“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

Social Share Toolbar

“Exxon Presses for Exports” – 11 December 2013, Wall Street Journal

MK-CI526A_EXXON_NS_20131211211205

Wall Street Journal

According to Exxon Mobil’s annual energy outlook, in the following decades, the world’s rising need for oil and energy will be met by ample amounts of petroleum sourced both in the US and globally. Exxon is asking the US to end embargoes on crude exports, which were originally created during the Arab oil embargo of 1973. The oil giant believes that the nation is now generating enough crude to become an exporter.

The US’s abundant amounts of oil have created some issues for Exxon and many energy companies: increased production has flooded US demand, causing domestic prices to decrease and gnawing at energy companies’ profits. The US doesn’t allow crude to be exported to other countries, except Canada; however, the government will soon allow natural gas to be exported through terminals to countries that don’t have free-trade agreements with the US.

Exxon’s outlook states that, by 2015, more oil will be tapped in North America than from Organization of the Petroleum Exporting Countries (OPEC), excluding Saudi Arabia. However, by 2040, Exxon foreshadows that OPEC will produce 45% of the world’s petroleum. Exxon’s outlook predicts that the world will use 35% more energy in 2040 than 2010, stemming from growing incomes and populations in developing countries like India and China. Exxon also predicts that oil and gas will supply 60% of energy used in 2040. Exxon’s projections are optimistic, noting that 65% of the world’s crude will remain untouched in 2040.

Lifting this embargo might be met with opposition, as consumers worry that crude exports can lead to rising US gas prices, and environmentalists worry about the environmental consequences of enlarged production. Exxon’s outlook reinforces the split between those who promote fossil fuel emission limits, and those — like Exxon — who deem such limits as impractical.

Exxon believes that coal will be mostly forced out by natural gas by 2030. By 2040, sources of gas, from materials like shale rock, will make up one third of the world’s energy.

As guardians of the free-trade market and pragmatism, we believe that US oil companies should be allowed to export (and import) oil and any other energy sources.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

January 2, 2014

Phinix LLC

Copyright 2014. All rights Reserved by Phinix, LLC.

www.phinix.net    skdas@phinix.net

Social Share Toolbar