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TATA Steel expects steel demand in India to bounce back

TATA Steel expects steel demand to bounce back in the second half of the fiscal year, led by segments like passenger vehicle sales, construction and rural homes, in what perhaps marks the first upbeat remark from a top manufacturer about the domestic steel market that has been sagging for a year and half.

Mr Peeyush Gupta vice president for steel marketing and sales told ET in an exclusive interview that “We see the steel sector picking up during the second half riding on auto, construction and rural demand. Indian demand should be met out of Indian production of steel. Imports are not the best way for it.”

Mr Gupta said that “Since steel accounts for 50% of construction, we are betting big on it to raise overall demand.”

He added that “The rural market is doing well, particularly in the individual homebuilding segment where steel accounts for some 12 to 15% of cost, with growth also picking up in Tier 2, Tier 3 and Tier 4 towns.”

Mr Gupta further said that “Retail and branded steel now account for 45% of our sales by value compared to 2001 when it accounted for only 5% of sales. In this, the SME segment is critical for us since it accounts for nearly 20% of our branded retail sales by value. We have systematically targeted them since they want the steel to come to them.”

The automotive sector accounts for nearly 18% of TATA Steel’s sales by value. A revival in the sector sales have been strong for car and two-wheeler makers for several months now and they are expecting a bumper festival period is making the company upbeat about demand from that sector. In commercial vehicles, order books are full in segments like excavation and mining equipment.

State and central government funding in infrastructure and construction, particularly in flyovers, bridges, airport terminals and roads, is expected to see a rise, with the railways too likely to add to the construction boom.

In rural and in semi-urban and urban areas in top 40 towns including places like Rohtak, Gorakhpur or Kanpur, Tata Steel expects a spurt in sales of its branded galvanized corrugated sheets for roofing, along with tubes and bearings. It also expects demand from segments related to agriculture. However, in Tier 1 cities, where the builders or promoters are mainly involved in residential segment, demand is yet to pick up.

Source : Economic Times
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Steel ministry against anti-dumping duty on metallurgical coke imports

VC Circle reported that seeking relief for domestic steel manufacturers, India’s steel ministry has requested the ministry of commerce and industry to drop the ongoing anti-dumping investigation on low ash metallurgical coke imports from Australia and China. The investigation was initiated in December by the Directorate General of Anti-Dumping and Allied Duties a body under the commerce ministry.

A senior government official, requesting anonymity, referring to a recent communication between the two ministries said since the steel sector is under stress, measures against raw materials will have an adverse impact on steel manufacturers. However, a senior commerce ministry official, who also did not want to be named, said the investigations are over.

Taking into account the sharp increase in coking coal prices since August 2016, the steel ministry is of the opinion that the scenario has changed when initial anti-dumping duty petition was filed. It believes that the recent increase in coking coal prices could squeeze Indian steelmakers’ profitability.

The official said that “The steel ministry has said the investigations should be kept on hold and coke with ash content 12.5% and below should be excluded from any anti-dumping duties as these are not available domestically.”

Another senior government official on condition of anonymity said any move to restrict metallurgical coke import may also affect various pig iron producers as well as the foundry industry which consumes the raw material.

According to a recent report by rating agency Fitch, the prices for hard coking coal for export by Australia as of 30 September was 125% (USD 100 per tonne) higher than the average in the quarter ended June 2016.

Experts, however, think that the government should wait and watch the international pricing scenario before taking a final call.

Source : VC Circle
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Hebei Province launches a campaign against polluting steel mills

Reuters reported that on October 15 China's Hebei province has imposed what it calls "special emission restrictions" on local mills as part of its war on smog, according to a policy document. According to a notice issued by the local environmental protection bureau on Friday, 41 million tonnes of steel capacity and 27 million tonnes of coal capacity have already been closed.

Local steel enterprises will have until September 1st 2017, to ensure their facilities comply with tough new standards for sulphur dioxide and other major sources of air pollution, the local environmental protection bureau said in a notice.

