by Stefano Colletta
It seems obvious to say that “things” move, yet it is like that. While Galileo Galilei had the courage of reversing the beliefs of the Italian 1600, he changed the paradigms, he dared affirming that earth, and not the sun, was turning, why don’t we succeed in moving? Well, if it is so, the sun will burn us, who are standing still. In economics and in the international politics, the concept expressed above is moving day by day. Let’s just think of the political movements in Crimea, let’s try to think how the economy of a Country like Italy is moving in a slow and fluctuating manner. We are overcoming the recession period, even if 2013 was affected by a negative sign. We start 2014 with the 1.1% growth in January, then we drop by 0.5% in February, maintaining a tendential 0.4% on yearly basis. The Country’s domestic demand is fragile and these are the numbers that an industrial power like Italy can generate. We resist thanks to export. In the rest of old Europe our situation is not so isolated as we might think. And can all this affect the dynamics of increase or decrease of raw materials? Well, let’s just consider the slowdown of the Chinese home demand, the stricter and stricter environmental constraints and the difficult access to credit. How can these elements influence a company like Baosteel in Shanghai?
In 2013 the net profits of this world giant dropped by 42%, and we do not expect a particular upswing of its business situation and, more in general, of its Country. But we have said at the beginning that the situation (also of the iron metallurgy) is moving and is constantly evolving. On one side, for instance, drawn building components are travelling at very low values while on the other side bolts are rising. Building products are then dropping while automotive ones maintain their positions. On one hand Morocco, Algeria and Tunisia are markets with rising trends, on the other hand the domestic growth of iron metallurgy in these Countries must induce us to wonder: “how long will these nations still absorb our products?”. How much time do we still have before some of them start conquering market shares increasing their home production? Dubai, for instance, has become a world area for the aluminium machining and transformation, due to its low energy costs. And also this nation moves the international arena. And besides, Africa with nations like Mozambique, Angola, South Africa and Kenya, are today interesting Countries, where we can sell what we produce. But in all this turmoil, numbers and statistics going up and down, once neglecting the obvious need of an efficient and effective state apparatus, able to generate lighter tax burdens and more compatible energy cost, with less bureaucracy, we will win this challenge if we move in the right manner, if also businesses do their part.
Capability of innovating industrial processes and products, of doing research wherever necessary, of approaching more dynamic markets, of reorganizing and of structuring adequate sizes will be the elements on which the iron metallurgy will have to stake, just moving to succeed in making profit.
What do you think about that?
by Stefano Colletta