Demand for thecnical ceramics has remained relatively stable over the last few years, but increasingly detailed customer specifications for these materials mean thar manufacturers are having to become more flecible in their product designs. Kasia Patel, North American Editor, examines some of the new developments in manufacturing techniques.
Demand for thecnical ceramics has remained relatively stable over the last few years, but increasingly detailed customer specifications for these materials mean thar manufacturers are having to become more flecible in their product designs. Kasia Patel, North American Editor, examines some of the new developments in manufacturing techniques. More information. Download .PDFVer entrada completa
What you need to know about the country’s industry. With steel plants from Wales to Australia threatened with closure, China has been accused of destroying other nations’ steel profits by propping up its domestic industry. Below is what you need to know about the country’s steel sector. What is China’s role in the global …Ver entrada completa
China’s glut of refractory products and subsequent dumping in export markets is subduing India’s growth potential, with domestic players facing trading pressure as buyers opt for cheaper Chinese material. Despite the Indian steel industry registering strong growth in recent years, refractories suppliers continue to bear the brunt of low-cost imports of Chinese material, leading to …Ver entrada completa
Dimmer forecast comes as world’s finance officials prepare to meet WASHINGTON—The world economy is increasingly at risk of stalling, the International Monetary Fund warned Tuesday as it once again cut its forecast for global growth prospects. The IMF said it was forced to downgrade its growth forecast for this year to 3.2%, down by 0.2 …Ver entrada completa
The euro remains in control against the British pound as the UK currency continues to absorb heavy risk discounting ahead of the EU referendum which is now three months away. There are however suggestions that the pound’s sell-off agianst the euro is potentially overdone at this stage and that the euro should at some …Ver entrada completa
What you need to know about the country’s industry.
With steel plants from Wales to Australia threatened with closure, China has been accused of destroying other nations’ steel profits by propping up its domestic industry. Below is what you need to know about the country’s steel sector.
What is China’s role in the global steel industry?
China is both the largest producer and consumer of the metal. Of its crude steel output of 803m tonnes — half the world total last year, according to the World Steel Association — 112m tonnes was exported, according to figures from the China Iron and Steel Association.
China’s construction boom during its years of breakneck economic growth drove the global steel industry. Its 2014 consumption was more than six times higher than that of the US, the next biggest consumer.
Now China’s economy is slowing and turning away from infrastructure, its demand for steel has weakened, contributing to steel prices worldwide slumping to a 10-year low.
How many people are affected?
Steel workers around the world are suffering under the global steel downturn. The Chinese government has announced about half a million steel workers will be made redundant as a result of reforms to “overcapacity” sectors over the next five years.
What are the accusations being levelled against China?
China has been accused of granting unfair subsidies to its steel sector, making its output cheaper than that of competitors, and of “dumping” its steel on world markets.
What kind of subsidies does China grant its steel sector?
China subsidises its energy sector, which passes on lower prices to power-hungry steel producers.
Subsidies are also given directly to companies: Baotou Iron and Steel Group, one of China’s biggest producers, took Rmb580m ($89m) in government subsidies in 2015, according to Tomas Gutierrez, an analyst at Kallanish Commodities.
The amount varies by company. Hebei Iron & Steel Group, the world’s second-largest steel producer by volume, reported industry-specific government subsidies of Rmb7.19m in its 2014 annual report, and additional government subsidies of almost Rmb50m, of which the largest portion was labelled as “environmental awards”.
Taken together, these subsidies came to just 0.1 per cent of Hebei Iron & Steel’s Rmb50bn revenues.
China also imposes steel export tariffs. For example, steel billets (long bars) face export taxes of 20 per cent. These tariffs were cut at the start of this year, in a move some commentators decried as encouraging steel exports.
What is dumping?
Dumping is defined by the World Trade Organisation as a situation in which a good is sold internationally for less than its “normal” value.
How to determine that value is highly controversial.
WTO member countries agree to abide by a general schedule of caps on import tariffs, except in the case of “anti-dumping” duties.
Can countries continue to impose anti-dumping duties on China?