Hebei is responsible for nearly a quarter of China's total national steel output. It was the location of seven of China's 10 smoggiest cities last year and is a major source of air pollution in China's capital, Beijing. The province has pledged to shut 60 million tonnes of crude steelmaking capacity and 40 million tonnes of coal production capacity from 2014 to 2017.

Last year, steel production in Hebei rose 1.3% on the year to 188.3 million tonnes, though total capacity remains much higher. Coal output in the province fell 5.4% to 82.2 million tonnes.

The province, one of the main fronts in a "war on pollution" declared by Premier Li Keqiang in 2014, has been under pressure to crack down on "backward" production capacity and firms that break environmental rules.

It was heavily criticized by the Ministry of Environmental Protection earlier this year after an inspection tour revealed that local firms had illegally expanded production capacity and engaged in "fraudulent practices" aimed at circumventing rules.
Hebei has since launched a campaign against local steel and coal producers, and the provincial government said last week it had uncovered 1,173 illegal projects in the steel sector, involving 93 companies.

Source : Reuters
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Emirates Steel conducts site tour for the World Steel Association 50th Annual Conference Guests

Emirates Steel, the only integrated steel plant in the UAE, owned by SENAAT, hosted a site tour to its plants in Mussaffah, Abu Dhabi for participants and guests of the World Steel Association (worldsteel) 50th Annual Conference that took place for the first time in Dubai, and concluded its activities on 12th October 2016.

Emirates Steel’s plant tour began with a safety briefing and a presentation from the Health and Safety Team including a short video, followed by plants visit where participants followed safe walkways supervised by the tour guide and the company’s officials.

The tour schedule also included a visit to Masdar facilities, where participants were updated on the first strategic joint CO2 capture, usage and storage project in the Middle East, between Emirates Steel, Masdar and ADNOC.

Attendees were briefed on the core idea of the project, that focuses on utilizing the CO2 generated by Emirates Steel plants to feed the project when it goes operational, including a detailed presentation on its three elements of the industrial capture of CO2 from Emirates Steel’s facilities; compression, dehydration and transportation of the CO2 from the Masdar carbon capture facility (CCF) to an ADNOC onshore oil field, and finally usage of injected CO2 for enhanced oil recovery.

Specialists demonstrated benefits of the project that will liberate precious natural methane gas traditionally used to pressurize oil wells and aid oil recovery to instead be used for traditional power generation and water desalination, in addition to its massive contribution to Emirates Steel’s carbon footprint with plans to sequester up to 730,000 tons of CO2 annually, which is equivalent to planting around 100,000 trees.

The site tour was attended by representatives of global steel companies and associations from around the world participants of the worldsteel 50th Annual Conference, officials of Emirates Steel and Masdar.

Source : Albawab.com
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Demand for domestic steel surges in Zimbabwe on import restrictions

The Chronicle reported that under pressure to meet growing domestic demand, Redcliff-based Steelmakers Zimbabwe says that it is working hard to boost production. Management says the implementation of Statutory Instrument 64 of 2016, which removes several goods including steel products from the Open General Import Licence, has revitalized the company's fortunes. The legal framework was promulgated by the Government in June to control cheap imports flooding the country.

In an interview, Steelmakers Zimbabwe operations manager Mr Upendra Alamwar said that following the promulgation of SI 64/2016, there has been more demand for locally manufactured steel products.

He said "Any policy that promotes production of local products is welcome. SI 64/2016 has helped us in the steel industry as it has created more demand for steel products. Since the promulgation of the statutory instrument, we have seen a shift in demand which now requires us to increase production to match with demand.”

The steel manufacturer says it has also begun feasibility studies to introduce new technology at its sponge iron plant in Masvingo. About $155 million would be set aside for the investment, which is expected to improve output tenfold from the current 30 000 tonnes of sponge iron per annum to 300 000 tonnes.

