A historic deal on nuclear and atomic energy between Iran and several nations is causing havoc with oil markets this morning. Alcoa’s CEO claims China will crack down on the semi-finished aluminum trade.
Iran Deal Reached
Crude oil prices initially fell by as much as 2.3% to $50.98 a barrel as investors reacted to the freshly-inked deal between Iran and six world powers which would open Iranian oil up to new markets. However, oil bounced off those levels as investors weigh the details of the agreement and whether or not it will overcome deep skepticism in Congress. Oil was recently trading unchanged at $52.20 a barrel.
Experts have warned that the deal could lead to a flood of new oil supply from Iran – the Islamic Republic has 30 million of barrels of crude in storage and ready for sale, according to FACTS Global Energy, an industry consultancy.
End of China’s Untaxed Aluminum Semi Industry?
Alcoa CEO Klaus Kleinfeld said it was his “strong assumption” that the Chinese authorities will soon try to shut down China’s untaxed semi-finished aluminum exporting industry.
“I’ve last been in China four weeks ago or so, and had a lot of conversations also with high level folks. They are very clear that this is not in line with their policy, and that they are deeply looking into this,” Keinfeld told Reuters’ Andy Home.
This would make sense because not only do semis skirt China’s aluminum 15% primary metal export tax but they also qualify for a rebate of China’s value-added tax.