Here are some industrial metals industry-related stories we’re keeping an eye on this week:
China’s State-Owned and State-Controlled Enterprises
On the heels of Chinese Vice-President Xi Jinping’s visit to the United States, the SOE issue takes center stage. From TradeReform.org:
- Congressman Pete Visclosky testified before the U.S.-China Economic and Security Review Commission during their hearing on China’s State-Owned and State-Controlled Enterprises.
- Also, the competitive challenges posed by Chinese SOEs were the focus of a hearing at the U.S.–China Economic and Security Review Commission in Washington D.C. on Feb. 17. Elizabeth J. Drake, a partner at the Law Offices of Stewart and Stewart, presented testimony to the Commission reviewing the policy options available for addressing these challenges. In a new trade flow, Ms. Drake reviewed three ways the U.S. can help level the playing field between American industries and Chinese SOEs by: 1) confronting Chinese government subsidies to SOEs; 2) challenging discriminatory and distortionary contracting practices by Chinese SOEs; and 3) correcting anti-competitive and unfair trade practices by SOEs, according to TradeReform.org.
Of course, Chinese SOE policies — and progressive steps to mitigate them — have been and continue to be vital for US steel producers.
Vale’s Move to Spot Iron Ore Pricing
From Reuters: “Vale, the world’s largest iron ore producer, said [last week] it is selling 80 percent of its ore using spot prices, nearly completing a historic shift to market-based pricing for the principal raw material used in steel. The new system was prompted by Chinese steelmakers, Vale’s largest client group, who wanted to benefit more quickly from falling iron ore prices. Iron ore averaged $141.80 a tonne in the fourth quarter, 11 percent less than a year earlier and 20 percent less than the previous quarter.”
What will this mean for steel-buying organizations? Check in tomorrow for MetalMiner Editor Lisa Reisman’s take on the watershed move.