Source : The Chronicle
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Iranian steel targets require rail transport development - IMIDRO

Financial Tribune reported that Iran’s railroad transportation capacity needs to increase fourfold to 88 million tonnes in about nine years to help fulfill the steelmaking target set in the 20-Year Vision Plan (2005-25). An executive of Iranian Mines and Mining Industries Development and Renovation Organization, Iran’s biggest holding company in the mining sector, Mt Abbas Ranjbar said “The national railroad’s development is deeply entwined with the expansion of the mining sector, as minerals made up more than 60% of the 35.6 million-ton cargo transit during the past fiscal year (March 2015-16),”

IMIDRO projections show the railroad system needs to sustain an 11% growth rate in transportation capacity annually for the next decade. Iran aims to become the world’s sixth largest manufacturer of steel and reach the crude steelmaking production capacity of 55 million tons per year by the end of 2025.

Despite objections regarding the plan’s feasibility by industry experts, the government remains steadfast in pursuing the goal.

Source : Financial Tribune
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Steel Strips Wheels receives huge order from VW Argentina

Economic Times reported that Steel Strips Wheels has received huge order from Volkswagen Argentina which is expected to give an additional earning of around INR 4 crore to the company.

The company informed the Bombay Stock Exchange, on Friday, that Volkswagen Argentina has done an upward revision of order to 34,000 units from erstwhile 7,000 units. The Indian component maker is to begin the delivery of these wheels from October 16 to March 2017, from its Chennai plant.

It further said that this increase in exports order is due to higher proliferation of the steel wheels usage per vehicle at Volkswagen's plant in Argentina and is expected to prevail in future.

Source : Economic Times
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Steel Strips Wheels Q2 sales down by 2%

Steel Strips Wheels Ltd has reported results for the quarter ended September 30th 2016. The company reported its net profit at INR 18 crore in the quarter ended September 2016 as against INR 15 crore during the previous quarter ended September 2015.

The company's sales decreased 2.7% to INR 291 crore in the quarter ended September 2016 as against INR 299 crore during the previous quarter ended September 2015. During the quarter under review, EBITDA Margin stands INR 37.6 as on September 30, 2016 from INR 34 as on September

Source : India Infoline
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Restart of the Samarco mine is not assured - BHP Billiton

Telegraph reported that the future of BHP Billiton’s Samarco iron ore mine in Brazil has been thrown into doubt after the mining giant admitted for the first time that it cannot guarantee that it will be reopened. The FTSE 100 miner warned that the operation would need to be economically viable to justify a restart and therefore its future is “not assured”, it has told The Telegraph.

The mine has been closed since November last year when a tailings dam collapsed, deluging the surrounding area with a tidal wave of mud that killed 19 people and flattened two towns.

BHP, which co-owns Samarco with Brazilian mining giant Vale, is expected to face uncomfortable questions about the disaster at its London AGM next week, ahead of the one-year anniversary of the dam’s collapse.

Dean Dalla Valle, BHP’s commercial officer said that “It’s very important for the region, the employees, the shareholders and the country that Samarco restarts. Technically, that can happen quite quickly but a number of approvals are needed. We’d need to look at what the costs would be. We can’t sign blank cheques. We’d very much like to see it restart but it has to be done under conditions where the revenue it makes can offset the costs. Restart is not assured.”

A key sticking point is Samarco’s USD 3.8 billion debt. Last month it missed an interest payment on a USD 500 million bond, though it has a 30-day grace period in which to pay. The company, which has laid off more than half its 5,000 workers, has had no cash flow since suspending operations.

Many locals are keen for it to reopen as it is a major contributor to the local economy, but experts believe it is unlikely to reopen before the second half of 2017.

Source : Telegraph
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North Korea iron ore exports up despite UN sanctions

Voice of America reported that North Korea's exports of iron ore to China have surged dramatically despite fresh UN Security Council sanctions against the North in April.

Quoting data from the Korea International Trade Association, VOA reported that Chinese imports of North Korean iron ore increased 67% on year from April to August. In April, Beijing banned trade of 25 items like iron ore, coal, aviation fuel and rocket fuel with the North.

