With the automotive market receiving 24 percent of all steel shipments in 2010, according to the American Iron and Steel Institute (AISI), good news in auto industry production and sales can generally be interpreted as good news for steel. Even better news for a sagging US economy is hearing that domestic car sales are improving, and that’s exactly what’s happened last month and in the first three months of 2011.

US light vehicle sales increased 17 percent in March 2011 from the previous year, and up 20 percent in the first three months of 2011, according to data released by Automotive News. That means a total of 1,246,668 vehicles sold last month, and 3,060,140 so far in 2011.

Ford sold 5674 more units than GM in March, upending its rival in monthly sales for the first time since 1998. However, GM still holds the lead over Ford with 592,546 total vehicles sold in the first three months of 2011 to Ford’s 495,508. Some of the biggest percentage increases in March belonged to Chrysler (up 31%), Nissan (27%) and Kia (37%). And although small cars had the best showing in terms of sales in March (up 32 percent to 192,879 units, according to the Automotive News Data Center’s segmentation), the Smart Car plummeted 37 percent to post the biggest loss of any brand last month.

But March’s good fortunes may not last. Not surprisingly, Toyota posted the biggest drop with a 6 percent loss for the month. Japanese operations have been hard-hit following the March 11 earthquake and tsunami. The official company line indicated that it’s too early to predict “location and duration of supply interruptions, noting that many of its parts are sourced in North America.

But some independent analysts and American dealers tell a different story. A Scotia Economics report, for example, refutes Toyota’s claim above and asserts that global auto parts shortages will be the main reason for reduced production and, therefore, sales. “Japan is the world’s second-largest auto-parts exporter behind Germany, and hundreds of parts suppliers are located in northeastern Japan, near the epicenter of the earthquake, the report states.

Since 2009, exports of Japanese auto parts factored heavily into US and other markets. US manufacturers will have to make up the difference, very likely through mid-summer. Source: Scotiabank Group

Eric Vates, general manager of a Chicago-area Mazda dealership, told Crain’s Chicago Business in a recent article, “Once you get into May and June, you’ll have dealers that are out of inventory or nearly out of inventory. A spokesman for Chicago Automobile Trade Association told Crain’s that, indeed, Japanese suppliers are telling US sellers to expect fewer cars in May.

What will this mean for steel? It could, in short, go either way. On the one hand, lower production in the short term could mean less steel demand, as auto manufacturers’ capacities are down; so steel prices would marginally follow. But on the other hand, in the longer term, if auto dealers’ inventories get decimated this summer, increased consumer demand will follow (if first-quarter sales are any indication), and once Japan’s parts suppliers and automakers get back online, they’ll be hungry for imported steel. Of course, let’s not forget emerging markets’ need for speed. Although China’s auto sales are not growing as quickly as they were a year ago, their auto market is still dominant.

According to a recent AISI report, 63 percent of the average vehicle is made of steel, with 57 percent of that being advanced high-strength steel (AHSS). With the auto sector as an important driver, steel demand — especially for AHSS, with more advanced grades on the way — in the second half of this year could certainly be something to watch.

–Taras Berezowsky

When I saw Simon Hunt was being interviewed by Mineweb’s Geoff Candy, I couldn’t resist checking out the podcast. Simon Hunt has been an active market expert for longer than most people have been out of short pants and there isn’t much in the market he hasn’t seen before.

Candy’s interview ranged across various issues related to copper, the first being the level of real verses apparent copper demand in Asia, an issue Hunt has spoken out on in the past. Having just returned from China, Hunt’s belief that much of the copper consumption in recent years has been for financial investment rather than industrial consumption is proving correct. The acceptance of this general point — that vast sums of money have gone into essentially commodity and stock market speculation rather than capital investment — is even being acknowledged at government level, he said, and one only has to look at inventory flows to realize that the copper market (when financial buying is removed) is in surplus. Whether that is correct is difficult to say, but certainly LME inventory levels have been on the rise as this graph from Kitco shows, suggesting that as Chinese buying has cooled the world has more copper than it can consume:

Source: Kitco

According to Standard Bank, on-warrant copper stocks in Asian warehouses are now 145,075 tons, the highest they have been in well over a decade. In Hunt’s view, there is a bubble in copper and the bubble is probably going to get bigger before it bursts. You only have to go back to see what happened; last time we had anything approaching this sort of non-industry involvement in copper, he said, like the late 1970s and early 1980s to realize what the outcome will be.

