The U.S. takes effect on the second round of sanctions soderberg electrode urgently
Summary of soderberg electrode: The United States started two rounds of sanctions in August and November 2018, which had a very negative impact on the economy. U.S. sanctions restrict any country or company from conducting trade; any country or company that opposes this requirement will be subject to secondary sanctions (no business with the U.S. allowed).
The iron and steel industry is one of many industries plagued by sanctions, because steel production is mainly electric arc furnace technology, and the key raw material soderberg electrode for electric arc furnace steelmaking is mainly imported. About 67% of soderberg electrode imports are from China, and about 12% are from India. Since the implementation of the sanctions in August, both countries have stopped supplying products as they did in the past. Market rumors that India and China may supply soderberg electrode through Europe. The EU is working hard to set up special payment channels (SPV) to circumvent US retaliation measures and deal with trade and financial transactions. SPV is a barter transaction, which is neither linked to the US dollar-denominated international financial system, nor does it require currency transfers between EU countries.
When companies sell products to Europe, they accumulate credit, which can be used to purchase products from other European companies. However, according to the latest news, the EU still needs to finalize the relevant details; and because of fear of US sanctions, no European country is willing to serve as a carrier country for SPV so far. According to sources, due to the previous sanctions, the steel industry is ready this time and purchased a one-year stock of soderberg electrode, which is sufficient to maintain it until April 2019.
However, problems are likely to occur after this, and steel mills are actively seeking solutions to the problems as soon as possible. Soderberg electrode broadcast on November 28, 2018 Source: Mining Material Network