China is pushing to be granted “market economy” status by the WTO in December, when it marks its 15th anniversary in the world trade body. That status – currently the subject of a standoff between Washington and Beijing -would make it far more difficult for fellow WTO members to impose anti-dumping tariffs on China.
To prove that a “market economy” is dumping goods, the usual method is to show that the price of the good sold domestically, or the benchmark price, is higher than the export price. China’s domestic steel price is not used as a benchmark, because of its non-market economy status. Instead, benchmarks are compiled using comparable countries, whose domestic prices tend to be higher than China’s.
However, once China receives “market economy” status, the domestic price will be the default comparison used to determine dumping. This would make it harder to prove dumping, so EU steel and solar industry groups have lobbied against China being granted market economy status. But the Ifo Institute for Economic Research, which has produced a report advising the European parliament on China’s WTO status, says the issue has been “partly exaggerated by European lobby groups”, and that the increase in imports from China following the granting of market economy status would not be as dramatic as sometimes claimed.
China’s glut of refractory products and subsequent dumping in export markets is subduing India’s growth potential, with domestic players facing trading pressure as buyers opt for cheaper Chinese material.
Despite the Indian steel industry registering strong growth in recent years, refractories suppliers continue to bear the brunt of low-cost imports of Chinese material, leading to inventory stockpiles.
This is contributing further to overcapacity in the sector, which is currently estimated at about 30%.
Refractories manufacturers attending the International Refractories Congress (IREFCON) 2016 conference in Hydrabad, India, today, highlighted that, with the slowing global economy impacting commodities demand, the industry is seeking low-cost substitutes and supply sources, an area in which China is aggressively pursuing more market share.
“Not only refractory raw materials, but even with finished steel brick linings into India, after including all the logistics costs associated, it is Indian rupee (INR) 12-15/kg ($0.17-0.22*) cheaper [to import from China] than buying from domestic suppliers,” a representative from OCL India Ltd told IM.
The spokesperson added that there is a gap of around INR 19,000/tonne ($280/tonne) in prices between steel produced in India and imported material.
Some of the refractories manufacturers also contested the quality of domestically produced material, saying that Indian ores do not meet the standards required by the steel industry, while Chinese material is comparatively better for use in downstream applications.
“We have been sourcing alumina from China and the grades are better than domestic suppliers, with cheaper prices as an added bonus, allowing us to supply high quality refractory products at cheaper prices to our customers,” Barundeb Chatterjee, a manager at National Refractory Corp., told IM.
A delegate representing India-based Ashapura Group, dismissed this suggestion, however, telling IM that the grades produced by Ashapura are completely different to the ones produced in China, which has allowed the company to retain its profits, albeit at lower levels.
Several producers also commented on China’s currency devaluation, noting that it had benefitted the country’s export market, with a number of industry players anticipating a further drop of 15% in the value of the Chinese renminbi by the second quarter of 2016 – putting further pressure on existing trades.
Nevertheless, Dharmesh Joshi, associate vice president at Eirich India, remained positive in his outlook, telling IM that the issue of Chinese exports has been brought to the attention of the central government and an anti-dumping duty is likely to be introduced against low-cost imports.
However, Indian producers remain concerned that, should the situation continue, there will be no level playing field for domestic companies.
Dimmer forecast comes as world’s finance officials prepare to meet
WASHINGTON—The world economy is increasingly at risk of stalling, the International Monetary Fund warned Tuesday as it once again cut its forecast for global growth prospects.
The IMF said it was forced to downgrade its growth forecast for this year to 3.2%, down by 0.2 percentage point from its projection issued in January. China’s slowdown and weak commodity prices are taking a deeper toll on emerging markets than expected and rich countries are still struggling to escape the legacies of the financial crisis, the fund said.
The downward revision is the fourth straight cut in a year, putting world economic growth just a hair over last year’s 3.1% and only marginally above the 3% rate the IMF has previously considered a technical recession globally.
“Consecutive downgrades of future economic prospects carry the risk of a world economy that reaches stalling speed and falls into widespread secular stagnation,” IMF Chief Economist Maurice Obstfeld said as the fund launched its flagship report. The IMF is worried such stagnation could further stifle investment, smother wage growth, curb employment and push government debt to unsustainable levels in some countries.
