Articles in Category: Exports

An Indonesian Finance Ministry official said the government may not be done tinkering with export tax rules involving raw ore just yet. The island nation’s Energy and Mineral Resources Ministry partially lifted a ban on raw ore exports late last week.

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“We want the export duties to push domestic processing. That’s the principle,” Suahasil Nazara, head of the Fiscal Policy Office at the Finance Ministry, told reporters, adding that the taxes were “not just for increasing state revenues. There’s a high possibility we will continue with a scheme that has layers, depending on completion of smelters.”

Outokumpu Adds to North American Stainless Rebar Line

Outokumpu recently unveiled a new stainless rebar offering for the North American market at the World of Concrete trade show in Las Vegas.

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Following an expansion of its stainless rebar capabilities at its facilities in Richburg, S.C., Outokumpu will now sell stainless rebar in coil, cut-to-length or in bent shapes. The Richburg facility has capabilities to cover a full range of rebar dimensions between sizes #3 and #8 (from .375 inches to 1 inch) and lengths up to 60 feet, and will offer short lead times for customers in North America.

Indonesia issued significant new mining rules last Thursday that will relax its ban on exports of nickel ore. Over the weekend, I went to check analysts’ opinions on this new development. Not surprisingly, almost everyone thinks this is bearish news for nickel prices.

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I am often a contrarian and this time, of course, I have a different opinion. I think the outcome of this revision is bullish for prices. What’s more, I think this is a great opportunity to buy nickel since prices might trade above today’s levels for the rest of the year.

Indonesian Nickel Ban

Before we get to analyze the price impact of the new rules, let’s quickly review what the ban was about in the first place:

Indonesia imposed an export ban for unprocessed material — essentially raw ore — back in 2014. A year before the ban kicked in, Indonesia exported around 60 million metric tons of nickel ore. Nickel ore contains an average of 1 to 3.5% of nickel. Indonesia banned exports to encourage downstream investment as this would eventually be better for the country, as it would generate more revenue as the material is processed domestically and it would build a local processing industry. Read more

Indonesia introduced new rules last week that will allow exports of nickel ore and bauxite and concentrates of other minerals under certain conditions in a sweeping policy shift by the key global supplier, Reuters reported.

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A ban on unprocessed ore exports was imposed in 2014 to, the thinking went, encourage investment in mills and smelters in the islands. The government of Southeast Asia’s biggest economy has faced a hefty budget deficit since and missed its 2016 revenue target by $17.6 billion.

The resumption of shipments may have been drafted to help stop the gap.

The new regulations, which took effect on Wednesday, sent nickel prices tumbling more than 5% to a four-month low of $9,660 a metric ton before they recovered.

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The rules include broad changes to permit extensions, which may now be applied for up to five years in advance of expiration, as well as new divestment requirements.

A massive stockpile of 500,000 metric tons of aluminum has been trucked out of the Mexican city of San José Iturbide and shipped to a remote port in Vietnam, according to shipping records and people familiar with the matter.

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The Wall Street Journal reports that the stockpile is believed to be related to or entirely the product of Chinese aluminum producer China Zhongwang. As a result of moving the massive stockpile, Vietnam has become a major importer of aluminum extrusions this year.

Preliminary Steel Exports Down

Based on preliminary Census Bureau data, the American Iron and Steel Institute reported that the U.S. imported a total of 2,682,000 net tons of steel in October, including 2,225,000 nt of finished steel (down 3.4% and up 4.7%, respectively, vs. September final data).

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On the year-to-date (YTD), through 10 months of 2016, total and finished steel imports are 27,486,000 and 22,017,000 nt, down 19% and 19.8%, respectively, vs. the same period in 2015. Annualized total and finished steel imports in 2016 would be 33.0 and 26.4 million nt, down 15% and 16.1%, respectively, vs. 2015. Finished steel import market share was an estimated 26% in October and is estimated at 25% on the year.

