India

Social network Facebook recently announced an agreement with a Mumbai-based clean energy firm CleanMax for a 32 MW wind power project in India’s southern province of Karnataka.

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Facebook to purchase energy from Indian wind power project

wind power and solar power installations generation

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CleanMax will own and manage the plant. Meanwhile, Facebook will purchase the power produced.

Indian financial paper Mint quoted Urvi Parekh, head of renewable energy at Facebook, as saying the partnership will enable new solar and wind power to be generated in the near future. As such, it would contribute to the decarbonization of the Indian electrical grid.

Incidentally, nearly 50% of the project capacity has already been commissioned and is generating power.

This is not the first such project in Asia involving Facebook.

In October 2020, the social media giant signed a Power Purchase Agreement with a Singaporean energy company, Sunseap Group. The deal would see it utilize solar panels on the rooftops of 1,200 public housing blocks and 49 government buildings.

In turn, Facebook will receive Renewable Energy Credits (REC) produced by the project once it’s done next year. Facebook will buy up to 100 MW of power at a previously agreed upon price.

Last week, Facebook CEO Mark Zuckerberg announced his company’s global operations are now wholly supported by renewable energy and that Facebook had reached net-zero emissions. Furthermore, Facebook said it had reduced its greenhouse gas emissions by 94% over the last three years.

Facebook’s journey started back in 2011 with a wind project in Iowa.

Big Tech going green

Facebook and other data-center-reliant tech companies use up as much as 1% of the world’s total energy, according to the International Energy Agency.

It’s not just Facebook. Big Tech companies like Apple, Microsoft and Google have set net-zero emissions targets for their global operations.

Last July, Apple unveiled a plan to become carbon neutral for its supply chain and products by 2030.

That means even Apple’s manufacturers in India will be moving to 100% renewable energy. In addition, the company’s partners have 8 GW of planned clean energy set to come online by 2030.

Last week, Apple also announced that its US $4.7 billion green bond spend helped generate 1.2 gigawatts of renewable energy. In February 2016 the company issued its first US $1.5 billion Green Bond. It followed it up with another round of $1 billion in June 2017.

In November 2019, the company issued its third set of Green Bonds and its first in Europe. The bonds came in at 1 billion euros each (totaling nearly US $2.2 billion). In fact, Apple’s global corporate operations are already carbon neutral.

“Apple is dedicated to protecting the planet we all share with solutions that are supporting the communities where we work,” said Lisa Jackson, Apple’s vice president of environment, policy and social initiatives. “We all have a responsibility to do everything we can to fight against the impacts of climate change, and our $4.7 billion investment of the proceeds from our Green Bond sales is an important driver in our efforts. Ultimately, clean power is good business.”

While turning green themselves, these companies are also hastening the transformation of entire electricity systems in many parts of the world.

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The Vedanta copper plant in India remains shut three years after local residents protested against pollution stemming from the plant’s operation.

That, however, has not fazed the Vedanta Group.

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Vedanta to set up new copper smelter

Vedanta now plans to set up yet another plant in the country. The proposed copper smelter plant will have a capacity of 500,000 tons per year.

copper smelter

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Vedanta Ltd, the subsidiary of Vedanta Resources, has called for expressions of interest from provincial governments in India regarding a new copper smelter unit.

A Vedanta spokesperson told the Business Standard India’s copper requirements will grow. Furthermore, the spokesperson emphasized ample supply of copper is critical for implementation of new-generation technologies.

Three years later

It’s been about three years since Vedanta’s Tamil Nadu smelter was shut down, causing it losses that are already running into millions of dollars.

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India

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A budgetary proposal by the Indian government to reduce steel duties has divided the Indian steel sector.

India proposes reduction in steel duties

In her 2021 budget speech presented in parliament earlier in the week, Finance Minister Nirmala Sitharaman proposed reducing customs duty on imports of semi-flat steel. She proposed cutting the duy for the steel, used to make ships, bridges, line pipes and other equipment, from 12.5% to 7.5%.

Furthermore, the customs duty on longs — used to make rails and wire rods — may also be reduced from the present 10% to 7.5%.

Another proposal called for revoking anti-dumping and countervailing duties on straight length bars and rods of alloy steel, high-speed steel of non-cobalt grade flat-rolled product of steel, plated or coated with an alloy of aluminum or zinc.

At least initially, the move could be interpreted as India opening its doors to cheaper steel and reducing the tax on shipments of the alloy amid surging prices at home.

