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Iron ore price pushes above $US70
DANIEL PALMER BUSINESS SPECTATOR DECEMBER 05, 2014 7:25AM

THE price of iron ore has returned to levels above $US70 a tonne after a strong trading session that secured gains of more than 2 per cent.

At the end of the latest offshore session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US71.10 a tonne, up 2.3 per cent from its previous close of $US69.50 a tonne and 4.5 per cent above the five-year low of $US68 reached last week.

The rise still leaves the commodity down over 46 per cent on the year and miners will be on edge to see whether the latest rebound will prove another false dawn.

Throughout the year the commodity has made a number of upward moves but they have failed to endure, with bears eventually winning over bulls in an oversupplied market.

The oversupply — a factor of rising production and flat demand — is seen unlikely to resolve itself in the next couple of years, with many analysts now tipping the days of $US100 a tonne ore are behind us for at least the rest of the decade.

The positive session had little impact on the London-listed stock of BHP Billiton and Rio Tinto, with the miners losing 1.2 per cent and 2.6 per cent, respectively

Perth feels pinch as miners cut back

Resources Tess Ingram
852 words
6 Dec 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.

Christmas will not be merry in Perth. Further job cuts are expected from Western Australia's resources sector as the depressed iron ore price forces miners big and small to slash spending.

Hundreds of jobs were shed from WA's iron ore sector this week as iron ore prices crashed below $US70 a tonne, leaving many mining companies struggling to turn a profit on the ore they are producing. The iron ore price has plummeted close to 50 per cent this year and some analysts are forecasting that it will fall further in 2015, possibly dipping as low as $US50 a tonne.

Miners are reacting to the downturn by trimming boards, cutting senior management and culling workforces in their hundreds. The knock-on effects are being felt across Perth.

On November 26, BC Iron reduced the size of its board from eight to five directors and pledged to reduce its directors' fees from January 1 in the name of "responsible management".

On Thursday, Atlas Iron took a knife to its costs, culling 10 per cent of its workforce by sacking 30 onsite and 50 Perth-based employees. Two of its directors resigned and the remaining six took a 15 per cent fee cut to help reduce costs. Managing director Ken Brinsden said the cuts were inevitable.

"It's imperative Atlas maintains a competitive cost base in light of current market conditions," Mr Brinsden said. "We regret to see many good people leave our business. However, these changes are necessary and will help ensure our longer-term sustainability."

The cuts at Atlas follow 30 made in June and 70 made in September.

The majority of the 360-strong workforce at Mount Gibson Iron's Koolan Island mine were made redundant on Friday, but not due to the iron ore price. The mine, located on an island off the state's coast, has flooded with seawater and has been closed pending a decision on whether it is ­economic to repair it.Price bounce unlikely

Things are also looking grim at Fortescue Metals Group, where three senior executives were shown the door this week. A spokesman denied this was a reaction to the current environment, but BRW rich lister Peter Meurs is also taking time away from Fortescue for a two-month sabbatical. Mr Meurs oversaw Fortescue's massive expansion, which is now largely complete.

Fortescue has been through this before: in 2012 it cut 1000 staff and put expansion plans on ice. The iron ore price bounced by Christmas that year and the expansion was back on. But that's unlikely to happen this time. Last month, Citigroup moved to slash its forecasts for the commodity for the next two years to $US65 a tonne, from an average $US80. ANZ Banking Group added fuel to industry fears, predicting the commodity is unlikely to breach the $US100 mark again, period.

UBS analyst Glyn Lawcock said with iron ore prices to remain depressed next year miners need to cut costs. "Everyone is shedding staff from BHP [Billiton], Rio [Tinto] to the juniors. You have to modify your business," he said.

BHP Billiton began cutting staff earlier this year, shedding 500 jobs from its iron ore business, including 170 positions at its Mount Whaleback iron ore mine in the Pilbara and 100 roles at its iron ore division headquarters in Perth.

BHP iron ore head Jimmy Wilson said in October that he took "no joy" in firing staff. In the past, some employees have been moved to other areas of its business, he said. Iron ore is the nation's biggest export, accounting for 22 per cent of Australia's total exports in 2013. The majority of it comes from WA, so the twin effects of a sharp drop in mining construction and a 40 per cent slump in the iron ore price have ignited concern about the economic outlook.

