczak said. "No one anticipated the magnitude of the Chinese appetite, and there was not enough capacity to meet that need."

He expects a more orderly market as China's domestic consumption slows and the world's economy adjusts to higher demand.

Ken Simonson, chief economist for the Associated General Contractors of America, also expects 2005 will not be as volatile. While some materials may have wide swings during the year, "overall, prices will not rise as much," Simonson said. He also noted China and other countries are increasing steel production. Also in 2004, China absorbed shipping capacity that would have otherwise been used to transport structural steel and other materials.

Ratajczak expects 2005 will see net steel prices decline, or at least remain unchanged. He said the price is currently rising about 2 percent a month, but there are signs that scrap prices are beginning to fall slightly. Simonson expects "some price increase but nothing like a year ago."

Auto makers are sending mixed signals - Toyota sees sales up 8% in 2005 while Nissan recently cut production for five days and Suzuki reduced domestic production by 20,000 vehicles per month during the first quarter.

The bottom line...look for pricing and production to stabilize this year and demand levels off.

No let-up for West Coast ports

West Coast ports in January began the year the way they ended 2004, with double-digit growth in containerized imports from Asia. Lead time for delivery that has historically been 90 days is now out to an average of 120 days.

Imports through the West Coast in January increased about 10.4 percent over January 2004, with the northern ports such as Oakland, Seattle and Tacoma showing especially impressive gains. Carriers since last summer redeployed some of their services from Southern California to the northern ports to escape congestion in Los Angeles-Long Beach.

Shipping executives predict that containerized imports in 2005 will increase at least 12 percent over last year's record numbers as U.S. trade with China continues to grow unabated.

Seattle led the West Coast in growth in January with a 57.4 percent increase in imports over January 2004. Imports increased 26 percent in Tacoma, 32.4 percent in Oakland and 25.4 percent in Long Beach.

Los Angeles, the nation's largest container port, was the only major West Coast gateway to experience a decline in cargo volume. Imports were down 12.5 percent, due in part to the diversion of vessels to the northern ports.

Also, four carrier groups introduced new-generation 8,000-TEU vessels into the trans-Pacific trade this past year. With marine terminals in Los Angeles approaching capacity, the four vessel strings called in neighboring Long Beach.

Shipping executives have been warning port authorities, marine terminal operators and rail carriers that 2005 will be another record year for containerized imports from Asia, and the shipping industry is concerned that the port and inland infrastructure will be incapable of handling the 12 percent growth that is projected.

Los Angeles-Long Beach last year experienced five months of congestion because of capacity constraints on the intermodal rail networks and a shortage of longshore labor.

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China Update
A monthly look at news from China
Click the title to read the story

CHINA: Up close and personal
When conducting business in China, always abide by the Confucian principles of showing humility, sincerity and courtesy in dealing with others and be sensitive to the concept of saving face.

Millions ready for Chinese New Year
China's peak Lunar New Year travel season, the world's biggest annual human migration, began on Tuesday, January 25 and about 2 billion journeys are expected across China in the next 40 days, state media has said.

New from China: wine made from fish
Who needs grapes when the day's catch can be fermented into wine?

China may approve first private airline
China's civil aviation regulator is expected to approve the country's first private airline after completing draft regulations to let private capital into the previously shuttered sector.

Rooster struts into New Year
Goodbye year of the monkey, hello year of the rooster!

What steel do we use?
by Mike Mortensen - Director of Engineering RBI-USA

The standard steel used in our ball bearings is 52100 steel. 52100 is a high chromium steel (about 1.5% chromium) with a high carbon content (roughly 1% carbon). The composition of this steel makes it very suitable for through hardening resulting in a material hardness range between 58 – 64on the Rockwell “C” scale. This steel provides both excellent wear resistance and rolling contact fatigue resistance. It is the most common bearing steel used worldwide and can be found in almost every bearing type.

Have a question or topic you would like to see covered? Click here to let Mike know!

Final Word
Actual instructions on seating players included in a mahjong game from China...

"Temporarily each of you, four players, represent a side and the very same man picks up the dice and throws once so as to see who is going to represent the temporary east and so on. If the number of points are 3,7,11 the man opposite the East, the West, if 2,6,10 the man on the right or South, if 4,8,12, the man on the left, the North, and if 5, or 9 the East himself starts drawing the topmost Position Indicator, the second, third and fourth by the south, west and north in their respective order and turn (counter clockwise). In turning over the Indicator each one of you will find where you are to be seated. By this simple process, the allotment of seats is determined."

So...let me see if I understand this...first I need a compass, then the first guy...ahh let's just play Go Fish.

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