Subsidies given by the U.S. state of Washington to Boeing are illegal under international trade rules derived from the General Agreement on Tariffs and Trade (GATT), the World Trade Organization said on Nov. 28.

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It was a victory for rival aircraft maker Airbus and the European Union. The ruling from a WTO panel is the latest blow in a drawn out trans-Atlantic battle between the aviation industry’s two titans, which has seen both Airbus and Boeing score points along the way.

In the decision, the WTO said that subsidies set up by Washington state to support production of Boeing’s 777X commercial jet, were “prohibited” as they encouraged the use of domestic materials, fueling unfair trade distortions.

The panel called  for the subsidies to be withdrawn within 90 days.

Airbus was represented by the European Union in the case while the U.S . federal government fought for Boeing and Washington state because companies and regional authorities are not represented at the Geneva-based WTO.

Potential Tata, Thyssen Merger Could Shutter Half of Port Talbot

Tata Steel and Thyssenkrupp AG are looking at reducing the size of Britain’s largest steel plant in Port Talbot, Wales, industry sources told Reuters, as the two firms press ahead with merger plans for their European steel operations. The plan would also deal with the overcapacity afflicting the industry.

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The move could see one of Port Talbot’s two blast furnaces shut, halving the plant’s capacity. Up to 4,000 people are employed at the site.

Have you brought your metals suppliers into the digital economy? Would you like to?

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Tracking shipments, confirming delivery schedules and knowing when rail, ship or road bottlenecks are affecting your materials supply chain can give you the time and cost certainty you need to run your business more efficiently.

Are your suppliers part of a proprietary supplier network? From an overall digitization perspective, asking suppliers to join a proprietary supplier network in today’s world, especially for the complicated metals supply chain, would be like giving them a model T to get from point A to point B on today’s complicated interstate highway system.

For manufacturers, the metals supply chain can involve international freight, financial risk management, logistics and technical expertise. Yet many suppliers still aren’t optimizing the technologies to track, hedge, ship and manage your metals purchases that are available today.

What does readying your suppliers for the digital economy really require? Join Jason Busch from Spend Matters and Marco De Vries, Senior Director, OpenText Business Network, as they discuss and debate the topic. They’ll explore a range of topics and their impact on procurement and supply chain transformation: The Internet of Things (IoT), peer-to-peer, the sharing economy, AI/machine learning, platform business models, social collaboration, blockchain and more.

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Tune in Thursday, November 17th at11:00 AM Eastern (10:00 AM Central and 4 PM U.K.). The even will be available On-Demand after the day of recording. Register Now!

The tight oil and natural gas story here in the U.S. is often framed as a struggle between environmentalists who want to keep it — and other fossil fuels such as tight oil — in the ground, and drilling and exploration companies who want to sell it as a home heating and transportation fuel that at least burns cleaner than coal.

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What’s often left out of the discussion is the advantages gas can provide for plants, factories and other major industrial users that have nothing to do with the light switches in your house or apartment.

Voestalpine's reducing tower

Voestalpine’s 450-foot-high direct reducing tower near Corpus Christi, Texas, takes iron ore pellets and reduces them to 91% iron briquettes. Customers include steel suppliers for BMW and Mercedes-Benz. Source: Jeff Yoders

Austria in Texas

Last week, I toured Austrian specialty steelmaker Voestalpine AG‘s new $1.4 billion, direct-reduction hot-briquetted iron (HBI) production facility near Corpus Christi, Texas. It’s estimated that company’s investment will generate an estimated $600 million over the next decade and the new facility has already added 190 jobs to the local economy.

HBI, or sponge iron is a pre-material used in steel production. The new Texas facility takes iron ore pellets that are roughly 60% iron and reduces them down to HBI that is 91% iron. They use a high-temperature, natural-gas fueled furnace tower, now the tallest building in South Texas at 450 feet, to “reduce” oxygen and other impurities out. Read more

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Kevin Dempsey

MetalMiner Managing Editor Taras Berezowsky recently sat down with Kevin Dempsey, Senior VP for public policy at the American Iron & Steel Institute. Dempsey leads the AISI public policy team representing the interests of North American steel producers and also serves as General Counsel to the Institute. Before that he was a practicing attorney who specialized in trade matters.