But it allows import and export of goods necessary for people's livelihood, and the drastic increase in iron ore trade shows how China and the North are taking advantage of loopholes and exceptions.

Overall trade of banned items between the two countries, however, dropped 8.1% on year. China's exports of aviation and rocket fuel to the North fell 16%

A government official said that "The sanctions against the North are kicking in to some extent, but in many cases like the iron ore trade, it's taking advantage of loopholes. They must be plugged in a fresh round of sanctions that is being discussed at the UNSC."

Source : Digital Chosun Inc
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Kazakhsthan iron ore production dropped by 12.5% in 9 months

According to statistics committee of Kazakhstan ministry of national economy, iron ore production in Kazakhstan amounted to 26.325 million tonnes in January to September 2016, 12.5% down year on year.

According to the statistics data, copper ore production amounted to 55.786 mln tons (+124.5 %), gold ore (14.039 mln tons (+0.4%), chrome concentrate- 3.088 mln tons (-3.1%)

Source : KazTAG
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Vedanta suspends work at Bicholim iron ore mine in Goa

Reuters reported that mining conglomerate Vedanta has suspended mining operations at its Bicholim iron ore mine in Goa, citing “safety and security” reasons in the wake of growing labour unrest. The suspension is from October 13 at the Bicholim mine, located at village Amona in Bicholim Taluka of north Goa.

Vedanta said in a public notice that “The management of Sesa Mining Corporation through this publication would hereby like to inform that union representatives along with their workmen have been continuously indulging in illegal and unjustified acts. Therefore in the compelling circumstances, the company with a heavy heart has decided in the interest of safety and security of all its employees, to suspend the operations/ work at SMCL Bicholim mine with effect from October 13, 2016,” it said.

Vedanta further said that “Presently, workmen are abstaining from work themselves and also not allowing any employees, contractors and their laborers to discharge any work at the Bicholim mines. Due to the systematic and deliberate action created by workmen, it is beyond the control of the management to continue operations at Bicholim mine in the prevailing circumstances.”

The notice further said that “Employees willing to work have been forcibly evicted and threatened not to report for duty. They have also resorted to illegal means with malafide intention by gathering in front of the company gate and preventing any one from entering inside the company premises.”

Goa produces low grade iron ore (Fe content below 58 per cent), which is exported to China. After removal of the mining ban by the Supreme Court in 2014, the state is allowed to mine 20 million tonnes, with the highest share of 5.5 million tonnes going to the firm led by billionaire Anil Agrawal.

Vedanta mines iron ore in Goa from the Codli and Bicholim mines. It also has a met coke and pig iron plant, besides a captive power plant in the state.

Source : Reuters
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Samsung to pay AUD 12 million to Roy Hill subcontractor

AAP reported that Samsung C&T will be forced to pay a subcontractor at Gina Rinehart's Roy Hill iron ore project in WA's Pilbara region about AUD 12 million after partially losing a court battle.

Since late last year, subcontractor Duro Felguera Australia has been making monthly progress claims for payment, but main contractor Samsung has not been paying the company.

The matter went to the WA Supreme Court, with Duro making five applications seeking a total payment of more than AUD 60 million. But in his judgment handed down on Friday, Justice Andrew Beech ruled only about AUD 12 million should be paid.

The project involved developing a new iron ore mine at the Roy Hill deposit, about 277 kilometres south of Port Hedland, as well as a processing plant, a heavy haul railway system from mine to port, and new port facilities.

Source : AAP
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CIL to channelize more coking coal to steel sector

Business Standard reported that with volatile global coking coal prices straining the balance sheets of steel companies in the country, Coal India has decided not to increase its prices, to remain competitive and become a substitute to imports.

A senior Coal India official told Business Standard, that “We are devising plans whereby we will channelise the coking coal variety towards the steel sector.”

An official in Coal India said companies like Tata Steel and SAIL were keen to buy domestic coking coal in wake of rising international prices. Following the meeting, Coal India made a one-time offer of 20 million tonne coal under Special Spot e-auction system.

