Kalistani Major History

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Kalistan announces removal of restriction on Steel Production
KALNAFERCO expected to exceed Republican usage by 235 Percent in 4901
Sulari, Suldanor
January 3, 4901


Steel Coil Warehouse north of Sulari begins to fill up with 80" Banded Coils

Kalistan's Nationalized Steel Industry, KALNAFERCO has officially removed restrictions on production of Kalistani Steel in an effort to attract more international purchasers, Trade Minister Michelle Martinez announced yesterday. "With the near doubling of the outdated production capacity in Suldanor last year, and the slow modernization of our existing physical plant near Sulari, The Republic has decided to begin to make a bid for the lucrative international Markets which have been dominated henceforth by nations like Yingdala, and which are becoming more and more crowded each day as new nations join the Steel Export Market."

The Trade Minister announced that in the second quarter of last year, before Steel Dynamics opened in Sulari, the Kalistani Steel industry was operating at about 32% capacity, producing roughly 18 Million tonnes a year. With the opening of Steel Dynamics, which essentially doubled Republican production capacity, the existing production capacity usage dropped to about 15 percent. "Our aim is to operate at about seventy five percent capacity, which will bring our total annual production up to close to ninety million tonnes, and then use our price point advantage to attract new buyers to KalNaFerCo steel."

The news of the dramatic increase in steel production sent six month commodity futures into a nosedive in the Kalsie this morning. "KalNaFerCo is a not for Profit corporation," said Martinez. "So we can significantly undersell whatever price the capitalist nations have to sell their steel at, given that we do not need to make a profit, or even acknowledge international steel market price manipulation. The Spot price of steel is what steel manufacturers are trying to get out of their commodities, and they have as much influence in the price as the buyers of the commodity futures do. But Kalistan can afford to sell at perhaps even a discount of 20 percent from that Spot price, without losing money."

Evidence of early overproduction is available: The National Storehouse in Sulari, which is a clearinghouse for both Pig and refined iron, as well as rolled iron, from both Hot and cold mills, is currently operating at 60 percent capacity, and there is a building movement in the immediate vicinity to dramatically increase storage capacity as the finished steel awaits sale. Investors expect that the price of steel domestically and internationally will drop significantly and as storage fills up, the cost per ton will continue to drop over the coming year.

"We expect that this will cause some dislocations in countries who cannot afford to produce steel as inexpensively as Kalistan does, but this is not our concern. If we can offer the same or better quality than substandard steel produced at scale in Yingdala, or the new industries elsewhere, then we would advise them to drop the capitalist production models that govern their economy and adopt a not for profit model. Or, as we would prefer, they switch their productive resources to something they posess a competitive advantage in, and leave the Steel production to KalNaFerCo. Either way, whatever the best price that our major competitors will offer, we will offer our product at at least a 10% discount, for the foreseeable future."

Liberal economists who speak in the papers have already decried the announcement as a declaration of economic warfare. "This is dumping, pure and simple, "said Dr. Tabitha Jones of Vrassa District University. "What our government is doing is manipulating the market, without regard for the economic consequences this will have for the industries in properly organized capitalist countries, who are content to let the invisible hand of the market efficiently set the price of its commodities. It is not fair that our socialist economy, which has proven time and time to have no regard for the iron rule and essential morality of the market, is able to offer steel from a nationalized industry that is able to underprice against capitalists, and at the risk of appearing to cheer for the capitalists, let me be explicit: Socialism is evil and can never do a single good thing for any single individual except the powermongers in charge." When asked if Jones felt her words were inflammatory, she simply laughed, and answered, "No more insulting or inflammatory than the policies of the Socialist Party of Kalistan, and if they have a problem with it, I expect I will never see these words in print, and will be disappeared soon..." (At press time, Dr. Jones was still in her position and admitted that no reprisals had come upon her, "... yet" she added.)

As commodity futures continue to fall in the Kalsie, the Republic now set in for a possible hostile response from other steel producing nations.