The state has been stripped of its AAA credit rating, debt is ballooning and, on current prices, the iron ore price slump is set to punch a $2 billion hole in government revenue from mineral royalties. Within a few weeks the state government has to release its mid-year economic forecast. It currently has the iron ore spot price forecast to average $US122.70 a tonne this fiscal year.

In frustration, Premier Colin Barnett has lashed out at the mining companies and blamed falling iron ore royalty income and lower revenue from the goods and services tax for forcing deep cuts to the state's public sector, which include 1500 voluntary redundancies.

Perth-based recruitment veteran Debbie Cozart, a partner at executive search firm CTPartners, said there were few fresh jobs on the horizon that could soak up the losses. "It is really tough, there is no question about it," she said.

"The companies are having to react to the downturn in commodity prices and be as efficient as possible to minimise losses or maximise revenue. That is going to mean continued pressure on hiring . . . we don't see it stopping any time soon."


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Brazilian Vale fails in bid for diversity
Matthew Stevens
1197 words
4 Dec 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Matthew Stevens

Vale's decision to retreat to its iron roots in Brazil represents a dramatic shift in the geopolitics of the mega-miners as much as it does acceptance that an expensive, boom-time pitch for diversity has well and truly failed.

Still uncertain, preparations to spin out the Brazilian mining champion's base metals complex could relieve Vale of a world of pain and complication and see its ambitions trimmed to its host continent.

Whether by plan or satisfying coincidence, this fits hand in glove with the ambitions of Vale's biggest shareholder, the state of Brazil.

The government sacked Vale's great internationalist, Roger Angelli, in 2011 after the chief executive appeared to thoroughly ignore encouragement to focus more productively on South American opportunities, rather than pursue further foreign campaigns.

Vale, of course, is still majority owned by the government. So what it wants matters.

Pretty much from the moment Angelli was shunted, the structural separation of Vale seemed a live option. And the fact that Vale has confirmed a potential divorce, as we arrive at what feels like a new low point in the commodities cycle, only reinforces that perceived inevitability.

Quite naturally, Vale's reassessment of its base metals business will be seen through the same lens as BHP Billiton's decision to package up its sub-scale businesses and deliver it to existing shareholders.

But this idea is less valid than it might at first glance seem.

Vale says the review of base metals is about recovering the slimline fitness necessary to sustain and grow through the marathon that will be the future of its core business, iron ore. BHP's motivation is very different, though the outcome seems the same.

SpinCo is made from commodity silos that will only grow outside of the newly concentrated BHP family. The SpinCo names contribute just more than 5 per cent of BHP's profit, and they barely justify the sustaining capital they require, given the Global Australian's core four generate internal rates of return on capital of better than 25 per cent.

Effectively, SpinCo eats capital and management time without adding anything like the equivalent benefit.

In contrast, Vale's base metals business pretty much represents all of its global aspirations and, over the most recent quarter, the group currently generates almost a third of the group's top-line earnings.

In short, BHP's pruning leaves its basic strategy unchanged, while Vale's review sets the scene for a very new era indeed.Asset sell-offs

The other point of perceived concert between the Vale and BHP initiatives is that new management is selling off assets acquired in unnecessary and failed mergers.

No doubt, the mass of SpinCo's assets arrived with BHP's merger with Billiton in 2000, while the bulk of Vale's base metal business came with its takeover of Inco. But, again, first glances deceive.

Debate over the cost of BHP's alliance with Billiton continues to rage. But it misses the point because it starts from the wrong place.

The right question to ask is whether BHP is a better business because of the merger? The only answer to that is yes.

Billiton very quickly transformed BHP from a business unable to afford to pay a dividend (for that was the prospect in 2000) into one able to ride the cycle and emerge as the world's biggest diversified miner.

Vale, on the other hand, was left in a state of confused stasis by the Inco deal, and the complications of capital allocation, culture and management it created.

When Vale paid $US18.9 billion ($22.3 billion) for Canada's second-biggest company back in October 2006, the Brazilian was by a healthy distance the world's biggest iron ore producer. Then, Vale produced just more than 300 million tonnes a year of iron ore. Its two Australian competitors, Rio Tinto and BHP Billiton, added another 230 million tonnes to the system.

