The Latest Steel Supply and Aluminium Products News
As respected steel suppliers UK it’s our job to keep our finger on the pulse of the planet’s metal supplier news. This time around we take a look at the emerging super-supplier of steel, namely India, and explore China’s booming aluminium export scene.
India on target to become the world’s biggest steel supplier
India’s steel supply sector is booming as record breaking local demand meets higher exports than ever. It It looks like the country’s steel output leapt a full 11% in March. They also became a net exporter for the first time in three years, with steel shipments totalling an eye-watering 8.2 million tons.
The news means India is predicted to overtake Japan as the world’s second-biggest provider within two years, led by JSW Steel, Steel Authority of India and Tata, all of which beat their previous production records throughout a particularly exciting 2016.
India’s steel output is predicted to reach 103 million tons this year, 110 million in 2018, a massive 118 million by 2019, and 146 million by 2022, as revealed by the Australian Department of Industry, Innovation and Science.
Confident US steel makers apply huge price hikes
North American steel sector members raised their prices fast when new tariffs affecting overseas competitors came in last year. But they moved too fast for some buyers, who felt alienated by the hike. As a result there’s a real risk of a steel market rebound.
Some US steel producers have raised their prices by as much as 50% on the most popular types of steel, leading users to defect in search of better priced alternatives from countries not affected by the tariffs. Some domestic US suppliers have increased their steel prices seven times since last autumn, boosting the price per ton by at least $180.
The US government is at the heart of the troubles, having imposed onerous duties on a host of overseas steel producers who they felt were either benefiting from unfair state support or setting prices way below production costs. Some of the tariffs on Chinese producers, for example, have exceeded 500%.
A dramatic increase in steel production capacity outside the US has seriously affected the domestic market over the Atlantic. The resulting weaker demand in overseas markets led steel makers to maintain production by increasing exports to the US, at the same time slashing steel prices to reel customers in. This led to domestic steel producers idling their plants and laying people off, but the tariffs helped American producers bounce back. Since then US steel producers have leveraged higher prices, which they feel are justified.
The result of all this is that demand is reasonable but not strong enough to support any more dramatic price hikes. Plenty of experts expect demand to fall again later in 2017. On the other hand steel imports were up 2% on January and February 2016, perhaps not so surprising when plenty of countries selling the metal into the US don’t apply tariffs. In Vietnam, for instance, imports rocketed over 300% in 2016.
Trump is determined to make US products more competitive in the global market. This could also prove tricky, since passing on higher domestic costs doesn’t wash when companies abroad can access steeply- discounted steel with ease.
Declining aluminium stockpiles set to benefit Chinese producers
Aluminium producers in China are predicted to increase exports through 2017 as the world’s manufacturing climate improves and stockpiles reduce. Experts say bigger exports of semi-manufactured aluminium could drive London Metal Exchange prices down from their current high.
China currently produces more than half the world’s aluminium, but prices have fallen around the globe and as a result smelters in other countries have already started to slow production. In the meantime, in the West, aluminium stocks are drawing down, with stockpiles outside China almost halving to 8 million tonnes, an amount predicted to last around three months. At the same time demand beat output in 2016 and is predicted to do the same in 2017.
In March 2017 Chinese aluminium producers were ordered to cut their production by almost a third to reduce the use of coal and mitigate chronic levels of air pollution. Meanwhile Trump is busy cutting down his country’s trade deficit with China, and rumour has it he is also thinking about making investigations into some products, fired up by recent World Trade Organisation complaints about Chinese aluminium subsidies in general, and foil exports in particular.
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