Articles in Category: Anti-Dumping

Zinc, lead and tin all hit multiyear highs this week and the Organization of Petroleum Exporting Countries finally agreed on a production — with its own members and Russia — to cut back production so oil prices are up, too.

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We were already in a metals and commodities bull market before the beginning of the week but it’s now more like a bull stampede. They’re even running in India. Lead Forecasting Analyst Raul de Frutos notes that this bull market is particularly unusual because it coincides with a strong U.S. dollar. Since commodities are valued in dollars it’s odd that they’re both up — and rising — at the same time.

MetalMiner co-founder and editor-at-large Stuart Burns also chimed in with vexing information, noting that tin is up while there seems to be abundant to robust supply of the stuff in the Earth’s crust with stable nations and reliable companies set to mine it.

Bulls stampeding in a Madrid sculpture

Don’t get stuck under these guys in the rush to get into this market. Source: Adobe Stock/Kyrien.

So, supply and demand aren’t fueling tin’s rise and that’s likely true for other metals as well. “New money,” as they say, is flowing into metal markets as investors are excited about Chinese construction demand and the prospect of a still nebulous $1 trillion infrastructure plan here in the U.S. China is, once again, driving the demand boat as the U.S. consumes only about 8% of commodities worldwide and the People’s Republic consumes the most. Read more

The Department of Commerce, late yesterday, placed import duties on carbon and alloy steel cut-to-length plate from Brazil, South Africa, and Turkey.

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For the purpose of anti-dumping investigations, dumping occurs when a foreign company sells a product in the U.S. at less than its fair value.

In the Brazil investigation. Commerce found dumping has occurred by Companhia Siderurgica Nacional and Usinas Siderurgicas de Minas Gerais SA, at a final dumping margin of 74.52%. The dumping margin for the mandatory respondents was based on adverse facts available (AFA) they did not cooperate in the investigation. Commerce established a final dumping margin of 74.52% for all other producers/exporters in Brazil.

In the South Africa investigation, commerce found dumping occurred by Evraz Highveld Steel and Vanadium Corp., at a final margin of 94.14%. They also did not cooperate in the investigation. Commerce calculated a dumping margin of 87.72% for all other producers/exporters in South Africa.

In the Turkey investigation, Commerce found dumping occurred by Ereğli Demir ve Çelik Fabrikalari T.A.Ş., at a dumping margin of 50%. It, too, did not cooperate in the investigation. Commerce calculated a final dumping margin of 42.02% for all other producers/exporters in Turkey.

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As a result of the final affirmative determinations, Commerce will instruct U.S. Customs and Border Protection (CBP) to collect cash deposits equal to the applicable weighted-average dumping margins.

Subsidies given by the U.S. state of Washington to Boeing are illegal under international trade rules derived from the General Agreement on Tariffs and Trade (GATT), the World Trade Organization said on Nov. 28.

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It was a victory for rival aircraft maker Airbus and the European Union. The ruling from a WTO panel is the latest blow in a drawn out trans-Atlantic battle between the aviation industry’s two titans, which has seen both Airbus and Boeing score points along the way.

In the decision, the WTO said that subsidies set up by Washington state to support production of Boeing’s 777X commercial jet, were “prohibited” as they encouraged the use of domestic materials, fueling unfair trade distortions.

The panel called  for the subsidies to be withdrawn within 90 days.

Airbus was represented by the European Union in the case while the U.S . federal government fought for Boeing and Washington state because companies and regional authorities are not represented at the Geneva-based WTO.

Potential Tata, Thyssen Merger Could Shutter Half of Port Talbot

Tata Steel and Thyssenkrupp AG are looking at reducing the size of Britain’s largest steel plant in Port Talbot, Wales, industry sources told Reuters, as the two firms press ahead with merger plans for their European steel operations. The plan would also deal with the overcapacity afflicting the industry.

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The move could see one of Port Talbot’s two blast furnaces shut, halving the plant’s capacity. Up to 4,000 people are employed at the site.

The Commerce Department has placed countervailing duty investigation of imports of finished carbon steel flanges from India.

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A countervailable subsidy is financial assistance from foreign governments that benefits the production of goods from foreign companies and is limited to specific enterprises or industries, or is contingent either upon export performance or upon the use of domestic goods over imported goods.

Commerce calculated preliminary subsidy rates of 2.76% and 3.66% for mandatory respondents Norma (India) Ltd., its three cross-owned affiliates, and RN Gupta & Company Limited, respectively. Commerce established a preliminary subsidy rate of 3.21% for all other producers/exporters in India.