He said “Such auctions are likely to rise in the coming days if we want to cater to the requirements of the steel sector.”

During April-September, Coal India produced 230.06 million tonnes coal of which coking variant comprised less than 10 per cent.

Source : Business Standard
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US Steel Canada is closer to being sold - Report

Talk Radio reported that US Steel Canada is closer to being sold. The process of selling US Steel Canada is moving ahead.New York investment fund Bedrock Industries has a memorandum of understanding with the Ontario government. The court appointed bankruptcy monitor is calling that a significant step toward a resolution for the steelmaker.

The latest analysis of US Steel Canada’s performance shows August was a good month for the steelmaker. The report to the court appointed bankruptcy monitor shows the company made 30.7 million dollars before taxes. That is well up from August of last year when it made 1.4 million.

The report said that the increase is mostly from orders placed earlier in the year. It also said that the rest of the year is not looking as good, with a weakening of orders in August and September due to a softening economy overall.

US Steel Canada has been under creditor protection for two years. That order is set to expire November 30, but extensions are almost always granted.

Source : Talk Radio
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Congressman Mr Visclosky testifies at US ITC for tariffs on steel pipes
NWI Times reported that US Congressman Pete Visclosky, D-Merrillville, has been pushing for more steel tariffs and more enforcement of new trade laws aimed at preventing steel dumping. Mr Visclosky testified last week before the International Trade Commission for the seventh time this year, this time for tariffs on circular welded carbon-quality steel pipe.

He said “As you are well aware, the steel import crisis is perilously threatening the livelihoods of the dedicated workers in steel communities throughout our nation. The recent influx of illegal steel imports has prompted the initiation of nine steel trade cases, and today I am testifying here at the ITC for the seventh time this year. It is my sincere hope that as the weather turns and we end the summer of steel, we can move forward now into the fall of fair trade."

He added "And while it is currently made in a variety of locations across our country, including California, Missouri, Ohio, Illinois, and Pennsylvania, I deeply regret that it used to be made in additional plants in Illinois and Pennsylvania, as well as in plants that are now idled or closed in Arizona and Iowa. It is past time that we send the message to the countries involved in this case, and all countries around the world, that we will not tolerate illegal steel imports."

Mr Visclosky, Vice Chairman of the Congressional Steel Caucus and Chairman Rep Mr Tim Murphy, R-Pennsylvania, also sent a letter to the ITC urging that it enforce new trade laws on steel imports coming in from Oman, Pakistan, the United Arab Emirates, and Vietnam. The new trade laws, the first passed by Congress in years, enable the federal agency to initiate investigations against steel dumpers and use real-time economic data to calculate economic injury.

Source : NWI Times
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Tokyo Steel keeps steel H Beam prices unchanged for November delivery

Reuters reported that Tokyo Steel Manufacturing Co Ltd would keep product prices unchanged for November delivery, reflecting lacklustre demand at home. Tokyo Steel's pricing strategy is closely watched by Asian rivals such as South Korea's Posco and Hyundai Steel Co and China's Baoshan Iron & Steel Co that export to Japan.

The company will keep prices for its main product, H-shaped beams used in construction, at JPY 65,000 (USD 631.70) per tonne and prices for steel bars, including rebar, at JPY 47,000 a tonne. The company cut product prices by up to 13% for October.

Mr Kiyoshi Imamura MD of Tokyo Steel told reporters that "The last month's price cut has helped diminish market speculations that prices would go further down, but overall demand is not resilient enough to bolster prices on Monday.”

Mr Imamura added that local demand is expected to improve late this year or early next year as construction for the 2020 Summer Olympic Games and redevelopment projects in the Tokyo metropolitan area are set to start next summer.

Source : Reuters
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Essar Group to scale up business in steel and power sectors - Report

Business Line reported that riding on assets sales across its real estate, oil refining and business process outsourcing businesses, Essar Group is set to reduce its overall debt from USD 14 billion to USD 6-7 billion over the next few months giving breathing space to scale up its businesses in steel, power and ports sectors.

