Articles in Category: Exports

India aluminum

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The Indian aluminum sector, which once stood firmly on the path of growth, today finds itself buffeted by the winds of uncertainty because of the COVID-19 pandemic.

Industry leaders have suggested many measures to the India government to put the sector back on track.

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Indian aluminum sector calls for removal of export cap

Uppermost on the list is a request to allow an export scheme for aluminum without any cap on the total exports.

The Engineering Export Promotion Council (EEPC) of India recently wrote to the Commerce Minister to continue with the Merchandise Export from India Scheme (MEIS Scheme) without any limit on the aluminum exports. The change would help the sector survive the current crisis situation, the Council argues.

Floated last year, the government trimmed the MEIS in the fiscal relief package recently extended to exporters. The government found it “unsustainable.”

The view is that, in general, the MEIS had failed to boost exports and capture new markets.

Critics argue MEIS cut hurts Indian aluminum sector

But experts, like Economics Affairs Secretary R. Gopalan, beg to differ.

Writing in the Financial Express, Gopalan said shrinking the MEIS had hurt the Indian aluminum industry, as the industry had to continue to rely on exports because of weak domestic demand. As such, so, the government had to support aluminum exports.

The only option left for the industry to sustain itself in these times of the pandemic is to export aluminum products, Gopalan said. As such, the decision to suddenly stop the MEIS, he felt, could have “a debilitating impact” on exporters’ ability to survive under current difficult conditions. Gopalan felt it would hurt exporters that work on long-term contracts.

Indian aluminum is one of the high-growth areas which could propel the nation’s GDP. However, the COVID-19 pandemic has already affected India’s aluminum exports. Export values declined 11% from U.S. $5.7 billion in fiscal year 2019 to U.S. $5 billion in fiscal year 2020. The new directive with regard to MEIS would render aluminum exports vulnerable and uncompetitive.

Mining group calls for import curbs

In parallel, the Federation of Indian Mineral Industries (FIMI) has urged the government to curb aluminum imports. Furthermore, the federation asked the government to facilitate the “tapping of rich and almost inexhaustible” domestic resources by local players.

Despite robust domestic demand and sufficient domestic aluminum capacity, India imported 60% of the aluminum it consumed. The result of this forex outgo, according to Vice-president R.L. Mohanty.

Domestic primary aluminum producers — such as Hindalco Industries and the Anil Agarwal-led Vedanta Ltd — are already working with the government at three levels: primary aluminum, scrap and downstream products. They have been asking the government to implement remedial measures, such as anti-dumping and anti-subsidy duties, the Business Standard reported.

Hindalco, the world’s largest aluminum rolled products manufacturer (especially in beverage cans and auto body), recently acquired Aleris. With this move, the company can now produce aerospace-grade aluminum sheets. It is also focusing on building capability in India to be part of the India growth story.

Meeting future aluminum demand

Domestic consumption of aluminum is expected to reach 10 million tons by fiscal year 2031-2032. To meet this future demand, India needs to increase bauxite production from 23 million tons in fiscal year 2019 to approximately 70 million tons by that time. Alumina production would have to rise from 7.4 million tons to 20 million tons.

India is No. 2 in the world in aluminum capacity. The country has primary aluminum capacity of 4.1 million tons per year and downstream processing capacity of 3.9 million tons.

Recently, the aluminum industry had made huge investments to increase domestic production capacity from 2 million tons per year to 4.1 million tons per year.

But experts fear that the COVID-19 crisis, coupled with the new government policies, could derail this growth story.

See why technical analysis is a superior forecasting methodology over fundamental analysis and why it matters for your aluminum buy.


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India’s steel production contracted since the arrival of COVID-19. However, exports surprisingly notched a new high in the April-July 2020 period.

Steels exports more than doubled in these months to hit their highest level in six years, reported news agency Reuters.

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Chinese demand soaks up India’s exports

Much of the Indian steel exports headed to China, despite ongoing tensions between the two nations.

China’s emergence as a new leading buyer of Indian steel has caught producers and analysts unaware. China replaces traditional importers like Vietnam, Italy and Belgium.

According to a China Iron and Steel Association official, it was paying particular attention to the imports of hot-rolled coils. The latter is used mostly to make pipes, automobile parts, and engineering and military equipment.

Indian production set to continue contraction

On the production side, a new report by Fitch Ratings has predicted further contraction in fiscal year 2021.

The ratings agency said higher prices supported by the price rebound in China will drive margins in the second quarter of the fiscal year and beyond. Hot-rolled steel sheet prices in China have improved by around $100 per metric ton since April 2020. Indian prices had started to tick up since late July, with a lag.

