It seems there’s no stopping China’s crude steel output even as everybody is assuming its output will decline, as it tackles old and polluting steel plants. In April, global steel output increased by 5%, while China’s output rose by 4.9%, according to data released by the World Steel Association. That does not seem like a country that is slowing its steel output growth. But China is not alone. Most other regions saw their steel output increase, with the European Union, South America, Middle East, Africa and Asia driving growth. While the data shows India’s crude steel output grew by an estimated 4.8%, government data shows it increased by 5.4%. The ramp-up in steel output is visible in global steel capacity utilization, which has risen to 73.6% in April, up 2.5 percentage points from a year ago.
Opec wants to carry on pumping less, earning more
At first glance, the Organization of the Petroleum Exporting Countries’ (Opec’s) cuts haven’t worked—global oil inventories remain well above normal levels. But the policy made a difference where it really counts: juicing the coffers of finance ministries from Baghdad to Caracas. The resurgent flow of petrodollars explains why Saudi Arabia and Russia have largely convinced everyone else in the deal to extend the production cuts another nine months to the end of March 2018. “Make no mistake, it is all about oil revenues,” said Bhushan Bahree, a senior director at consultant IHS Markit. “The bottom line for oil producers begins, unsurprisingly, with a dollar sign and ends in billions.” The International Energy Agency (IEA), which advises rich countries on oil policy, said earlier this month that Opec has a “financial motivation to extend the supply cuts”. IEA calculates the cartel earned almost $75 million extra a day in the first quarter of this year than in the last quarter of 2016, despite collectively cutting output to 31.9 million barrels a day from 33.3 million. IHS Markit said Russia, the largest country outside the group to join the cuts, also earned more. Bloomberg
10GW solar projects may face GST heat
The 18% tax rate for solar modules under the goods and services tax (GST) can increase project costs and send investors back to the drawing board. At present, the effective tax rate is zero. The new rates can hit solar power projects under construction with a capacity of 10 gigawatts (GW), and pose a threat to their viability, according to consulting firm Bridge to India. The government is said to be assuring the industry that it will be insulated from any GST impact by passing the burden down the line. But Bridge to India points out that the process can be complex and challenging. “The entire process for tariff determination, ratification and documentation amendments would easily take up to six months or even more. Meanwhile, developers will be under pressure to complete projects on time and lenders will be unwilling to fund extra costs,” it adds.