Over the next eight years while Vale sat in a time warp, increasing production to only 350 million tonnes a year, the Australians seized the day.

Today, Australia exports 700 million tonnes a year to global steel makers, with Rio saying it is headed to 360 million tonnes a year, and BHP convinced that its most productive course takes it to 290 million tonnes annually.

Oh and let's not forget the third force, Fortescue, which is currently running well above its 155 million tonne production target. Vale's investments

Instead of pressing the pedal on growth, Vale concentrated on reducing the cost of getting its material to market.

It invested against a fleet of massive boats called the Valemax to trim shipping costs, only to have them banned from entering Chinese ports.

So it is that, as its base metals divestment was confirmed a possibility, Vale was cutting the ribbon on a new $US1.4 billion iron ore port in Malaysia. Built to receive 400,000 tonne Valemax boats, it will be Vale's new regional hub.

But, however you cut it, and for whatever reason, the net result of Vale's experiment in growth through acquisition has been that the core business is weaker, and now head office has decided that it does not want to carry the weight of a highly complicated set of nickel and copper businesses.

The worrying risk for Vale is that while the seaborne iron ore trade stays in surplus, it is the marginal producer.

There must be delicious irony in this for Australian operators with long memories.

Brazil's stunningly rapid rise in the early 1970s to pre-eminence in the iron ore business was built by the Japanese steel mill's determination to foster competition and their understandable concerns over Australia's growing unreliability.

Now, with the markets in surplus and Australian producers driving their costs ever lower, while running their systems at world class reliability, Vale has been left the most vulnerable of iron ore's majors to the potential demand shock ahead.

News that US oil services king-pin Schlumberger had taken the lead in big oil's response to market calamity by taking a $US800 million write-down on its offshore exploration fleet will likely also resonate around BHP Billiton.

Schlumberger is BHP's driller of choice in the US shale game. And according to some inspired computing by Deutsche Bank, the contractor might be headed for some onshore pain as well.

At current prices, the DB model says BHP's Permian wells would not be making their cost of capital and those in the more established Black Hawk would be generating only a 20 per cent internal rate of return.

The model also says that, if oil prices continue to orbit $65, BHP's shale business risks missing its target to be cash flow positive by 2018.

Wryly, DB offered an answer. Current high US gas prices suggest a return to the dry gas at Haynesville and Fayetteville could be a better short term growth option.

The Fayetteville, of course, was recently added to BHP's list of potential disposals.


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Glencore boss slams iron ore sector
DOW JONES NEWSWIRES DECEMBER 11, 2014 1:15AM

The chief executive of mining giant Glencore, Ivan Glasenberg, again criticised the industry for its over-investment in certain commodities, telling investors that "fortunately we don't produce iron ore."

Mr Glasenberg's apparent distaste for the key steelmaking ingredient comes despite Glencore's approach earlier this year to Rio Tinto, one of the world's largest iron ore producers, over a potential tie-up. The approach was rejected and under UK company rules Glencore can't revive the talks until later next year.

Mr Glasenberg has criticised mining rivals such as Rio and BHP Billiton Plc for continuing to invest in and ramp up iron ore production even though the commodity's price slumped this year. Speaking at the company's investor day on Wednesday, he said the reason prices had fallen was that "we've all invested too much, we've increased supply and unfortunately a big amount has gone in the iron ore market."

Glencore said it would continue to take a disciplined approach to expanding its production capacity, amid the recent fall in commodity prices.

Mr Glasenberg said "capital misallocation, not a lack of demand, remains a key issue for the sector resulting in a clear need to differentiate by commodity."

"We will continue our disciplined approach to capital allocation, based on the supply-demand fundamentals," he added.

Glencore earlier said it would continue to focus its investment on projects that are already under way, rather than on new, so-called 'greenfield' mines.

"The amount of capital that goes into these projects, you don't get the returns," Mr Glasenberg said." Greenfield is something we are very scared [of] and you won't see us doing greenfields for a long time."

Glencore, the world's third-largest diversified miner by market capitalisation, confirmed its so-called 'sustaining' capital expenditure -- investment in current operations -- would be $US4 billion ($4.7bn) this year but would drop to nearly $US3.5bn by 2017.

The trader and producer of commodities ranging from oil-to-grains and copper, said it would aim to generate a 20-25 per cent return on equity from its mining activities and a 40-65 per cent for its trading activities.

