TPT September 2017

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G LOBA L MARKE T P L AC E
SEPTEMBER 2017 95
Is allocation in sight?
A review by The Fabricator indicated that US mills are
anticipating allocation measures, with mills “vowing” to protect
current and loyal customers, rather than “bump them out”
in favour of new customers willing to pay the higher spot
pricing. The vice president of a large US-based service
centre responded: “I find this disturbing, as 232 is yet to
be announced, and the mills are already talking allocation
language. Almost like the mills were tipped off on what is
coming?”
Allocation could leave a steel-buying and using company
unable to get the steel it needs. The Fabricator commented:
“Steel buyers are also potentially in jeopardy whenever the US
government gets involved with picking winners and losers.”
The form that sanctions against imports might take is still an
unknown, with educated guesses ranging anywhere from a
30 per cent tariff to a trade rate quota (TRQ) system. Steel
Market Update’s prediction is that Commerce Secretary
Wilbur Ross will recommend a formula for determining the
“normal” level of imports, put a collar around that average and
subject imports that exceed it to a very high tariff.
Picking the appropriate time period for the TRQ formula will
be politically and emotionally charged. If the time period is a
five-year average, with the suggestion being prior to the surge
in imports in 2014-2015, then we may be looking at the years
2009-2013. Yet, due to the prolonged recession, 2009-2010
were two of the worst years for both the international and
domestic steel industry.
Many in the industry believe restricting foreign steel is a bad
idea, including manufacturers that rely on foreign steel, ports
that handle foreign steel, logistics and trading companies
that support foreign steel, and even certain segments of the
government.
This summer will also see the start of a one-year review of
the anti-dumping and countervailing duty trade cases on
corrosion-resistant, cold-rolled and hot-rolled steel.
The steel industry continues to live in interesting times.
Oi l and gas
Qatar blockade
Qatar energy and industry minister Mohammed al-Sada
has said that the current economic and diplomatic blockade
imposed by Saudi Arabia, Egypt, Bahrain and the UAE will
continue to have a limited impact on its oil and gas trade. He
explained that Qatar: “Has never failed a single shipment and
has not compromised on its long-standing image of being a
reliable supplier of energy to all corners of the world.” Sada
spoke at the World Petroleum Congress in Istanbul.
S&P Global Platts Analytics reports that Qatar is the world’s
largest LNG supplier, having exported 78.8 million tonnes of
LNG in 2016, over 30 per cent of global supply of 257.8 million
tonnes, with an increasing share of its production delivered
to emerging Middle Eastern buyers, including Egypt and the
UAE.
Sada assured the conference that the blockade would not
have a wide impact as: “Total exports in trade to Saudi Arabia,
UAE and Bahrain account for less than 8 per cent” of its total
global trade, continuing that total trade flows of energy to
Japan, India, South Korea and China – the main centres of oil
demand growth – account for three quarters of its exports, and
trade to these nations “remains unchanged”.
The countries accuse Qatar of supporting terrorist groups and
seeking to undermine regional stability; all claims that Qatar
strongly denies.
Pipeline to Mexico
Oil & Gas Journal’s Washington editor writes that NuStar
Logistics LP has received approval from the US Department
of State to construct a 108,000-barrel-per-day pipeline to
Mexico. The system will cross the US-Mexico border near
Penitas, Texas, carrying oil products. President Donald Trump
mentioned the project in his energy policy reforms address
on 30 June.
The 10" Burgos pipeline will parallel an existing line already
in operation, and will use the same right of way between
NuStar’s Edinburg, Texas, terminal and Petroleos Mexicanos’
gas plant near Reynosa, Tamaulipas.
NuStar also received cross-border permits for the existing Dos
Laredos and Burgos pipelines, authorising transportation of a
broader range of petroleum products.
Energy bills
On 28 June, the US House Energy and Commerce Committee
approved three bills aimed to establish realistic ground-level
ozone limit implementation schedules, facilitate interagency
reviews of proposed natural gas pipelines, and to create a
process to review applications for cross-border gas pipelines
and electricity transmission lines.
HR 806, introduced by Energy Subcommittee vice-chairman
Pete Olson, cleared the full committee by a 29-24 vote. It will
grant more time to states that have not yet implemented 2008
National Ambient Air Quality Standards, without triggering
penalties for failing to meet the current schedule. The
committee also passed, by a 31-20 vote, HR 2883 to promote
cross-border energy infrastructure, introduced by Oklahoma
Republican Markwayne Mullin.