During his years on Capitol Hill and in the private sector, Dempsey has worked extensively on international trade negotiations, including the Doha Development Agenda and the original negotiations on the accession of China to the World Trade Organization. He also has considerable experience with U.S. and international law related to subsidies, trade remedies, market access, intellectual property rights, and product standards, as well as U.S. legislative procedures for authorizing and implementing trade agreements.

As such, he possesses a veritable wealth of knowledge about the issue of market economy status for China and how that would impact the U.S. steel industry.

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Taras Berezowsky: Just initially, I saw in your bio that you had worked on China’s original agreement of accession to the WTO. In what capacity did you work with them?

Kevin Dempsey: I was a lawyer, a trade lawyer, in private practice representing a number of U.S. industries that were interested in the question of China’s role in the WTO and making sure that the rules going forward were going to be fair ones that ensure fair competition with China.

A big issue at the time was the extensive state involvement in the Chinese economy and the need to make sure that we had effective laws, including the ability to continue to treat China as a non-market economy under the anti-dumping law.

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Finished steel imports into the U.S. were down in August and Indonesia may finally restart shipments of raw ore to other countries, which could bring nickel back to China.

Steel Imports Still Down

Based on preliminary Census Bureau data, the American Iron and Steel Institute reported recently that the U.S. imported a total of 2,989,000 net tons (NT) of steel in August, including 2,307,000 net tons of finished steel. That’s down 8.5% and 6.6%, respectively, vs. July final data.

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Year-to-date, through eight months of 2016, total and finished steel imports are 21,962,000 and 17,601,000 nt, down 22% and 23%, respectively, vs. the same period in 2015. Annualized total and finished steel imports in 2016 would be 32.9 and 26.4 million nt, down 15% and 16%, respectively, vs. 2015, if the current trends hold.

Finished steel import market share was an estimated 25% in August and is estimated at 25% on the year-to-date.

Key finished steel products with a significant import increase in August compared to July are standard pipe (up 33%), wire rod (up 23%), structural pipe and tubing (up 18%) and hot-rolled bars (up 15%).  Tin plate (up 12%) had a significant year-to-date increase vs. the same period in 2015.

Indonesian Mining Rules

Indonesia is finalizing an overhaul of its mining rules that could give companies up to five more years to build smelters, and reopen exports of nickel ore banned since 2014, the country’s mining minister said on Tuesday.

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The proposed changes provide a way around a 2017 deadline for full domestic processing of mineral ore, potentially pushing completion of that aim to 2022, but also possibly undermining investor confidence.

Let’s set aside Donald Trump’s one-track talk on China as a currency manipulator for just a sec, and focus on a slightly less understood, and arguably bigger, issue — the role of Chinese state subsidies and state-owned enterprises.

Using the steel industry as an example:

Top 10 Chinese Steel Companies in 2014

top 10 list china steel companies

With the exception of Shagang Group, China’s biggest steel companies are owned — therefore subsidized and otherwise supported — by Beijing. Courtesy of the American Iron and Steel Institute (AISI).

Because nine of the top 10 steel companies in China are SOEs, which get special support (read about it in our new project,China vs. the World,” here) — it ultimately spurs trends like these:

growth-china-steel-industry-vs-US-2000-2015

Almost immediately after China joined the WTO in 2001, the country’s steel industry began its exponential rise. Courtesy of AISI.

china-steel-exports-2005-to-2015

The Great Recession nipped Chinese exports a bit, but state-owned enterprises continued to be incentivized to produce by the Chinese government while domestic growth stagnated within the last few years, leading to a flood of Chinese steel being pushed outside the country’s borders. Courtesy of AISI.

A Special MetalMiner Project: Learn why China getting market economy status may just be the biggest trade issue of our time – and how it impacts the U.S. steel industry – in “China vs. the World.

china shipping port title