The Baar, Switzerland-based firm, also said it would continue to return cash to shareholders, having completed 65 per cent of an already-announced $US1bn share buy back.

Iron ore faces weak year: Chinese steel chief
THE AUSTRALIAN JANUARY 05, 2015 12:00AM

David Uren

Economics Editor
Canberra

CHINA’S steel industry has warned that iron ore prices will remain under pressure over the year ahead as the nation’s steel mills battle with over-capacity and weak demand.

“The iron ore price will remain on the downward track while the coal price may stabilise or rebound slightly,” said Yang Zunqing, deputy secretary of the China Iron and Steel Association.

Mr Yang told an OECD workshop in South Africa that despite the dive in the costs of raw materials, the Chinese steel industry was still struggling to break even, with the major mills suffering a fall in sales revenue in the first nine months. Prices received by the Chinese steel industry are the lowest since January 2003.

Mr Yang said industry output was expected to remain high, despite the fact that excess supplies were being pumped into an economy with weak demand, ensuring that finished steel prices remained weak.

Mr Yang said the industry faced the prospect of higher ­financing costs, adding that internal cash generation was inadequate, while financing on the sharemarket was difficult and the cost of both bond and bank financing was rising.

The industry is trying to redouble its level of steel exports, expected to have surpassed 80 million tonnes last year, to offset the lack of domestic demand. However, Mr Yang said trade frictions limited the scope for export markets.

Over the medium term, demand growth would be focused on high-end steel grades, while the medium to low end would be left battling excess capacity and escalating pressure for higher environmental standards.

Mr Yang said demand from the property sector would remain weak, with new property starts over the first nine months of the year down by 9.6 per cent from a year earlier. This is flowing through to sales of major household appliances. Washing machine sales are down 3.8 per cent while freezers are down 2.8 per cent.

The steel industry is more optimistic about infrastructure spending and shipbuilding. New orders in shipbuilding are 38 per cent higher in the first nine months than a year earlier. Motor vehicle sales are still growing, although at only 4.2 per cent it is at a much slower pace than the 10 per cent-plus growth rates that China had been used to.

A report by the Britain-based Commodities Research Unit said that while softening in the Chinese economy was contributing to the downturn in the market, it was not the main cause. “A surge of low-cost supply from Australia has been the principal driver dragging prices lower,” CRU analyst Laura Brooks said.

A softening in demand was confronting rapid growth in supply, principally from Australia. Australia’s share of global exports of iron ore has increased from 43 per cent to 51 per cent since 2012, while its share of metallurgical coal has grown from just under half to 56 per cent.

Ms Brooks said the gross margins of BHP Billiton and Rio Tinto were still in the 40-50 per cent range, but that they too would be looking to lower costs by maximising throughput.

On the demand side, CRU says growth in fixed-asset investment, the traditional driver of steel production in China, has dropped from the 20 per cent-plus rates maintained until mid-2013 to a ­little over 10 per cent.

But the firm is not expecting a crash in Chinese steel production or demand for iron ore and coal. Steel production is still expected to record growth averaging 2.6 per cent a year over the next five years, half the growth rate averaged over the past five years.

Iron ore in retreat as Citi slashes forecast to $US58
THE AUSTRALIAN JANUARY 15, 2015 12:00AM

Paul Garvey

Resources Reporter
Perth

IRON ore prices are tipped to push to new lows in the weeks ahead, with cost savings from falling oil prices tipped to translate into more iron ore price falls.

Citi analysts yesterday slashed their iron ore price forecast for 2015 from $US65 a tonne to just $US58, signalling more pain on the horizon for Australian iron ore miners battling for profitability.

Citi’s bleak diagnosis came as the benchmark iron ore price continued to fall, dropping almost 1 per cent to $US68.50. After starting 2015 with a rally, iron ore is now within a whisker of the five-and-a-half-year low of $US65.70 posted before Christmas.

The shakiness took its toll on iron ore stocks, with Andrew Forrest’s Fortescue Metals falling to its lowest closing price since May 2009 when it shed more than 8 per cent to $2.345.

Australia’s biggest iron ore miners, BHP Billiton and Rio Tinto, fell 2.9 per cent and 3.6 per cent respectively while smaller miners were also hit hard. BC Iron was down 6.6 per cent and Arrium was down 5.6 per cent.