Industry Groups Still Challenging EPA Mercury Rule

The U.S. Environmental Protection Agency‘s additional, court-ordered justification of its rule limiting mercury and other toxic emissions from coal-fired power plants fails to show how the rule’s benefits outweigh its compliance costs, states and industry groups fighting the revamped rule told the D.C. Circuit on Friday.

What a possible infrastructure plan from President-elect Donald Trump might look like started to emerge this week. It involves public-private partnerships with the private dollars promised in exchange for tax credits and like much of what our soon-to-be-president does it’s yuuuuge at an estimated $1 trillion.

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The markets — including metals — responded favorably. Even the U.S. dollar and metals prices abandoned their usual inverse correlation as both increased. The Dow Jones Industrial Average hit its highest level since 2011, even.

Are aluminum slabs welded together really "deep-processed extrusions?"

Are aluminum stockpiles related to China Zhongwang?

While we were celebrating what we think is certain deregulation and a better business environment to come here in the U.S., our own government was doing some regulating of its own. The Commerce Department is still investigating China Zhongwang for allegedly selling Aluminum 5050 alloy products that make no sense just to avoid anti-dumping and countervailing duties orders.

A Simple Mistake? Or a Sophisticated Aluminum Scam?

China Zhongwang Spokeswoman Harriet Lau said the company only provided the product, which the company doesn’t normally sell, because their U.S. distributor requested it and that they made and shipped very little of it. The customer is always right, right? Wrong.

Now China Zhongwang’s proposed acquisition of U.S. aluminum company Aleris — a company that would love to be acquired by a multinational rather than an investor looking to make a quick buck on a turnaround — is in doubt.

Hey, Remember that Transpacific Trade Partnership?

Further cementing how difficult free trade between countries with disparate economic systems can be, the Trans-Pacific Partnership between the U.S. and 12 countries is dead for the short term and maybe permanently. China wasn’t a signatory to TPP but now that the U.S. and its allies are out of the way, the People’s Republic is stepping into the vacuum to try to woo the former Asian suitor nations to a new pact with China while leaving out the U.S., Canada, Australia and others.

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So, what could have been U.S.-style intellectual property and trading rules could very much be Chinese-style economics if a different deal is reached. Is this the price of anti-globalization?

One Chinese aluminum company above all others seems to have stirred up controversy in the North American market.

China Zhongwang has been cited in a Department of Commerce preliminary determination that its shipments into the U.S.A. of aluminum alloy 5050 extrusions were an attempt to circumvent anti-dumping (AD) and countervailing duties (CVD) rulings on 6000 series extrusion alloys, a case that is ongoing.

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Now, the firm’s proposed $2.3 billion purchase of U.S. aluminum producer Aleris Corporation is embroiled in political objections after senators asked treasury secretary Jack Lew to launch a review of the deal.

China Zhongwang Speaks

In an interview with Harriet Lau of China Zhongwang Holdings in Hong Kong, MetalMiner sought the Chinese producer’s side of the story. Maybe not surprisingly, Lau refuted claims that China Zhongwang had tried in any way to circumvent AV/CVD regulations by shipping 5050 alloy into the US market. Read more

In a series of articles, we will be looking at globalization and the growing reaction against many of the consequences that free trade has brought, epitomized most recently by the election of Donald Trump as U.S. president on an anti-globalization ticket.

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One of several admittedly poorly detailed pledges Trump made was to save the U.S. steel industry by raising barriers against Chinese competition, perceived as unfair, state-supported dumping of excess production in the U.S. market.

Popular as Trump’s message was with many voters, his sentiments are not singular to the U.S. In Europe, steelmakers face sluggish growth and have struggled with overcapacity for years creating an environment in which even the most efficient have struggled to make money.

Hampered or supported by a political social contract to protect workers rights and employment — depending on whether you are a producer or a worker — every job loss has been resisted and delays in restructuring have dragged out the pain for everyone. In such an environment, even the usually patient Europeans have finally snapped and, spurred by popular opposition to free trade, have started to ramp up action against imports seen as unfairly priced or which are believed to circumvent World Trade Organization rules.

Europe Circles in on Vietnam

A recent Reuters report covers the European Union’s anti-fraud office (OLAF) investigations into whether Chinese companies shipped steel through other countries, known as transshipment to avoid anti-dumping duties.

Apparently, OLAF is looking into several cases where Chinese steel firms shipped the metal to another country, disguised its origin, and then shipped it on to Europe to avoid duties or quota limits from the original producing country. As with the recent China Zhongwang case in the U.S., the transshipment country is again Vietnam. OLAF is investigating 190 shipments of Chinese coated steel coils that arrived in Portugal, Spain and Poland from Vietnam in 2013-2014, the news wire says.

