International economic organisations on China's iron alloy trade items trade careful

By Zou himfr

A few days ago, the international European Commission announced on Chinese-made seamless pipe provisional anti-dumping duties imposed. China's Ministry of Commerce Bureau of Fair Trading issued a statement a few days ago and who pointed out that the recently concluded G-20 summit in London once again reiterated its opposition to trade protectionism and restraint in the use of trade remedy measures. From European countries can be seen on the move, with its own very strong trade protectionism. The current financial crisis has disrupted the free international market mechanism, in which European countries does not speak, but their heart is still in the steel industry to seek a way out.

Citibank anticipates the program to stimulate the international finances in almost six billion U.S. dollars in relative to infrastructure buying into, the direct demand for iron alloy is roughly 1.2 billion tons. However, Citigroup accepts as factual that the iron alloy mills, the Government should make up for the incentive program to decrease the magnitude of personal buying into in alignment to believe that commerce development, especially infrastructure tasks China is determined, but will decrease foreign direct investment. Foreign direct buying into to China in 2006 and in 2007 China's GDP accounted for 5.7% and 6%.

In detail, China last year's financial incentive bundle to support iron alloy demand is the only factor. Stimulation of this year's program to decrease the ratio of buying into in infrastructure, while expanding wellbeing care, learning and low-end lodgings provide, it is approximated that the annual demand for iron alloy will decrease 6.8 million tons. Lyon, France, said that the alterations in the general demand for iron alloy has little impact. However, Lyon, analysts accept as factual that the latest rebound in iron alloy supplies do not have continuity, investors should depart a profit.

Major foreign hard metal administration rendering

It is comprehended that the United States and South America, Europe, the Organization of the eight steel and hard metal on April 14 distributed a connection assertion that China's "iron and hard metal development development policy" and other plays of the Government is undermining and changing the worldwide hard metal market, China should put an end to the steel and hard metal development extra funds and other wrong plays of competent advantage.

Published April 14 at the American Iron and Steel Institute (AISI) website said the connection assertion, China's hard metal development should be supported on the belief of the justice of the market as an alternative government intervention. The assertion that they trusted the Chinese Ministry of Public Works to alter the "iron and hard metal development development policy" to look for the scenery of the reply notice. In the assertion, the Chinese Government put frontwards six recommendations. These include: the suspension of the steel and hard metal goods produced in China to give extra funds to the hard metal vegetation to finish running the manipulate and guidance, the abolition of boundaries on trade overseas of raw elements, China should finish manipulating its currency boundaries and other series.

It is interesting that in the joint statement issued just one day after the U.S. Department of the Treasury on time April 15 to submit to the Congress semi-annual report of major trading partners, the exchange rate, the Obama Government believes that the United States, including China, major trading partners , there is no manipulation of the exchange rate to gain an unfair competitive advantage. U.S. Treasury Secretary Timothy Geithner said in a statement pointed out that China has taken steps to strengthen the exchange rate flexibility. American Iron and Steel Institute and the United States Government does not seem to any face, its said in a statement on the 15th of Obama in the semi-annual report the Government decided to manipulate the exchange rate in China as the country is not very disappointed, and that Congress should swiftly pass (Austria Bama should be in support of the Government) on the exchange rate to manipulate the issue of trade remedy laws.

It is understood that this joint statement issued by eight of the iron and steel are the American Iron and Steel Institute, the Canadian Association of iron and steel production (CSPA), steel imports Committee (CPTI), the European Union Iron and Steel Industry (EUROFER), the Latin American Iron and Steel Institute (ILAFA), Mexico Association of iron and steel production (CANACERO), special steel industry associations in North America (SSINA) and the American Iron and Steel Manufacturers Association (SMA).

Buyer's market has been formed

According to China Steel Association facts and numbers display that community by the end of March expanded 17.65 per hundred stocks. Morgan Stanley accepts as factual that as the world's biggest steel-consuming nations - China's metal and iron alloy supplies come to a record high, the market has currently started going in the main heading of over-supply. Its anticipated international iron alloy demand this year will be decreased by 11%, while China's demand will drop 5.5%. At the identical time, the outcome of hold ups in metal ore discussions, the Baltic Dry Freight Index proceeded to drop, in order that iron alloy charges have proceeded to down turn in space, all iron alloy pressure.

Iron ore price negotiations this year, dragging its feet. A few days ago the world's second largest iron ore producers Rio Tinto temporarily out of the proposed 20 percent price reduction, but the China Iron and Steel Association expressed opposition to, that this drop is too low, and demanded the contract price in accordance with the last year of 60% for pre-paid, to be contract reached after a small number of back up. FMG Group Executive Director said, FMG Group benchmark iron ore prices this year will drop 30 percent, which is the second producer of iron ore iron ore prices will drop position.

Trade obstacles directed to the critical trade items position

Market expectations, iron ore negotiations in Q2 is expected to come to an end, will not be dragged off by June. Goldman Sachs analyst predicted that the long-term prices should be down into four. The Mainland in March a total of 51 million tons of iron ore imports, while imports reached record highs over the previous year's 35.68 million tons over the same period increased by 43% due to the current spot price is only last year, 40% of contract price, steel prices may be re-signed Before the new contract to increase the cash inventory.

Since September last year by the global fiscal critical purpose, the global market shrinking demand for hard metal, China hard metal trade overseas plunged sharply. China's hard metal yield to enhance the trade overseas competitiveness of the mainland from December 1 last year, since the abolition of trade overseas tariffs on some hard metal yield, on January 1 this year, in addition gets clear of the hard metal trade overseas certificate organisation procedure, April 1 advance in some high value-added yield for trade overseas duty rebates rate to 13%.

Remains in the doldrums as a result of demand and factors such as trade protectionism, China's steel export situation is grim. China in January to February the export 3.47 million tons of steel. Further in February to which 1,562,000 tons, down 18.1 percent, a record since the November 2005 China's steel export volume monthly low. The average price of exports in November last year 1324 U.S. dollars per tonne, and gradually fell back to February of this year 1129 U.S. dollars per ton, decreased by 14.7% cumulative. - 20605

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