The latest fall in iron ore prices came as data showed that iron ore imports into China had hit an all-time high in December, suggesting that falling prices had boosted demand for overseas supplies. In addition, iron ore stockpiles at Chinese ports fell for a seventh straight week to their lowest levels since February.

Citi commodities strategist Ivan Szpakowski told The Australian that the lower oil price, along with the weakening Australian dollar, was helping Australian iron ore miners squeeze out Chinese iron ore producers by reducing fuel and freight costs.

“The major exporters including Australia have benefited vis a vis the Chinese domestic producers, who have not been able to take advantage of, for example, the [currency] movements and they also have not been able to benefit from the freight changes,” Mr Szpakowski said.

“The geographic advantage that Chinese producers had enjoyed is now eroding.”

While falling oil prices were expected to reduce costs for Australian producers by about $6 a tonne, the cut to Citi’s price forecast suggests those savings will pass through to consumers.

Speaking to The Australian from Beijing, CLSA head of resources research Andrew Driscoll said he expected to see more Chinese iron ore miners lose market share to Australian producers over the rest of the year.

He said the latest import data out of China was a positive surprise for the iron ore sector.

“I think there’s increased expectation of more stimulus in China, as we’re seen by the acceleration of infrastructure project approvals, and I think there are some encouraging signs in terms of improving property sales,” Mr Driscoll said.

“From a fundamental perspective there are some key signs of encouragement here, but that’s taking a back seat to action in oil prices and investor sentiment at the moment.”

China’s steel production to fall
THE AUSTRALIAN FEBRUARY 05, 2015 12:00AM

Sarah-Jane Tasker

Reporter
Sydney
Matt Chambers

Resources Reporter
Melbourne
China’s steel production to fall
China’s crude steel production is forecast to drop 1.07 per cent this year Source: AP
CHINA’S crude steel production is forecast to dip this year, putting further pressure on the iron ore price as the head of a US miner says Australian producers “don’t know what to do anymore”.

Li Xinchuang, executive vice secretary-general of the China Iron and Steel Association, told an industry conference that China’s crude steel production was forecast to drop 1.07 per cent to 814 million tonnes this year, with the country’s steel demand already at “peaking stage”.

Mr Li said he expected China’s domestic iron ore supplies to fall by 70 million tonnes this year, adding global iron ore prices could break $US60 ($77) a tonne, but were unlikely to stay below that level for a long time. The price has halved since last September and is now sitting at $US63 a tonne.

The latest forecasts out of China came as Cliffs Natural Resources chief executive, Lourenco Goncalves, took a swipe at Australia’s dominant iron ore producers.

“Iron ore is at a very low point right now. The Australians don’t know what to do anymore,” Mr Goncalves said on a conference call following his company’s latest production report.

“They are even putting their kangaroos for sale. And the iron ore price is not going anywhere at this point and they are expected to manipulate their currency and the situation has started to smell bad over there.

“I don’t know what’s going to happen in 2016. Nobody knows.” Cliffs, which operates iron ore and coal mines in North America, owns the Koolyanobbing mine in Western Australia.

Brad Potter, head of Australian equities at Nikko Asset Management, said yesterday that in iron ore cycles there was typically a shorter boom and a much longer bust. He said producers were looking at massive cost-cutting, ­highlighting that BHP Billiton and Rio Tinto had almost halved their costs.

“Even if the price goes to $US50, their margins will still be over 50 per cent, so they are still incentivised to expand,” he said.

“We’ve had a long term negative view on iron ore. I don’t think iron ore will fall to the same extent it has, but it’s difficult to see it actually improving any time soon.”

Mr Potter said the big margins meant it made sense for Rio and BHP to keep expanding. He said Rio historically had made margins of about 50 per cent on iron ore, so the sliding prices were a return to more normal circumstances.

May Zhong, director of corporate ratings at Standard and Poor’s, said the lower iron ore prices had hit producers but the major miners, BHP Billiton and Rio Tinto, had levers to pull such as reduced capital expenditure and increased productivity.

Ms Zhong also said that BHP’s plans to demerge its non-core assets into a separate vehicle, South 32, would not have a major impact on its financial risk profile.