The second topic the pair covered was the likely impact reconstruction will have on copper consumption following the Japanese earthquake and tsunami. Hunt’s position is that expectations around the increase in demand and prices created by reconstruction may be overdone. Firstly, he questions to what extent many of the elderly residents will want to return to coastal locations having lived through one major tsunami. Secondly he rightly points out a huge amount of copper scrap sitting in the waste of devastated towns, which will be a ready source of raw material in preference to imports of refined metal or concentrates. And third, he believes Japan will use the reconstruction as an opportunity to introduce new technologies, possibly with government funding, that won’t be particularly favorable to copper; such as high-temperature super conductors, aluminum wiring in appliances and particularly in air conditioners, the use of aluminum for inner groove tubes rather than copper, and so on. Taken in total, even if each of these factors is only partially realized, the effect in totality could be significantly lower additional copper demand than anticipated.

In conclusion, asked what his opinion was on metal prices over the next two to five years, Hunt said commodities in general will be very volatile over the next two years, but from sometime towards the end of this year until the end of 2012 we are going to see some pretty parabolic rises. Following that, on our economic profile, we are going to have another credit bust and therefore a number of years of deflation and recession and that’s when commodity prices will collapse. Bear in mind what we saw in the early to mid 1980s the voice of experience? Let’s wait and see.

–Stuart Burns

Tin has been one of the wonder boys of recent months, powering up to over $32,000 per ton in the early part of the year, falling back briefly to $28,000 in March and then forging back up to over $31,000 while other superstars like copper have struggled.

Source: LME

So what on earth are tin buyers meant to make of this — and can they expect prices to continue to rise this year? Many buyers are exposed to tin prices second-hand, by which I mean they consume tin plate where they are exposed to both steel and tin fluctuations and prices change annually or quarterly, not weekly or even monthly. Others, like solder consumers in the electronics industry, face price rises again, only periodically adjusted on a trailing average. The impact of recent price gains has yet to be felt and although consumers may have prudently been stockpiling excess inventory metal as they saw the spot price rise, sooner or later — probably sooner — revised higher prices will feed through.

The bulls would have it that tin prices have further to rise. Lars Steffensen, managing partner at Ebullio, told the Reuters Global Mining and Steel Summit that he listed tin as his hottest metal for higher prices, above copper, lead and zinc. “I don’t think (aluminum) is going to double from here, whereas I think there is a very good chance that tin could do, he is quoted as saying by Reuters. In a separate and earlier Reuters article he is again quoted as saying the metal could reach $50,000 a ton. “There is going to be less and less available. People will have to pay higher prices,” he added. “On the supply side you have output problems, (while) consumption is strong. On the supply side, he is referring to the two top producers China and Indonesia. China is a net importer even though the country is the world’s largest producer, so domestic production has failed to keep pace with rising demand while Indonesia’s PT Timah, the world’s biggest integrated tin miner, shipped only 40,413 tons of refined metal in 2010 down from 45,086 tons in 2009. Production has been hampered by bad weather, particularly heavy rains and a long running crackdown on illegal mining.

Production has little chance of rising from current levels in the next few years, new resources are limited and it will take some years to bring significant additional production online. So the main hope in capping prices is a slowdown in demand. So far, only the power problems following Japan’s earthquake and tsunami are expected to have any significant impact as it temporarily slows domestic electronics production and consumption. So far, China has not reported any slowdown due to the disaster, but time will tell if any meaningful disruption to the component supply chain hinders tin solder demand over coming months.

