Indian ore producer sees end to Chinese exports

7 Dec 2011 – AAP –
Indian iron ore producer National Mineral Development Corporation chairman Rana Som expects the developing country to stop shipping iron ore to China within five years, opening the door for another 100 million tonnes a year to be sent from Australia, according to The Australian Financial Review.

According to the report, Mr Som said Indian pig iron production would jump from 65 million to 100 million tonnes per annum as Indian miners feed growing domestic demand.

“I don’t think that in the near future India will be required to import iron ore,” he said.

“I feel India will slowly withdraw from the iron ore market and that will give extra space to the Australian iron ore market to export more and more quantity to the traditional markets of China and Japan.”

US Senate votes on China currency

3 Oct 2011 – AAP –

The US Senate this week is to debate a bill to punish China for its alleged currency manipulation, a measure that has divided the Republican presidential field and put the White House in a bind.

The legislation – backed by Democrats and Republicans in the polarised Congress, but opposed by Beijing and potent US business groups – faces a key procedural vote set for 0830 AEDT Tuesday.

A key author of the measure, Senator Chuck Schumer, predicted the bill would clear that hurdle easily on the road to an “overwhelming vote” to approve it and send it to the House of Representatives.

“The time for asking China nicely is over,” the New York Democrat said on Friday.

But the bill faces an uphill fight in the House, where Republican leaders have no plans to bring it up for a vote unless the issue flares up as a core dispute in the November 2012 presidential races, several aides said.

And while White House spokesman Jay Carney told reporters last week that the administration was “reviewing” the legislation and would not yet take a formal position, Schumer and others have said President Barack Obama opposes it.

The White House and Republican House leaders are likely mindful of stiff opposition to the bill from the business community in the wake of a letter from 51 US industry groups warning it would spark a “counterproductive” trade war.

The measure builds on congressional anger at the refusal by Obama and his Republican predecessor, George W. Bush, to formally designate China as a currency manipulator in annual reports.

It would make it harder to avoid such a diagnosis, while making it easier for US companies to seek retaliatory tariffs against Chinese imports if Beijing is found to keep its currency – and thus its goods – artificially cheap.

With the election season heating up, the bill’s backers have tied it to the sour US economy and the high 9.1 per cent unemployment rate and said that China’s trade policy had cost millions of American jobs.

A study by the left-of-centre Economic Policy Institute found that the US trade deficit with China had eliminated or displaced nearly 2.8 million jobs since 2001.

But the legislation has split the top two Republican White House contenders, with Texas Governor Rick Perry opposing it and former Massachusetts governor Mitt Romney saying he would make China’s currency an issue on his first day in office.

Romney has dubbed China an “economic threat” and vowed to designate Beijing a “currency manipulator”, a step that could trigger retaliatory US sanctions under existing law.

But “this is a free-trade issue and Governor Perry does not support this bill”, said a spokesman for his campaign, Mark Miner.

House Democrats hope that anger at the sour economy and at what are seen as China’s unfair trade practices will help them to force a vote with a little-used parliamentary procedure.

So far, 174 Democrats – and not one Republican – have signed a so-called “discharge petition” to do just that, leaving it well shy of the 218 signatures it needs, according to House Minority Leader Nancy Pelosi’s office.

Last year, a similar bill cleared the House by a lopsided 348-79 margin, with 99 Republicans voting yes.

Beijing unsurprisingly opposes the measure.

Chinese foreign ministry spokesman Hong Lei last week urged members of the US Congress to “reconsider their decision and refrain from pushing through the bill” and warned against “politicising economic trade issues and resorting to trade protectionism”.

Republican White House hopeful and former US ambassador to China Jon Huntsman told Fox News last week that he “would sign it simply because you need to keep pressure on China” but warned that Beijing would retaliate.

“You take action against China, you can expect them to rebut that action with commensurate tariffs,” he said. “During a recession, you don’t want a trade war.”

In late 2010, Obama himself said in the heartland state of Iowa that the yuan was “undervalued” and was “a contributing factor” to the yawning US trade deficit with China.

In May 2011, however, the US Treasury Department declined in a formal report to brand Beijing a currency manipulator, and congressional Democratic aides say Obama may get caught between opposing the bill out of worries it could spark a trade war and election-year pressure to look tough on China.

