28 July 2022 – Indian steelmakers are adding boron to their steel alloys to avoid export tax. This is what Indian media report. However, the addition of boron in even the smallest quantities significantly changes the composition of the steel. This poses great dangers. And positive economic data from China are causing prices on the commodity exchanges to rise.
Dangerous loophole: Boron in Indian steel saves export tax
As Indian media report, steel producers in India have discovered a loophole in the export tax of 15% with the addition of boron to steel, which was enacted by the government at the end of May 2022 to hold products in the country and push prices to a lower level.
Boron-containing steel alloys exempted from export tax
Exports of boron-containing steel alloys, such as electrical steel, are exempt from India’s tax and have increased more than eight-fold since the announcement. All other steel exports are said to have declined significantly.
Why boron in steel can be a problem?
The element is used to improve the hardenability of steel. Even the smallest amounts of boron have a significant impact on the quality of the steel. If on the one hand hardenability, tempering temperatures and machinability improve, however, there are also major problems and dangers.
Incorrect use can lead to disaster
Problems and dangers arise especially when boron alloys are used for load-bearing structures. If the boron content is too high, hardenability decreases, toughness is reduced and embrittlement increases. This can also lead to problems during welding and cause solidification cracks.
The Hitachi group also warns on its website about the dangers of the element in steel. “Welding problems, reduced elasticity and potential deformation of large structures can, in the worst case, lead to the collapse of bridges, buildings or the sinking of oil rigs.”
In the European Union in particular, there are mandatory limits that must be complied with.
Not always indicated on the certificate of conformity
Boron may therefore be necessary in certain cases and undesirable in others. The problem is that the element is not always indicated on the certificate of conformity of the crude steel. Material confusion or unawareness could have fatal consequences if steel containing boron is used in the wrong application.
Industry experts warn
Indian industry experts also see this as problematic and warn that not every customer is likely to accept boron in steel. And criticise the use of the element to circumvent export tax.
SHFE and DCE futures gain significantly
Futures on the Asian commodity exchanges SHFE and DCE have risen significantly today. Across the board, base metals, but also iron ore, coke, hot-rolled coil and stainless steel are up. Some are up more than 7%. Aluminium is up more than 4%, copper is up almost 3%, iron ore is up more than 7%, and coke is up more than 7.5%.
Positive economic data from China
According to analysts, the background here is the data from industrial companies in China, which were surprisingly positive last month. And also the announced interest rate hike by the US Federal Reserve was expected by the market and perceived as moderate. This is contributing to the good mood on the market today and has already caused copper and aluminium, for example, to rise by around 2% on the European commodity exchange LME.
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