OLAF estimates the shipments via Vietnam were worth about $19 million and that the steel was given Vietnamese certificates of origin, the Vietnamese trade ministry said on its website, and it should be said Vietnamese authorities are cooperating with the E.U. in investigating these allegations.

If confirmed, OLAF would apply retroactive duties of 58% on the shipments and the Vietnamese fear it could impact bona fide shipments from the country, if not with automatic duties then with greater scrutiny and control.

Normal Enforcement?

Action taken against countries that break WTO or trade rules is a long way from anti-globalization. The most free-market orientated countries would be foolish to not ensure their trade partners adhere to the rules.

Steel is the second-largest industry in the world after oil and gas, with an estimated global turnover of $900 billion. As Reuters points out, steelmakers face sluggish demand growth, chronic overcapacity and poor profitability, problems that a flood of Chinese steel allegedly sold at a loss has made far worse than it should be.

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Yet, in spite of repeated claims the country intends to close capacity — even though it has closed 150 million tons this year — China’s steel output rose for a seventh straight month in September and its exports are on track to beat last year’s record of 112 million metric tons.

The country has not, until now, seen its exports as a problem, but as it gradually gets shut out of overseas markets it may finally dawn on China that they cannot allow their steelmakers to simply export their excess capacity, whether it is being done profitably or dumped at below cost, their trade partners are rapidly losing patience.

PriceAlan_150_110616Following this week’s historic election, many eyes will be on the new administration’s focus on international trade. Alan H. Price, partner and chair of Wiley Rein LLP’s International Trade Practice is a leading lawyer in the U.S. and abroad on international trade remedy and trade policy issues. We recently had a quick e-mail discussion with him on how the Trump Administration will view international trade and the implications of the presidential election.

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Jeff Yoders: President-elect Trump’s trade policy has looked protectionist on the campaign trail. What will that mean for U.S. trade?

Alan Price: The Administration of President-Elect Donald J. Trump may result in aggressive action on international trade issues, especially against China. Some companies will agree with such measures, and some will disagree.

With the election of Trump, ratification of the Trans-Pacific Partnership (TPP) is now unlikely in the short or medium term.

On China, Trump will look at potential currency manipulation, and will look to increase tariffs on China, potentially using our national security laws.

JY: What about immigration and the wall Trump has promised along the southern border between the U.S. and Mexico? And trade within the hemisphere?

AP: Regardless of the “wall” that Trump has promised to build between the U.S. and Mexico, he will try to renegotiate portions of the North American Free Trade Agreement (NAFTA)—and possibly other trade deals.

The Trump Administration should be favorable for new trade remedy cases, especially against China, and may even self-initiate cases in some circumstances.

JY: When it comes to domestic trade, Trump has promised to punish U.S. companies that outsource jobs. How would that even work?

AP: Trump’s trade agenda may include efforts to “retaliate” (through taxes, etc.) against U.S. companies that move operations abroad. His administration may also reexamine the role of the U.S. in the World Trade Organization (WTO), especially with respect to dispute resolution. There is great concern about U.S. laws being challenged and overturned by adverse WTO rulings, in areas where the U.S. never agreed to give up its economic sovereignty.

 

The Department of Commerce placed preliminary anti-dumping duties on imports of carbon and alloy steel cut-to-length plate (CTL plate) from nine countries. Some of the tariffs were as high as 130.63%.

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Anti-dumping laws provides U.S. businesses and workers with a transparent, quasi-judicial, and internationally accepted mechanism to seek relief from the market-distorting effects caused by injurious dumping of imports.

Austria

In the Austria investigation, Commerce preliminarily found that dumping has occurred by the sole mandatory respondent Bohler Edelstahl GmbH & Co KG, Bohler Bleche GmbH & Co KG, Bohler International GmbH, Voestalpine Grobblech GmbH, and Voestalpine Steel Service Center GmbH (collectively, Voestalpine) at a preliminary dumping margin of 41.97%. Read more

UPDATE: Ruling from Commerce detail on 5050 aluminum extrusions now included in this post.

The Department of Commerce is expected to launch a formal investigation today into whether Chinese steel companies are shipping steel through Vietnam to avoid U.S. import tariffs, a person familiar with the matter told the Wall Street Journal.

Steelmakers Asked for Vietnam Investigation

The decision to investigate follows a complaint in September from U.S. steelmakers, and is an escalation of U.S. efforts to stop a glut of China-made metal from flooding U.S. markets. The inquiry could result in new tariffs on steel imported from China via Vietnam, under rules designed to prevent such a tariff-evading practice, known as circumvention. Read more