“Chinese Shake Up Aluminum” – Wall Street Journal, 12 February 2015

In order to prevent Chinese aluminum from leaving the country, China’s government has imposed a 15% export tax on every ton of the metal that is bought by foreign buyers. However, Chinese aluminum manufacturers have found a way around the government’s tax, by producing semifinished products, or “semis.” While primary aluminum is usually shipped in blocks, semis are manufactured as door frames or hubcaps, which can then be liquefied and molded into other products. Because China’s need for aluminum at home is low — need for metals in the country’s infrastructure has decreased — Chinese manufacturers must sell abroad.

Chinese aluminum manufacturers actually profit from creating semifinished aluminum products: they get a 13% tax rebate on semis. It’s difficult to differentiate how much of China’s aluminum exports are semis; in December, the country’s overseas sales added up to 488,000 tons, a 136% surge from January 2014. China’s output also increased to combat rising prices.

The increase in aluminum exports from China is also reshaping the aluminum market: growth of Chinese exports in Asia has caused buyers’ urgent delivery premiums to decline. Because of the influx of Chinese aluminum, Malaysian and Australian aluminum manufacturers have redirected their aluminum exports to other regions Australia is one of the biggest exporters to Asia, but China is producing and exporting aluminum at a rapid rate. While countries like the US might benefit from China’s oversupply, China’s output is becoming a hindrance to aluminum premiums. It might take worldwide aluminum supplies a decade to recover from the flood of Chinese aluminum.

Will China ever play by fair market rules? We suppose not, as long as it doesn’t benefit them.

(From Wall Street Journal)

Developed and Written by Dr. Subodh Das and Tara Mahadevan

February 16, 2015

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Copyright 2014. All rights Reserved by Phinix, LLC.

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Novelis Introduces The Evercan

Last week, Novelis, the world’s largest flat-rolled aluminum maker, announced the introduction of the evercan™ sheet, the first commercially-created and certified high-recycled content aluminum sheeting for beverage cans.

The evercan sheet is made of a minimum of 90% recycled content. Novelis has partnered with the Georgia micro-brewer Red Hare to manufacture the brewer’s beer in the sheeting, which will debut in May. Novelis’ evercan sheet manages to bridge the gap between consumer recycling and new cans, which will also have a positive effect on the environment through energy and emissions reductions. Recycling aluminum necessitates 95% less energy than creating new aluminum sheeting, and expels 95 percent fewer greenhouse gas emissions.

Novelis’ partnership with Red Hare sets an example for all beverage companies to instead use the highly recycled evercan sheeting, rather than new cans. Red Hare is a leader itself in the craft beer world—it was the first craft brewery to bottle its beer in aluminum cans. Now almost 400 US craft brewers use aluminum to can 1,300 different beers.

The evercan is available around the world: Novelis’ plants in North America, Europe, South America and Asia are now authorized to manufacture the evercan.

See also:
Novelis Sustainability Report 2013
Aluminum Can Continues Leadership in Sustainable Packaging as Most Recycled Beverage Container
Novelis Breaks Ground on Aluminum Recycling Plant in Germany

Developed and Written by Dr. Subodh Das and Tara Mahadevan

April 10, 2014

Phinix LLC

Copyright 2013. All rights Reserved by Phinix, LLC.

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“Turkey’s Crisis Dents American Steel” – Wall Street Journal, 5 February 2014

Turkey is the world’s biggest scrap steel importer and a key consumer in the $20 billion US steel scrap industry. But Turkey’s current economic crisis is taking its toll on the US scrap steel industry, the country’s weak demand and declining currency making imports very costly.

The US is the number one exporter of iron and steel scrap, selling $10 billion per year, more than two times the amount Japan sells, second to the US. Turkey has been the number one importer of US scrap since 2008; the country’s steelmaking companies mainly use electric-arc furnaces to melt down the scrap imports. Turkey, in turn, sells to Iraq, Saudi Arabia and the United Arab Emirates, becoming the largest exporter to these countries.

In the first 11 months of 2013, Turkey’s imports dropped 18% to 4.9 million tons, a huge hit to the US scrap steel industry. Turkey is now importing more steel from Europe, and manufacturing steel products from semi-finished steel items purchased from Russia, instead of manufacturing steel from scrap.

East Coast scrap traders are more widely affected by Turkey’s decline, whereas West Coast traders chiefly export to Asia. While demand from Asian countries, such as China, is predicted to continue growing, there is a worry that the demand could dwindle as China has its first “scrap cycle,” a phrase applied to a young, industrialized country that begins producing its own scrap with recycled steel goods. China will remain an importer for now, but the question remains whether China, like the US, will also become a global exporter of steel scrap. The US steel scrap industry has a lot to lose.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

February 24, 2014

Phinix LLC

Copyright 2013. All rights Reserved by Phinix, LLC.

www.phinix.net    skdas@phinix.net

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