The only significant block to higher prices, apart from a global or at least Asian slowdown in demand, is a dropoff in investor appetite for the metal. Exchange open interest on the number of outstanding contracts on LME tin futures has risen to 20,795 lots, or 103,975 tons, from 15,992, or 79,960 tons, in early September when the latest price surge started. There are commodity trading funds and hedge funds that are sitting there long, and which will want to sell at some point, and their sales volumes are not going to be absorbed by the market in one go. The main risk to the downside is that China slows under the double drivers of Japanese supply and demand disruption and over-zealous Chinese domestic credit tightening. If those investors see exchange-traded stocks rising or import figures falling, there is the chance they will exit long positions and we could see a significant price correction to the downside. On the balance of evidence, however, it is not likely to be long lived.

–Stuart Burns

As the events in Japan have unfolded, the commodity markets have headed south as investors have taken fright that the world’s biggest importer of food commodities, largest importer of refined aluminum and third-largest importer of copper ores will go through a dramatic drop in demand according to the Financial Times.

Source: FT

Stock markets have been sold off too, as fears that a significant drop in GDP growth in the world’s third-largest economy will result in lower demand. Reuters explained that stagnant industrial activity and power blackouts that have disrupted industrial production and halted production at copper smelters, automotive companies and refineries are likely to erode demand. Power cuts have halted operations at Japan’s top copper smelter, Pan Pacific Copper Co’s Hitachi, as well as No. 3 Mitsubishi Materials Corp’s Onahama copper smelter. China imports ores and exports refined copper, producing some 7 percent of global output. Two zinc smelters have also been shut for checks. Steel production has been affected and electronics firms have had to shut down or are on reduced output. No wonder commodity markets have taken a tumble, but how justified are they in their reaction? Of course we can’t see what may yet unfold at the nuclear facilities; a Chernobyl-type disaster would have far more serious consequences, but if the Japanese power company is able to contain the six at-risk reactors, what are the likely scenarios for commodities six months from now?

In the short term, the position will be disruptive, focusing just on metals. Palladium demand will be down as automotive is hit, but medium term it will recover, as will prices. Physical copper will be in short supply as Japan is a major producer (which should be supportive for copper at current levels), longer term copper will benefit from reconstruction investment and so will prices. In the short term, aluminum and tin will most likely be hit the most — Japan is a big importer of both, but as electronics production recovers and reconstruction takes hold, both metals will recover. Christen Tuxen, an analyst at Danske, singles out aluminum and steel to be the most likely to benefit next year from large-scale infrastructure demand.

Asia is going to be disproportionately affected, both in the short and longer term. China, for example, is the largest source of Japan’s imports and the second or third (depending on how you measure it) largest destination of exports. Many of China’s technology firms import Japanese-made components for assembly in finished products that are eventually re-exported to Europe or the US. This inter-regional trade is massive and Japan is a key part, particularly for higher-technology products. Imports from Japan to China totaled $176.8 billion last year, while exports from China to Japan were $121.2 billion. On the plus side, China and South Korea will no doubt step up steel production to meet any loss from Japan or should domestic production become diverted for infrastructure reconstruction in the next couple of years.

Broadly speaking, while the financial markets have taken a beating, the reality is the investment that will result is likely to cause a boost in demand 12-24 months out, driving prices back up. For buyers it could be a case of short-term gain, long-term pain.

–Stuart Burns

Japan consumes about 8 to 12 percent of the world’s uranium supply, depending on which source you reference. Of course, nearly a dozen of the country’s 55 nuclear plants is not consuming any uranium post-tsunami; instead, engineers are hastily employing methods from improvised containment to cooling fuel rods with seawater to prevent any sort of radioactive fallout. You may even think that because several governments are talking tough on curbing nuclear power, uranium might be in the toilet for good.

But according to several sources, uranium, although taking a hit in spot prices and being unloaded by the ton by investors/speculators worldwide, has some pretty solid fundamentals behind it (we’ll get into that shortly.) Just as the mainstream press spends lead-headline real estate on the looming nuclear threat while burying the mounting non-radiation-related death toll, market watchers are seizing upon the plummeting uranium spot price instead of taking the long view.

