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Arrium - Onesteel

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Good on the rice industry but the fact is that a lot of the steel we import is substandard crap. We can produce quality products of just about anything we just have to look beyond price and consider what we are really getting for the money.

And it's not just Australia that has misgivings about Chinese steel.

http://www.telegraph.co.uk/finance/...ese-steel-imports-could-be-safety-threat.html
 
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SirRumpole said:
Good on the rice industry but the fact is that a lot of the steel we import is substandard crap. We can produce quality products of just about anything we just have to look beyond price and consider what we are really getting for the money.
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The market will fix that, but generally the chinese will make to any quality specifications you want.

They can make super high end products, they will just expect that you pay for it, if you keep wanting them to drop the price the quality will drop.
 

The market doesn't fix anything when subsidies are involved.

China massively subsidises it's steel production and a lot of other industries by payments to energy producers giving them a competitive advantage.

Meanwhile, suckers like us are selling off our energy suppliers and expecting business and consumers to pay profit seeking energy suppliers therefore putting us at more of a competitive disadvantage.

This is just one article on Chinese subsidies, there are dozens more.

https://hbr.org/2008/06/subsidies-and-the-china-price
 
SirRumpole said:
The market doesn't fix anything when subsidies are involved.
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it will fix the poor quality issue, would you be a repeat customer if the quality was no good???

Meanwhile, suckers like us are selling off our energy suppliers and expecting business and consumers to pay profit seeking energy suppliers therefore putting us at more of a competitive disadvantage
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lol, how dare a business try and earn a profit on supplying energy!!!

China are big importers of energy from Australia, we make a lot of money and create a lot of jobs exporting Gas, Coal and Uranium. As I said we need to stick to the sectors we are good at, and if the chinese want to subsidise the products they sell to us, let them, we will benefit from cheaper goods at their expense.

 
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SirRumpole said:
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That's the reason the country Down Under is going under.
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You are free to have that view, meanwhile in the back ground many industries are booming, tourists from china alone will spend more than $5 Billion holidaying in Australia this year.

When it comes to the Aussie economy so many people are negative, I can't see a reason for it.

 
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Value Collector said:
When it comes to the Aussie economy so many people are negative, I can't see a reason for it.
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Its the same ole group of grumpy ole conservatives that are negative.
 
Value Collector said:
China are big importers of energy from Australia, we make a lot of money and create a lot of jobs exporting Gas, Coal and Uranium.
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How many jobs have we lost due to gas exports?

It's hard to put a number on it but there have certainly been some bad effects already and there's more to come. Yes we have some jobs in the LNG plants. We also now have every home and business who uses gas or electricity, and that's just about every business in practice, paying more as a direct result.

I see it as a bit like saying we could employ another 100,000 people in the public service simply by raising taxes to pay for it and then hiring the workers. Then someone will point out that the higher taxes will destroy more jobs than were created. Gas exports have a lot in common with that scenario. The LNG itself isn't overly profitable but the doubling of domestic wholesale gas prices sure is (well, for gas producers at least).
 
Value Collector said:
When it comes to the Aussie economy so many people are negative, I can't see a reason for it.
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It's a bit like looking at the ASX200 or S&P500 and getting excited that it's going up. Then someone points out that 60% of stocks are in a downtrend, 20% are going sideways and it's only the outperformance of another 20% that's making the overall index rise.

There's certainly industries doing well, mostly based around consumption of services, whilst just about anything based around physical production of something is struggling at best.
 

Exactly. Whose stupid idea was it that Australian businesses and consumers must pay the export price ?

We are killing ourselves for the sake of some stupid market ideology which has been proven to be a crock because other countries don't observe it and give their own industries subsidies and other hidden advantages.
 

Maybe globalisation is more about the efficient use of the worlds resources, rather than about protecting the Australian living standard?
 
SirRumpole said:
We are killing ourselves for the sake of some stupid market ideology
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There is only one country on earth that applies the "free market" approach to gas exports and yes, that's Australia.

Everyone else either regulates exports or they don't export gas at all. Australia is the sole exception so far as I'm aware.
 
sptrawler said:
Maybe globalisation is more about the efficient use of the worlds resources, rather than about protecting the Australian living standard?
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I'll believe that when other countries adopt the free market principle. If Smurf is right, we are the only country silly enough to do it.
 
SirRumpole said:
I'll believe that when other countries adopt the free market principle. If Smurf is right, we are the only country silly enough to do it.
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Smurph is right, but our Governments seem to be every one else's b!tch.

Be it Rudd with the lunatic, throw away money scenario.

Gillard, we will lead the world by crucifying our business, with a carbon tax, when no other country is applying it.

Fortunately this Government hasn't had time to f*ck up much yet, time will tell, I'm sure they will.
 

So how do we keep gas related jobs, onshore, rather than export.
Without processing onshore, which our indigenous and Greens aren't happy with?
 
SirRumpole said:
I'll believe that when other countries adopt the free market principle. If Smurf is right, we are the only country silly enough to do it.
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To my understanding every other country either (A) doesn't export gas or (B) has taken steps to protect their domestic market with regard to supply and price.

In Australia we're at the point where some industries (including rather large companies eg Rio Tinto) claim that they're having trouble securing long term physical supply at any price since the gas companies are more focused on exports. That's not good.

So overall, LNG exports from Qld give us:

1. A significant new industry, albeit one that doesn't seem to be overly profitable in terms of return on investment but which does create direct employment although it certainly does bring a lot of $ in via exports.

2. Higher gas prices for everyone in Qld, NSW, ACT, Vic, Tas and SA. Direct cost of that is about $2 billion a year + whatever multiplier you apply to account for reduced business activity etc (gas consumption being reduced by about 15% due to the higher prices).

3. Some increase in wholesale electricity prices in those states due to higher cost for running gas-fired generation. That leads to higher cost for what is produced and, in practice, has lead to a major move away from gas as a source of power generation (back to coal mostly). A side effect of that is increased CO2 emissions and significantly higher cost of emissions reduction (to the extent that we're going to reduce emissions) since gas is no longer a viable cheap option - have to use wind + coal instead rather than just going to gas.

4. Also a lot of farmers upset about the expansion of the gas industry. I'm not sure what actual effects it's having and any associated economic impact but they're certainly not happy about it.

So we've basically put a "tax" on just about the entire economy via higher energy prices in order to make that work. That inevitably leads to reductions in other forms of business activity as a partial offset to the benefit of the LNG exports.

There's probably a net benefit, but it's another case of just selling the resource. If we used it here to process minerals then that certainly brings a lot more $ in than just selling the raw materials.
 
Link to an paper on the LNG market for those wanting to understand how the prices are determined...

http://www.rba.gov.au/publications/bulletin/2015/mar/pdf/bu-0315-4.pdf

Provided that the federal and state governments harvest all the taxes and royalties from the gas, it's hard to imagine Australia worse off for the export of the gas. If Australia were not exporting the gas, your theory Smurf, is that cheap gas would be available to supply the domestic market, thereby giving a competitive advantage to manufacturing, more disposable income for Australian families etc., that would outweigh the impact of tax revenue and royalties?

What about other commodities? Surely our steel producers benefit from an iron ore price that does not include the cost of shipping the ore to the northern hemisphere? Has this resulted in a net benefit to the Australian economy?
 
Great future, and the cheaper we become, the more tourists we will have Bali as an economic model, well done...
Not a grumpy old conservative guy, leaving in Qld so maybe the rest of Australia is different as I have not been interstate in the last year
 
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