“Does that culminate in some crisis and recession? It’s not clear at all that would be the case,” Mr. Obstfeld said. “But we definitely face the risk of going into doldrums that could be politically perilous,” he said.
The increasingly dour outlook sets the tone for the semiannual IMF and World Bank meetings this week in Washington, where financial leaders from around the globe will gather to take stock of the global economy.
Recessions in Russia and Brazil are proving to be deeper and longer than the IMF anticipated after political problems compounded the effects of a plunge in commodity prices. Dozens of other oil exporters—from Venezuela to Canada, Saudi Arabia to Nigeria—are also facing sharp slowdowns.
The IMF upgraded China’s growth forecast this year by 0.2 percentage point to 6.5% as the service sector compensated for a downturn in manufacturing. But the country’s deceleration continues to hit trade partners around the world. Jitters about the fate of the world’s second-largest economy have roiled global markets in the past year.
China’s slowdown, along with the commodity-price downswing and the U.S. Federal Reserve’s move to start raising interest rates, packed a triple-punch to most emerging and developing economies around the world. Investors pulled out their cash in droves, pushing down exchange rates and equity prices, and raising bond premiums. China’s troubles also slashed trade and investment in many of those countries and spurred broader concerns about growth prospects in advanced economies.
The IMF said Beijing’s plans to boost output and overhaul its economy aren’t sufficient to address long-term growth concerns.
“Our concern is that some of the stimulus is likely to take the form of higher credit growth, more support for sectors that are…declining and not that productive.” Mr. Obstfeld said. “And so we worry about the quality of growth more than the quantity of growth.”
Those comments give credence to investors who are skeptical that authorities will be able to manage a smooth transition away from the country’s credit-fueled growth model toward one based more on markets and consumption.
Europe and Japan, meanwhile, can’t seem to escape from low growth despite aggressive central-bank actions that have pushed rates into uncharted negative territory.
“Persistent slow growth has scarring effects that themselves reduce potential output and with it, consumption and investment,” the IMF said.
A strong dollar, dimmer global growth prospects and soft oil prices also sapped output in the world’s largest economy, the U.S. The IMF shaved 0.2 percentage point off its U.S. growth forecast for the year to 2.4%.
Although global markets have recently clawed back some of the losses recorded early this year, the IMF said investors shouldn’t be complacent about the myriad risks threatening to derail an increasingly frail global economy.
Greece’s long-festering debt problems, a mounting refugee crisis and the U.K.’s potential exit from the European Union risk wreaking havoc on the eurozone and beyond, the IMF said. A misstep by Beijing could spark global market turmoil. Renewed stress in emerging markets, especially given rising corporate debt problems, could create financial stress, sovereign debt concerns, further exchange-rate depreciations and greater capital flight. Weak oil prices could spell deeper troubles ahead for oil exporters.
Amid those threats, the IMF also cut its global forecast for next year by 0.1 percentage point to 3.5%. But even that limited acceleration is based on a host of assumptions, including a smooth Chinese economic rebalancing, a pickup in commodity exporters and emerging markets more broadly.
“The current diminished outlook and associated downside possibilities warrant an immediate response,” Mr. Obstfeld said. “There is no longer much room for error.”
For the IMF, that means more easy money from central banks, new government-funded infrastructure investment and economic overhauls to raise productivity, competitiveness and investor confidence.
Although central banks are pressing the easy-money accelerator, other financial leaders have so far failed to deliver on promises to boost economic growth through coordinated measures.
Still, the IMF said policy makers should draft contingency plans for a joint response to revive growth should the global economy stagnate further. In one downside scenario that assumed a steady decline in global growth, the IMF suggested budget outlays of 1.5% of GDP in rich countries and 1% of GDP in emerging markets should help jolt the world economy out of its malaise.
The euro remains in control against the British pound as the UK currency continues to absorb heavy risk discounting ahead of the EU referendum which is now three months away.