One blogger, Agustino Fontevecchia, has been at the forefront of uranium coverage, writing for Forbes. He details a number of companies (such as uranium miners and energy production suppliers), ETFs and other funds that are losing out because of the tsunami, with short-term valuations plunging. For example, Saskatchewan-based Cameco, Canada’s biggest producer and one of the world’s largest, was down 13 to 15 percent on Monday. (In a Globe and Mail article, Greg Barnes, an analyst at TD Securities, Inc., said “in a worst-case scenario, the company could lose 10 per cent of its sales volume in 2011 because of the Japanese problems.) Uranium, mind you, is not traded on any exchanges. Fontevecchia, rather cheekily, throws this out there: “In the long run, though, the prospects for the industry look sweet.   Buying opportunity?

Cameco, among others, is not downcast about the future. Why? They know that the likes of India, South Korea, and especially China, need to feed their nuclear power hunger with uranium and will continue to do so, regardless of the frightening accounts from Japan. Cameco CEO Jerry Grandey said Monday that the stock markets are being “driven largely by emotion and that Chinese and Indian demand should keep long-term demand up. Demand should outpace supply ” at least through 2012, Desjardins Securities analyst John Redstone told the Globe and Mail.

With Japan’s market demand for uranium decreasing 20-25 percent in recent days, UxC’s VP for Uranium Nick Carter told Forbes’ Fontevecchia that China is, in effect, more than ready to make up the difference. “China, which produces only 2 or 2.5 million pounds [of uranium annually] is looking to take its production to 70 or 80 gigawatts (GW) in the next ten years, from about 10 GWs today, even if they cut their forecasts, they will still have to import a lot, Carter is quoted as saying.

Indeed, as MetalMiner reported several months ago, this means China would be quadrupling its uranium consumption to 50 million to 60 million pounds a year, compared with annual global demand of about 190 million pounds at the time of the post. (China already has long-term contracts with Cameco and Areva, another Top-10 producer.) The Chinese had embarked on an ambitious and aggressive buying spree at prices some 30 percent over current spot and twice spot prices of a year ago, tying up long-term supply offtake agreements and joint ventures. Ralph Profiti, analyst at Credit Suisse in Toronto, believed China was getting ahead of other consumers and, as with copper and non-ferrous metals, was building up a strategic stockpile before the Americans, Japan or Korea needed to restock before the New Year. The latest from Reuters is that China has a total of 187 reactors currently being built or in the planning stages.

Will Chinese power plants be as safe as possible? That remains to be seen. But the intractable environmental problems the country faces from rapid growth, among other things, will force China to continue planning for nuclear power expansion.

But don’t take it from us take it from the horse’s mouth. As Bloomberg reported, China National Nuclear Corp. President Sun Qin said in an interview in Beijing after attending the National People’s Congress that “the pace of the country’s nuclear development won’t be affected by events in Japan.

–Taras Berezowsky

As MetalMiner continues looking into the effect the Japan earthquake and ensuing tsunami have on the metals supply chain, the nuclear power question seems to be taking a considerable portion of aftermath news. While the natural disaster spurs nuclear worries in Japan, especially in the wake of the Fukushima Daiichi nuclear power station failures, the reporting coming out of it paints a picture of imminent radioactive catastrophe. But does the tsunami make the case that nuclear power should be curtailed, or even shelved entirely, as a global energy source?

According to an enterprising Reuters report on the subject, the news organization quotes an executive at state-run utility Korea Electric Power Corporation (KEPCO) as saying, “The nuclear power industry is likely to shrink due to Japan’s nuclear accident¦Rising opposition is seen in developed countries, although developing countries may see less opposition due to their shortage of power unless they reside in earthquake zones.