Mr Potter added that when an analysis of a demerger was done, the market would generally value the “rump” of the business higher than it was.

“I suspect it (South32) will be an acquirer, unless it gets acquired ... it will go out and buy, theoretically, someone like a Whitehaven or Iluka, a company with good-quality assets that are looking cheap.”

In his bi-annual testimony to parliamentary committee today, RBA Governor expressed concern that the downswing in mining would only accelerate in 2015.

(13-02-2015, 02:35 PM)edragon Wrote: [ -> ]In his bi-annual testimony to parliamentary committee today, RBA Governor expressed concern that the downswing in mining would only accelerate in 2015.

Memang concern lah, China PMI down means less production means less ore needed and cheaper prices.

China iron ore demand to fall
Angus Grigg and Jacob Greber
727 words
11 Mar 2015
The Australian Financial Review
AFNR
English
Copyright 2015. Fairfax Media Management Pty Limited.

Chinese government and private sector analysts say demand for Australian iron ore could fall by up to 10 per cent this year, raising the prospect that production from iron ore mines in West Australia's Pilbara may be nearing a peak.

Chinese trade data for January and February provides tentative evidence that volumes of iron ore and coal shipments are no longer growing strongly.

If confirmed over coming months, the stall would undermine a long-held assumption in the federal Treasury, the Reserve Bank of Australia and the government's top resources forecaster, the now disbanded Bureau of Resource and Energy Economics, that volumes will continue to rise until next decade.

Former BREE chief executive Quentin Grafton said the prospect that the peak in iron ore shipments may arrive far sooner was plausible.

"Big mining companies talk about [volumes to China] peaking in the 2020s, and then plateauing, rather than falling off," he said.

"That could be happening now."

Dr Grafton, at the Australian National University's Crawford School, said there would be serious consequences for both higher-cost iron ore producers and government revenue.

He said while the official Chinese growth rate for the economy was about 7 to 7.5 per cent, energy use data implied the economy may be expanding far more slowly, at perhaps 5 or 6 per cent.

"There are credible stories that the growth rate in China is less than the official rate, which would fit into the story of iron ore peaking this year or next year," he said.

The Department of Industry - which last year absorbed BREE's independent forecasting function - would not comment on Tuesday.

An earlier-than-expected peak would add a fresh source of stress to the economy, which is already struggling to shake off soft consumer confidence and rising joblessness. Figures published on Tuesday showed business confidence fell last month - despite the Reserve Bank's interest rate cut - to the lowest level since the 2013 federal election.

Changes in demand from China also help explain how the terms of trade - a measure of Australia's export earnings - have fallen faster than anticipated.

With income from exports already being smashed by falling commodity prices, as iron ore remains around a six-year low of $US59 a tonne, a reversal in volumes would hit the economy.

"We are at or near the volume [of iron ore] Australia is going to achieve," said Tim Murray, managing director of Beijing-based J Capital Research, who says iron ore volumes will not offset declines in ore prices in future.

"The only thing that can save Australia's receipts from commodities is the falling Australian dollar."

The Reserve Bank's scope to cut rates and put downward pressure on the currency continues to narrow, with the bank last week refraining from adding to February's rate cut due to surging Sydney property prices.

While analysts are split on how much more iron ore Australian producers can ship this year, there is a growing agreement that Chinese demand is set to fall.

Those contacted by The Australian Financial Review forecast demand for iron ore slipping between 1 per cent and 10 per cent in China this year.

Among the most negative on the outlook is J Capital's Mr Murray.

"My best case scenario is a fall in demand of 5 per cent. My base case is for a 10 per cent fall," he said.

Mr Murray believes this fall in demand will result in production cuts from higher cost miners, even as the likes of Rio Tinto bring on more supply.

China's Customs Bureau on Sunday said imports of iron ore were flat over the first two months of the year compared with the same time last year. Import figures for March were now looming large as a key indicator of Chinese demand.

Australia accounted for 61 per cent of China's imported iron ore in the fourth quarter.

Imports of coal fell by 45.3 per cent over the first two months of 2015 to levels not seen since April 2011.

While falling Chinese coal imports were hurting the Australia industry, the prospects for iron ore were far more relevant to the federal budget. The steel-making commodity accounts for $1 out of every $5 in exports.


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