The chief executives of some of global steelmakers such as JSW and Tata Steel have opined that this would not allow any increase of flow in these steel items. Meanwhile, others fear it will have a negative impact on the profitability of domestic players.

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India iron ore barge

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A chorus of protests against Indian iron-ore exports — with associations of sponge iron and steel-forgings manufacturers making common cause with the India Steel Association (ISA) — has brought pressure on ministers to ban exports of iron ore.

Of those exports, 90% goes to China.

The groups are protesting in a bid to support domestic steel mills from rising raw material costs.

Ministers have refrained from taking action, arguing they would rather the market decide when it makes sense to export and when to import.

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Iron ore export ban?

However, a ban hardly seems necessary.

A massive 30% export tax kicks in this quarter on the lower Fe grade material between 58 to 62%. That is expected to decimate exports this quarter, the Business Standard reports.

In an effort to improve supply, the authorities have taken action against underused mining leases.

According to the New Indian Express, production declined during 2020. Comparing the two years January to September 2019 to the same period in 2020, iron ore production totaled 110.95 million metric tons in 2019. Meanwhile, output reached 76.01 million metric tons in 2020, marking a 31.5% drop.

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The beginning of production at what is now Asia’s deepest offshore natural gas field will increase the share of natural gas India’s energy basket.

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India set to strengthen natural gas production

A few days ago, Reliance Industries Limited (RIL) and BP announced the start of production from the R Cluster, ultra-deepwater gas field in block KG D6 off the east coast of India. RIL and BP are developing three deepwater gas projects in block KG D6: R Cluster, Satellites Cluster and MJ –

Together, RIL said it expects the projects to meet over 15% of India’s natural gas demand by 2023.

What makes the find even more newsworthy is that it is located at a depth of more than 2,000 meters, making R Cluster the deepest offshore gas field in Asia.

Production ramp-up

By the end of next year it is expected to reach plateau gas production of about 12.9 million standard cubic meters per day (mmscmd), per MoneyControl.com.

These projects will utilize the existing hub infrastructure in KG D6 block. RIL is the operator of KG D6 with a 66.67% participating interest. BP holds a 33.33% participating interest.

R Cluster is about 60 kilometers from the existing KG D6 Control and Riser Platform (CRP).

Mukesh Ambani, chairman and managing director of Reliance Industries Limited, said in a press release that production from the natural gas field marked a “significant milestone” in India’s energy landscape for a cleaner and greener gas-based economy.

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China and India find themselves in some sort of a mini-race in the crude refining business.

(As readers of our Annual Outlook know, the oil sector is one of three key macroeconomic pillars we consider in our analysis of commodities markets, in addition to the Chinese economy and the strength of the U.S. dollar).

China races ahead in crude refining

China, though, is paces ahead of its neighbor. If all goes to plan, China could soon dethrone the present No. 1 refiner, the United States.

Bloomberg quoted the International Energy Agency (IEA), which said that perhaps by next year, China would dethrone the U.S. as the top refining country in the world.

This will be no small feat.

China may become No. 1 following the closure of some refineries in the U.S.

Steve Sawyer, director of refining at energy industry consultancy Facts Global Energy, told Bloomberg in an interview that, in the coming years, China would be putting out an additional million barrels a day, helping it overtake the U.S.

India aims to build crude refining capacity

While China goes about the crude refining business, its neighbor India has also thrown its hat in the ring.

For the last couple of years, India has made no bones of building its domestic refining capacity. The country has added some well-known international petroleum companies to its client list.

India planned to double its current capacity in the next 10 years. However, Prime Minister Narendra Modi wants things done faster.

At present, India’s refining capacity stands at 250 million tons, or a little more than 5 million barrels per day, based on a conversion factor of 7.33 barrels per metric ton of oil. Under an earlier plan, India sought to hike this to 450 million to 500 million tons over the next 10 years.

Now, Modi wants to do it even faster, accomplishing it within five years.

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India came in for considerable criticism over its reaction to the spread of the coronavirus pandemic in the first wave.

Locking down the economy almost overnight and trapping millions of migrant workers from returning home, only to then release them a week or two later to flood out into rural areas and spread the virus, was roundly condemned (both inside the country and out).

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Coronavirus pandemic in India

Since then, infections have been on a relentless rise. Infections reached a peak in mid-September of some 93,000 per day. That brought the total to some 9 million cases and deaths to nearly 130,000 (one of the highest totals in the world).