Beijing has a history of allowing the yuan to strengthen slightly when it expects to come under heightened pressure over the value of its currency.

China leads global steel output to new record

– Reuters – Published 20 Jul 2011 –

LONDON – Global steel production rose in June, led by record crude steel output in China, while US steelmakers also increased output despite slow economic growth in the world’s largest economy, data showed.

Global crude steel production rose eight per cent to 127.746 million tonnes year-on-year in June 2011, according to figures from the World Steel Association.

This represents a record daily production level of almost 4.3 million tonnes, compared with less than 4.2 million tonnes per day in May.

Crude steel output from China, the world’s top producer and consumer of the metal, rose to 59.932 million tonnes in June, up 11.9 per cent from the same month last year.

This was also an increase to a new record high in daily terms to slightly less than two million tonnes, from slightly more than 1.9 million per day in May.

“The figures are slightly above expectations,” Colin Hamilton, an analyst at Macquarie said.

“This is another record high for both the Chinese as well as the global market. There are no dramatic changes, but the big surprise was North America, which has grown month-on-month, despite a degree of economic concern.”

Global crude steel production in the US grew to 7.213 million in June, a 1.7 per cent increase from June last year.

Why Europe fears a China-led IMF

Karen Maley – 18 May 2011 – Business Spectator –

Economic power may be shifting rapidly from the West to the East, but Europe is certainly far from willing to cede the leadership of the powerful International Monetary Fund.

With Dominique Strauss-Kahn being held without bail in New York’s Rikers Island jail on sexual assault charges, a battle royale is hotting up over who should replace him at the head of the IMF. European politicians are adamant that the post should go to a European, in line with a tradition that dates back to 1944, under which a European heads up the IMF while an American gets the top job at the World Bank. With the sovereign debt crisis again threatening to erupt in the eurozone, they need to be able to count on the support of the IMF, which has contributed tens of billions of dollars towards the bailouts of Greece, Ireland and Portugal.

But the Europeans are worried that China and other emerging nations might try to flex their muscles and have a candidate from an emerging nation appointed to the crucial position. This could prove a problem for future bailouts of eurozone countries, particularly as many emerging nations privately complain that the IMF has been overly generous to Europe in the past.

German Chancellor Angela Merkel was quick to stake Europe’s claim on Monday, according to a report in the German publication Der Spiegel. “We know that in the medium term the emerging nations have a claim to the post of IMF chief as well as to the post of World Bank chief,” she told reporters on Monday. “But I think that in the current phase… Europe also has good candidates available.”

Chinese Foreign Ministry spokeswoman Jiang Yu countered, telling a regular news briefing on Tuesday said that the process for selecting the next boss of the IMF should be based on “fairness, transparency and merit.”

If, as seems likely, the Europeans get their way, French finance minister Christine Lagarde is seen as the front-runner to succeed DSK at the helm of the IMF.

According to the French newspaper Le Monde, Lagarde herself isn’t commenting on the matter, but there’s reason to believe she’d be interested in the position. Lagarde regularly refers to her fascination with the United States, where she worked for a long time. She’s also very highly regarded in financial circles. Even more importantly, Lagarde seems to have Berlin’s support.

But the German press has pointed out some of the problems with Lagarde’s candidature. In the first place, her nationality could prove a handicap. Of the 11 Europeans who have run the IMF since 1946, four have been French. Indeed, the IMF has had a French boss for 26 out of the past 33 years. Even more troubling is the possibility that Lagarde has potential legal problems of her own: a French prosecutor recently threatened an investigation into a case involving the tycoon Bernard Tapie.

As a result, the German press has its own list of possible candidates, which includes Axel Weber, the former Bundesbank boss who resigned in February; Peer Steinbrück, a former German finance minister; and the Swiss Josef Ackerman, who runs Deutsche Bank.

One thing is certain. With the eurozone again facing a period of turbulence, European leaders will be loath to give up what they see as their long-standing right to run the IMF. As a result, those calling on the IMF to overhaul its selection process so that the job goes to the best qualified, regardless of nationality, appear doomed to disappointment.