Tag: NAFTA

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Imperial Steel Winnipeg

TPP could threaten North American steel industry

north-america-globe_NAFTAThe Trans Pacific Partnership (TPP) is under negotiation and the impacts for the auto-parts manufacturing industry in North America are of great concern. Under the current North American Free Trade Agreement (NAFTA) requirements, a regional value content (RVC) of 62.5 per cent must be attained for automobile parts and light-duty vehicles and 60 per cent for other segments of the auto industry. This could be decreased to 50 per cent under the TPP.

The impact for not only steel and other auto parts manufacturers but for the automobile industry itself would be extremely detrimental. The decrease in RVC would offer an advantage to producers whose primary supply chain is outside of the TPP region. For steel producers providing products such as tubing and piping to the automotive industry, an RVC disadvantage within the TPP would encourage off-shore sourcing and supply, creating devastating consequences for North American economies.

The Canadian Steel Producers Association has issued a joint press release together with the American Iron and Steel Institute and Mexico’s CANACERO to make governments aware of the impact of this potential decision. A strongly worded letter was released on September 22 addressed to Ed Fast, Canadian Minister of International Trade, Ildefonso Guajardo Villarreal, Secretary of Economy of Mexico; and United States Trade Representative Mike Froman, outlining their concerns.

At Imperial Steel, we support these efforts to ensure a healthy steel industry. Imperial Steel produces piping and tubing products for both the automobile and agricultural industries. These include galvanized, aluminized, welded, hot rolled and cold rolled steel tubing. For more information on our products visit us at imperialsteel.com

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Imperial Steel Winnipeg

Manufacturing: The Key to a Healthy Economy

The manufacturing industry is vital to Canada’s economy, contributing 14 per cent to the GDP, creating millions of jobs, and being progressive in developing innovative and green technologies. While newer “high tech” and service industries, move into the spotlight, manufacturing is the backbone that bolsters these industries as a consumer of their products and services. The health of the Canadian manufacturing industry is a gauge upon which to judge the economy as a whole.

Canada-Manufacturing-IndustryUnfortunately, industry statistics show that manufacturing in Canada suffered a sales decrease of 1.5 per cent in September over August, due to lower sales in the vehicle assembly industry as well as coal and petroleum products. These statistics are particularly important as a weakened manufacturing sector was a key factor in the global recession of 2008-2009, spurring many countries to take measures to strengthen their manufacturing base.

Government policy is one way to encourage a healthy manufacturing industry. Canada must maintain and develop government policies to ensure that the manufacturing sector remains not only stable but continues to grow in the “new” economy. Measures such as tax cuts, the federal government’s Accelerated Capital Cost Allowance, and allowances for training have worked in the past to bolster the manufacturing industry and should therefore be continued. Measures considered in the TPP must reflect pro-manufacturing priorities advocated for by all three NAFTA countries.

Seventy-five per cent of all products contain steel–making it a critical part of the manufacturing industry. At Imperial Steel we look forward to Canada making the right decision to strengthen its manufacturing base, particularly in the automotive industry where many of our tubing and piping steel products are used.

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Imperial Steel Winnipeg

What Does Your Crystal Ball Say?

crystal-ball-globe-business-manKnowing what the future holds does appeal to many people. And business owners want nothing but to determine the future of their companies and where they will stand in the years to come. However, predicting the future is one of the most difficult, yet rewarding things in the industry. Seeing tomorrow from today’s perspectives and insights, will give you a fighting chance when defending against potential and unforeseeable consequences to a certain degree. And the same thing goes for one of the biggest industries in any country i.e. steel. Mentioned below are some very important factors to consider if you want to predict a big change for your steel business:

Market Conditions
Like other industries and markets, the market for steel is also subject to significant fluctuations as it is a precious commodity. Prices are also influenced by market conditions. For instance, if there is a shortage in the supply of steel in the market and the demand is high, the prices will automatically go up.

Inflation Rate
Another factor that plays its part in the reshaping the future of local steel industry is the inflation rate of the country. Although, some might not link inflation with the price of steel, but it is important to understand that inflation does contribute towards determining the price of steel. Inflation can indirectly affect the sales and disrupt the balance between demand and supply.

Dollar Exchange Rates
Fluctuations in exchange rates of currencies such as the dollar will have an impact on the steel industry. For example, a rise in the value of the dollar will increase the worth of steel while a decrease in exchange rates will result in a devaluation of steel.

To predict the future, experts also use these parameters to forecast the future of the steel industry. Steel businesses keep an eye on many other factors along with the ones mentioned above to better prepare for the future and minimize the risk of losses.

At Imperial Steel, we work hard to stay on top of trends and market conditions so that we can offer the best product at a fair price.