The last phrase strikes us as the particularly logical if your country and/or your existing or planned nuclear campuses are near earthquake prone-zones, fault lines, or near the ocean shores, then yes, you should plan accordingly. According to Reuters, Taiwan, another island nation in the Pacific arena, mentioned that its state-run energy company Taipower is looking into cutting its nuclear power output. Although Japan’s famously advanced (read: sturdier than most) infrastructure helped prevent even more catastrophic results from the earthquake which seems rather unfathomable, given the unequivocally horrible aftermath — the entire country remains in perpetual danger of tsunamis because of their geographical placement. Admittedly, Japan wasn’t about to stop its path to world’s No. 3 economy due to its geologically volatile island location, just as no one could convince New Orleans not to rebuild because of its prime address in Hurricane Alley.

But do Europe and the US really need to halt or reverse course entirely on nuclear power development and production? The Reuters article cites that Switzerland, Germany and the US all indicated uncertainty in the nuclear sector. Swiss Energy Minister Doris Leuthard “suspended the approvals process for three nuclear power stations for safety standards to be revisited, while German Foreign Minister Guido Westerwelle said that “a government decision to extend the life of the country’s nuclear power stations could be suspended following the crisis in Japan. Even US Senator Joe Lieberman weighed in, saying we should “put the brakes on domestic power plants until the “impact of the Japanese disasters “became clear.

The UK’s Guardian newspaper quoted Professor Gerry Thomas, chair of molecular pathology at Imperial College London, as playing it much cooler than American media outlets when it came to the imminent dangers posed by the reactors. “”One thing to note is that there has not yet been a significant release of radiation from this nuclear plant – the reactor core is currently still intact,” he had said, according to the Guardian. “There has been very little release of radiation and there is unlikely to be a significant release. My advice would be not to worry¦I am afraid there is far too much scaremongering! Granted, Professor Thomas was responding to citizens worried about personal effects from radiation, but this lesson could apply to the global especially American media.

The reality is nuclear power has a relatively steady safety track record over the years when compared with other energy sources. These political heads’ comments likely only serve the stock price rises of green energy companies; of course we all need to diversify our energy production sources, but how about we focus on the task at hand, help Japan, put out the fires, and then move forward with green?  The US and Europe don’t seem to be faced with imminent danger when it comes to regular earthquake activity that could trigger massive tsunamis. Sure, the US probably shouldn’t build more nuclear reactors on the California/Oregon/Washington coasts, and should re-evaluate/renew safety procedures in case of future tsunamis but perhaps all-out nuclear freeze should be a last resort.

Human error and shoddy development and maintenance will always exist no one need to look further than the Chernobyl debacle, which is still fresh in many people’s minds nearly a quarter century on. (The 25th anniversary, on April 26, is nearly upon us.) But scaremongering in the fresh face of disaster might not serve anybody well hype does not equal tangible action.

–Taras Berezowsky

How should we view the merger of Nippon Steel, Japan’s largest steel producer, and No. 3 player Sumitomo Metal Industries? The two steel companies ranked 6th and 23rd respectively, according to an Asahi.com article, and would become Japan’s largest when merged and the world’s number second largest behind ArcelorMittal, but would still only produce half AM’s 100 million-ton capacity, according to an article in The Australian. Nevertheless, one of the aims expressed to the media is a consolidated entity would be able to better compete for and negotiate with raw material suppliers such as iron ore producers BHP, Rio and Vale. One has to question just how realistic that is given their high level of reliance on such suppliers and the failure of ArcelorMittal to fare any better even with twice the size. Indeed, Nippon Steel and Sumitomo Metal have been collaborating closely for much of the last decade, if they hadn’t found a way to pool their purchasing and have an impact on their biggest input cost by now then a merger won’t make any difference.

No, this probably has more to do with competing in sales markets. Japanese transplants in Asia and elsewhere traditionally bought Japanese steel to make automobiles, consumer goods and for major projects such as oil refineries. But in recent years companies like Nissan Motor Co., which shifted manufacturing of its mainstay small car March to Thailand last summer, has been looking to South Korean and Indian makers of sheet steel, according to Asahi. Toyota Motor Corp. uses steel produced by domestic producer Tata Steel Ltd. for its cars made in India. “Steel produced by Chinese, South Korean and Indian makers is by far cheaper. We don’t need to rely on Japanese steel,” a senior official at a major Japanese carmaker is quoted as saying. To compete with that, Nippon and Sumitomo need to invest in production facilities in those countries, and size may help spread those costs over a greater sales volume and avoid duplication of investments as may occur between competing firms.

