Network Metals LLC

We have been hearing reports that China is planning on cutting the 20% export tax on ferrochrome and ferromanganese in 3Q09. As we have been talking about recently, the Chinese government is doing everything in its power to keep domestic smelters functioning and as many people employed as possible, and this potential decrease in the export tax for ferrous metals should help domestic smelters further. Steel production is down domestically in China and prices are low, so exporting the metals for steel production outside the country will keep the smelters functioning at least until domestic demand foe steel picks up to higher levels. Even still, Chinese ferroalloy output is expected to decline this year, according to Sinosteel, in line with the destruction of steel demand.