Rolling local containments and much more effective work at the city and community levels have gradually reduced infections. Infections are about half of what they were in late September, as this graph illustrates:

chart of coronavirus cases in India

Lacking the financial firepower of mature economies, the government has been unable to support the economy in the way many Western governments have done.

As a result, India’s GDP contraction has been brutal.

According to the Financial Times, gross domestic product contracted almost 24% year over year in the second quarter of 2020. In the third quarter, GDP fell by an additional 9%.

The decline puts the country into a technical recession for the first time in its history.

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India

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After a period of negative news following the COVID-19 pandemic, there’s finally some cheer for India’s steel industry, particularly related to Indian domestic steel demand.

Domestic steel demand has bounced back to pre-COVID levels. Automotive and white goods sector demand have driven the steel demand recovery.

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Indian domestic steel demand recovers

As per a report by financial firm Motilal Oswal, higher steel prices and lower coking coal prices ensured Indian primary steel producers’ margins remained strong. In addition, the report noted there were signs of domestic steel demand recovering gradually in the country.

The Motilal Oswal report also pointed out that India’s finished steel consumption, too, is recovering gradually. India’s finished steel consumption registered a drop of as much as 85% year over year in April 2020.

Chinese demand boosts Indian steel

What’s more, a renewed demand in the largest steel consuming market in China also boosted the bullish steel market in India.

Steel trade data by China shows demand remains strong there. China’s net steel exports declined to 10-year lows in September 2020. In addition, China saw a spurt in passenger car sales in September.

Because of these developments in China, its fallout was also seen in the Indian markets. Steel prices have also firmed up and have shown consistent increases over the last four months since July.

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India

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Some Indian experts are of the view that the U.S.’s newly imposed import tariff on aluminum sheet products, including on Indian aluminum sheet, will not affect Indian aluminum producers in a major way.

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U.S. slaps anti-dumping duty on Indian aluminum sheet, sheet from 17 other countries

Last Friday, the U.S. imposed fresh tariffs on U.S. $1.96 billion worth of aluminum sheet products from 18 countries, including India.

The U.S. imposed the duty after determining the goods were being dumped, according to U.S. Commerce Secretary Wilbur Ross.

“The Department’s aluminum sheet investigations constitute the broadest U.S. trade enforcement action in two decades,” Secretary of Commerce Wilbur Ross. “We look forward to receiving parties’ comments on the preliminary determinations that aluminum sheet imports from 18 countries have been dumped, and in some cases unfairly subsidized, into the U.S. market.”

Ross added tariffs were being immediately imposed even though the department’s reading was the dumping was preliminary.

“As a result of these decisions, Commerce will instruct U.S. Customs and Border Protection (CBP) to collect cash deposits from importers of common alloy aluminum sheet from the above-named countries based on the preliminary rates noted above,” the Department of Commerce said in a release announcing the preliminary determination.

In addition to India, the other countries on the list are: Brazil, Croatia, Egypt, Greece, Indonesia, Italy, Oman, Romania, Serbia, Slovenia, South Africa, South Korea, Spain, Taiwan and Turkey.

The U.S. petitioners in the investigation are the Aluminum Association Common Alloy Aluminum Sheet Trade Enforcement Working Group and its individual members.

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India

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India’s Commerce Ministry has launched an inquiry, based on a complaint by Indian steel players, to review the need to reimpose anti-dumping duties on certain steel products imported from at least seven countries, the New Indian Express reported.

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Reimposition of anti-dumping duties

A few months ago, India imposed duties on steel products imported from the U.S., China, Korea, European Union, South Africa, Taiwan and Thailand. With the duties, India aimed to safeguard Indian steel manufacturers from cheap imports.

However, the Commerce Ministry’s Directorate General of Trade Remedies (DGTR) launched a an anti-dumping probe. The investigation follows an application filed by Jindal Stainless Ltd, Jindal Stainless (Hisar) Ltd and Jindal Stainless Steelway Ltd. The “sunset” review covers imports of cold-rolled flat products of stainless steel, of width ranging from 600-1,250 mm from the seven countries.

Countries can impose tariffs on such dumped products to provide a level playing field for domestic manufacturers.

Dumping happens when a company or country exports an item at a price lower than the price of the one made in its domestic market. As such, dumping impacts the product price in the importing nation.

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