Japan’s Fair Trade Commission (FTC) must bestow approval, which could take some four months. Nippon Steel’s move to increase its stake in Nisshin Steel Co. about a year ago was squashed by the FTC, which warned the company that the move could interfere with domestic competition because the two companies’ combined stainless steel share in the Japanese market would rise. Neither Nippon Steel nor Sumitomo Metal ranks higher than 10th in terms of global stainless steel production, suggesting that the merger will have little impact internationally. However within their areas of expertise, at least domestically, each firm does have a significant market share. Nippon Steel is strong in producing high tensile steel for autos and electromagnetic steel plates used in household appliances. Sumitomo is known for its steel pipes, particularly those used in oil wells. So far though, other Japanese steel producers have raised no objections; indeed some consumers such as Mazda have welcomed the proposal, saying it would improve the merged firms’ ability to supply to them in overseas markets.

The level of mergers in Japanese industrials has declined steadily over the last decade as this graph from the FT shows:

Source: The Financial Times

As with the wider Japanese industrial landscape, so too it is true for the steel makers, resulting in a growing loss of competitiveness and some would argue marginalization of Japanese producers compared to South Korean, Chinese and Indian competitors.

The steps being taken by Japanese steel producers are behind the curve compared to many. Significant consolidation occurred in the USA and Europe during the 90s and early part of the last decade. Both Japan and China are arguably ripe for consolidation in this decade. We have little to fear and something to gain from a stronger Japanese steel industry; a merged and more cohesive Chinese steel industry may be a different story all together.

–Stuart Burns

MetalMiner and its sister site, Spend Matters, along with Nucor, will host a live simulcast, International Trade Breaking Point on March 1, 2011. If your company sources products from overseas, you will not want to miss this half-day event:

Register for the live simulcast today!

You may have seen some recent press regarding reports that a Toyota supplier is developing an electric motor for use in the Prius and similar hybrids that does not need Rare Earth Elements (REE) in the magnets. A Toyota Prius electric motor currently uses 1 kg (2.2 lb) of neodymium plus dysporium, and yet supplies are increasing in price and decreasing in availability after China (the source of 95 percent of the world’s REE according to an autoevolution blog) capped supplies this year to 4,500 tons. A Bloomberg article adds further detail: “China’s government cut export quotas for the first half of 2011 by 35 percent last month which in turn followed a 72% reduction in the second half of 2010, the paper said.

The Toyota supplier, Aisen Seiko Co., is Japan’s biggest manufacturer of transmissions, with 65 percent of their output going to Toyota or their subsidiaries, and so understands the demands of the automotive industry intimately. The firm is apparently drawing on research done by New Energy and Industrial Technology Development Organization (NEDO), which, jointly with Hokkaido University, is reported to have developed a ferrite iron-based motor that by careful positioning of the magnets avoids the performance-enhancing rare earth elements in the alloy. However, no comparable performance figures are quoted in the reports and it seems doubtful from the previous work if a ferrite motor is going to be pound-for-pound as effective or efficient as a rare earth-enhanced motor.

If successful, the project holds out the enthralling promise of electric motors in a host of applications that do not need REE. After all the fuss over scarcity and the need for funding of supply options outside of China, wouldn’t that be a turn up for the books. Unfortunately, we are still some way from weaning ourselves off REE, even if this particular project achieves some success. Automotive electric motors, just like about every other electronic component in our everyday lives, are getting smaller and smaller at the same time as increasing in power. Conventional theory has said the ferrite motor may achieve a similar result but is likely to be larger and heavier than its REE equivalent. However, a report last year on research done by Hitachi suggests the progress they and others like Daikin Industries and Osaka Prefecture are already experiencing is bearing fruit. In an article in Techeye.net, both organizations are reported to have made progress with motors of up to 5 kw performing with very similar results to REE motors, but using ferric oxide. Hitachi is starting to use these in place of REE motors in air conditioners and is working on developing larger 20 kw versions.   According to the article, hybrid car motors are required to produce some 50 kw of power so Hitachi’s development has some way to go, but suggests that there may be promise in the approach.