But the silver lining, according to Fitch, is that steel volumes could further improve over the next few quarters. Rural consumption and government spending on infrastructure would lead the improvement, and lead to better margins due to operating leverage.

On the exports front, Indian steel companies, like Tata Steel Ltd and JSW Steel Ltd, sold a total of 4.64 million tons of finished and semi-finished steel products in the world market between April and July. That total compares to 1.93 million tons shipped in the same period a year earlier.

Of the 4.64 million tons, Vietnam and China purchased 1.37 million tons and 1.3 million tons of steel, respectively.

Steel analysts here feel the exports jumped because of reduced prices as Indian sellers tried to get rid of a surplus generated by the impact of COVID-19 on domestic demand.

Analysts are also optimistic that with the Unlock 4.0 plan now announced, activities such as construction would increase. As a result, the plan would lead to an increase in local consumption, too. Overall, in the short term, exports would continue to grow over domestic consumption in India.

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copper smelter

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This morning in metals news: copper on the SHFE is headed for its fifth straight month of price increases; a Swedish joint venture is ramping up its efforts toward producing fossil-fuel-free steel; and Mexico is instituting a new export pre-approval process to avoid reimposition of steel tariffs by U.S. President Donald Trump.

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SHFE copper on the rise again

The SHFE copper price is headed for a fifth straight month of price rises, Reuters reported.

According to the report, the five-month streak marks the longest such upward rise in 11 years.

Swedish JV eyes fossil-fuel-free steel production

A joint venture in Sweden, Hybrit, is looking to make big changes to how steel is produced.

In particular, the JV is looking to remove coking coal from the equation, Bloomberg reports. Instead, the steel production process would feature hydrogen and other forms of clean energy.

SSAB AB, LKAB and Vattenfall AB are the operators of the JV.

Mexico to institute steel export pre-approval process

On the heels of President Donald Trump’s recent reimposition of the 10% Section 232 tariff on some Canadian aluminum, the Mexican government is hoping to avoid a similar outcome for its steel exports to the U.S.

According to Bloomberg, Mexico is putting into place a new pre-approval process for steel exports.

In short, the approval process — which would go into effect Sept. 4 — would confirm the steel exports did not pass through a third country.

Does your company have a steel buying strategy based on current steel price trends?

copper mine

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This morning in metals news: miner Rio Tinto revised its 2020 refined copper output guidance; Tokyo Steel resumed exports to China for the first time in a decade; and the future is uncertain for Liberty Steel’s Georgetown steel mill.

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Rio Tinto revises 2020 copper output guidance

Amid operational delays at Rio Tinto’s Kennecott mine in Utah, the miner has revised its 2020 refined copper output guidance.

“We are working closely with our customers to limit any disruptions and expect to have the smelter fully operational in two months,” the miner said in a prepared statement.

As a result, Rio Tinto moved its production guidance for refined copper down to 135-175 kt (from 165-205 kt).

Tokyo Steel to resume exports to China

Meanwhile, Japanese steelmaker Tokyo Steel is set to send exports to China for the first time in 10 years, the Nikkei Asian Review reported.

The exports come amid surging steel demand in China as it recovers from the impact of the coronavirus pandemic.

Georgetown steel mill’s future uncertain

Liberty Steel said its Georgetown steel mill’s future is “unsustainable,” the Post and Courier reported.

In April, Liberty Steel announced the closure of the Georgetown mill for at least three months. However, the mill remains closed.

Do you use cost breakdowns in your steel negotiations? See other tips in negotiating with mills and service centers.


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This morning in metals news: the Aluminum Association of Canada reported the country’s aluminum exports to the U.S. have declined; Great Lakes region steel production is down this year; and the International Tin Association commented on Yunnan province’s tin stockpiling initiative.

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India’s sponge iron manufacturers have appealed to the federal government to restrict the exports of iron ore pellets.

Such a move would help cut the price of steel and increase consumption in the domestic market.

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While small beer compared to the U.S.’s trade war with China, the growing dispute between Washington and Brussels over subsidies by aircraft makers is likely to develop into an escalating series of tit-for-tat measures this year.

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Before we head into the weekend, let’s take a look back at the week that was and some of the metals storylines here on MetalMiner:

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This morning in metals news, U.S. imports of steel were down 20% through the first four months of the year, a primary aluminum production plant in Brazil part-owned by Norsk Hydro is restarting after an earlier power outage and China is importing U.S. copper concentrate after Chinese companies won tariff relief.

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Maksym Yemelyanov/Adobe Stock

Before we head into the weekend, let’s take a look back at the week that was and the metals storylines here on MetalMiner:

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