There are however suggestions that the pound’s sell-off agianst the euro is potentially overdone at this stage and that the euro should at some point start to absorb some of its own Brexit-inspired risk premium.
The euro remains under pressure in the near-term against the dollar as the market continues to re-price the risk of a US rate hike.
The dollar strengthened yesterday as US Fed Member Bullard indicated yesterday that there may be a case for raising interest rates as early as April, given the possibility of overshooting inflation and unemployment targets.
This added to recent hawkish comments from Fed Members Williams, Lockhart, and Evans.
“Having broken below support at 1.1180, should current conditions prevail, the pair is likely to gravitate towards 1.1060/40,” says Robin Wilkins at Lloyds Bank.
1.1060 and 1.1040 are seen as congestion areas as the 50 day and 200 day moving averages are located here. Moving averages have the habit of halting moves in currency markets as they are typically laden with buy and sell orders.
On an intra-day move, this is likely to provide strong support.
To the topside, intra-day resistance is at 1.1235/55, with 1.1375/1.1465 the key level to watch.
“Longer term, the risk for the market is that EURUSD trades back towards and above 1.1375/1.1465, opening up range highs at 1.17, and potentially 1.20 – 1.23,” says Wilkins.
The analyst believes a break of 1.1060/40 would provide a bearish bias for a test of important support at 1.0825/20, with a move through there opening up range lows.
Eurozone Data Supportive of a Higher Currency
The EUR/USD exchange rate rose nine points from 1.1195 to 1.1204 over the five minutes following the release of Eurozone Manufacturing and Services PMI data on Tuesday.
This is a key data point for the shared currency as it tracks business activity in the two sectors across the Eurozone.
That it showed a higher-than-expected rise in March bodes well for the shared currency on a fundamental basis.
The first estimate for Eurozone Manufacturing PMI rose to 51.4 from 51.2 previously, when an increase to 51.3 had been forecast; for Services PMI, the rise was to 54.0 from 53.3 (no-change expected).
The Markit Eurozone Composite Index, which combines all PMI measures, rose from 53.0 in February to 53.7 in March and was a “welcome reversal after the declines seen in the last two months,” according to the accompanying statement.
The Services PMI result showed the index rebounded to a three-month high, whilst Manufacturing came out at a two-month high.
The report said that the figures showed that the, “Eurozone economy gained some momentum in March.”
The report further went on to say that the uplift was led by Services which recovered from a 13-month nadir reached in the previous month.
Manufacturing was seen as lagging although New Orders and Output rose from 12 and 10 month troughs respectively.
On the negative front: “Employment showed the smallest monthly increase since last September and backlogs of work, a key gauge of existing orders that firms have not yet completed, barely rose.”
Producer Price Inflation fell: “Prices meanwhile continued to fall. Average input costs dropped slightly for a third successive month, helping drive down average prices charged by firms for their goods and services at the second-fastest rate seen for just over a year, the rate of decline easing only marginally compared to February.”
Markits Chief Economist, Chris Williamson, said the PMI’s indicated 0.3% modest growth in GDP for the region in the first quarter of 2016:
“The eurozone saw renewed signs of life at the start of spring. The March PMI showed a welcome end to the worrying slowdown trend seen in the first two months of the year, putting the region on course for a 0.3% expansion of GDP in the first quarter.”
Italian Lender Remains Cautious
UniCredit applauded the recovery in a note after the event, but did not see it as sufficient to alter its outlook: “To be sure, today’s report, while reassuring on the resilience of the recovery (a message reinforced by the German Ifo), is not bullish across the board. As shown by the decline in export orders, which are now at the lowest level since January 2015, sluggish global trade keeps weighing on the manufacturing sector.”
The lack of job creation was a further concern for the Italian lender: “Jobs creation in both manufacturing and services has slowed its pace of expansion for the third month in a row.”
They foresaw ECB stimulus as helping to “neutralize” the slow-down but not a “game changer” in itself:
“The just-announced ECB stimulus, while not a game changer for growth, should neutralize some of the downside risks to growth that have emerged since the beginning of the year. But today’s ugly events in Brussels add further uncertainty to the outlook.”