If electric motors can be made without REE, what about other applications?   For some there may really be no alternative to REE, but this research suggests that we may not be as totally reliant on REE as we thought and good old R&D may yet reduce our dependence on China’s dwindling rare earth supply.

–Stuart Burns

MetalMiner and its sister site, Spend Matters, along with Nucor, will host a live simulcast, International Trade Breaking Point on March 1, 2011. If your company sources products from overseas, you will not want to miss this half-day event:

Register for the live simulcast today!

We’ve written extensively about why certain nations (ahem, China in particular) conveniently seem to keep “forgetting to follow WTO-mandated rules see here and here including the United States. The US is by no means an innocent when it comes to playing the trade game to their advantage, as is the case with the practice called “zeroing.

Zeroing has been used exclusively by the US (none of the other 152 WTO members do this) to bolster their anti-dumping claims and protect trade interests, notably in the steel sector. (See Lisa’s coffee cup-and-Japan example now, now, keep your minds out of the gutter.) Essentially, zeroing happens when, in calculating import prices, the US simply tosses out or “zeroes the instances in which the exporters’ domestic price is lower than the domestic US price, creating a much larger dumping margin, and giving them quite a skewed advantage, many say.

As we’ve previously reported, the WTO called the US out on this in May 2009, ruling against the practice and basically issuing a “cease and desist order. From then on, zeroing was disallowed on a new case basis, but any actions taken on already existent cases were much murkier. (US courts supported the practice.) So the US technically “stopped zeroing, while appealing the ruling. Later that year, they lost the appeal. So, case closed, right?

Apparently not. Other reports indicated the US had stopped zeroing back in December 2006, just before an initial WTO ruling on the issue in 2007. But Bloomberg recently reported that the US Commerce Department just now “proposed ending the way it calculates dumping duties after Japan, the European Union and Thailand said their exports were being penalized. (The steel case with Japan has been ongoing.)

“ËœWhile it has taken a very long time, the Commerce Department has finally acted to remove a serious distortion from antidumping calculations,’ Lewis Leibowitz, a lawyer at Hogan Lovells in Washington who represents U.S. companies that use imported products, said in a statement,’ according to the article.

So what’s the deal? Four years of ambiguity? When did the US actually stop zeroing? Or has it stopped at all? And how long does it really take to comply with WTO laws? Is the WTO effective, then? As the US flails to keep up in the globalized market, it clearly has a hard time letting go of some “tricks of trade that it would just as easily accuse others of employing.

Tell us what you think.

MetalMiner and its sister site, Spend Matters, along with Nucor, will host a live simulcast, International Trade Breaking Point on March 1, 2011. If your company sources products from overseas, you will not want to miss this half-day event:

Register for the live simulcast today!

–Taras Berezowsky

Part One: How Green Is My Supply Chain?

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Environment, Green

The concept of climate change and the need to reduce carbon emissions is far from widely accepted in the U.S., but viewpoints are beginning to change, largely due to customer demand. Japan and the European Union were early converts to the argument that we are changing our planet’s weather patterns, and much of the current legislation is appearing in these countries. Given the trend, though, the U.S. will not be far behind.

We have all heard a great deal about carbon emissions and the ways both individuals and companies can reduce electricity usage and save on transportation. That’s the easy part. The expenditure is simple to quantify, and the carbon emissions are easy to measure. The much larger challenge for companies is measuring the carbon footprint of a product, defined here as the total set of greenhouse gas emissions caused by the production of one unit of a product. This implies knowledge of the carbon emissions released at each stage of the supply chain and production as well as the transportation of all the raw materials and components. To offer an example, the Carbon Trust, an independent company funded by the UK government, recently illustrated the components that create the carbon footprint of a can of cola.

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