Back in 2007-08, at a time when the UPA-led Government was at its peak and the economy showing signs of a strong growth, Essar Group made a USD 18 billion bet to expand their operations spread across steel, power, ports and oil refining. The plan was an aggressive one taking the Group’s assets from USD 6 billion in 2007 to USD 20 billion in 2015 and revenues from USD 5.5 billion to USD 27 billion.

During this period, the Group built capacities across its businesses. Its steel business went up from 4.6 million tonne per annum to 14 million tonne per annum, power capacity was up from 1015 MW to 4675 MW, refining nearly doubled from 10.5 million tonne per annum to 20 million tonne per annum and ports business tripled from 40 mtpa to 140 million tonne per annum. To do this, the Group pumped in USD 12 billion equity and USD 14 billion debt.

But somewhere in 2012-13, things started going wrong for the business. Largely hit by changes in regulatory environment and overall weakening of sentiments due to scam-hit UPA Government, Essar started losing momentum.

For example, in the steel business, non availability of committed natural gas, the main feedstock, coupled with high import prices, resulted in over 50 per cent of steel plants’ capacity idling. Delays in environmental approvals and Naxalite activism caused disruptions in the slurry pipeline that would bring the iron ore into the plant.

Similarly, in the power business, the Group’s Mahan and Jharkhand (2400 MW) plants have been impacted because of the cancellation of the allocated coal mines.

Source : Business Line
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European steel bosses call for more protection to ailing steel sector in EU

City AM reported that more than 50 European steel company bosses have written to the EU calling on the organisation to do more to protect the flailing industry and protect it from the ongoing glut of cheap Chinese imports. The chief executives of ArcelorMittal, Tata Steel Europe and German steel giant ThyssenKrupp were among 58 company heads that have urged the EU to beef up its trade defences to ensure the sector and its value chains flourish, investment continues, and the jobs of men and women who work in our sector are sustained.

On China's ongoing bid to gain market economy status, the bosses stipulate the EU should alter its anti-dumping regulation to align more closely with US rules, which refuse any status that allows dumping.

In the open letter, published ahead of a meeting of the European Council on 20 to 21 October, the steel chiefs also called for changes that would make the EU Trade Defence Instruments quicker to deploy and to reform the organisation's emissions trading scheme to ensure there is not a cost burden "beyond economic and technological feasibility".

The European steel industry has struggled to stay competitive in recent years due to a hit from the financial crisis and a flood of cheaper, Chinese steel that has entered the market.

Source : City AM
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South Africa domestic demand for steel products dips 3% - SEIFSA

IOL reported that according to the former president of the Steel and Engineering Industries Federation of Southern Africa Ms Angela Dick, domestic demand for metals and engineering products is estimated to have contracted by 3% during the course of this year. The waning demand points to the extent to which the sector, which contributes 3.3% to the country's gross domestic product, has struggled to recover from the global financial crisis of 2008.

Ms Dick in Seifsa’s latest annual report said that “Distressingly, the fortunes of the metals and engineering sector did not improve during the year ended June 2016. There is talk that the country is de-industrialising. This is a fallacy, however. Manufacturing and the metals and engineering sector’s share of the economy is indeed shrinking because other sectors of the economy are growing faster.”

She said that demand for the steel and engineering sector’s products peaked during 2013 and declined by 10% in 2014. The demand also grew by 8% last year. Production by local companies declined for the second year running.

Ms Dick said that “The result has been that domestic producers continued losing market share in their own market, from about 50% in 2013 to just 43% this year. This, in turn, means ZAR 50 billion worth of production lost and, with the current sector employment multipliers, an estimated 40 000 jobs lost.”

She said an estimated 25 000 people lost their jobs in the sector last year. This makes for frightening reading, at an average company size of 50 employees, these numbers translate tragically into 500 companies ceasing to exist.

Ms Dick further said that domestic costs had also risen substantially. A large proportion of the sector’s costs were linked to the dollar prices of input and administration costs.

Source : IOL
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