Carbon steel from cold ferrous feed

Summary of submissions

Three submissions were received around carbon steel from cold ferrous feed.  Two submitters identified the production of cast iron as being similar to that of carbon steel.  Carbon steel is defined as having less than 2 percent carbon content, where as cast iron has a greater than 2 percent carbon content.

Other than the above, there were no suggested changes to the activity definition.

Summary of analysis

Analysis into the distinction between the carbon steel and cast iron determined that they are two distinct products, which are not substitutable.  Whilst they have similar inputs (being various types of cold ferrous feeds), there are some minor distinctions in the process as well.  This lead to the recommendation to consider cast iron (with greater than 2 percent carbon content) as a separate activity from carbon steel.

Matter Analysis
The requirement to define each activity by reference to a physical, chemical or biological transformation of inputs into outputs. The proposed activity definition is consistent with this matter.  The activity description is expressed as a physical and chemical transformation of inputs into outputs.
The undesirability of activities being defined by reference to the technology employed, the fuel used, the age of the plant, or the quality of the types of feedstock used when the activity is carried out. The proposed activity definition does not reference technology, fuel used, age of plant, or the quality of the feedstock.
The desirability of defining activities:
  • consistently and equitably across industries.
  • in a way that takes into account the impact that definitions may have on business investment, geographical location, and the structure of activities.
  • in a way that takes into account the potential for intermediate inputs produced when the activity is carried out to be substituted for bought-in inputs.
 The proposed activity definition is consistent with this matter.
The desirability of there being no overlap between activity definitions. The proposed activity definition does not overlap with other activities.
Any other matters the Minister considers relevant, including activity definitions proposed to be used in Australia. The proposed activity definition reflects the activity definition for production of carbon steel from cold ferrous feed in Australia.

Recommendation

Officials recommend that only one minor change is made to the carbon steel from cold ferrous feed activity definition as drafted by the Australians.  This is to remove the use of the term “continuously” from the reference to cast carbon steel products and remove the phrase “ingots of carbon steel” as these are included in the broader phase of “cast carbon steel products”. 

Last updated: 10 May 2010