Articles in Category: Company News

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This morning in metals, the Aluminum Extruders Council praised the Department of Justice for its allegation that Zhongwang and its affiliate illegally evaded $1.5 billion in tariffs, Tokyo Steel is raising its prices and hedge funds are high on the metals industry.

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DOJ Alleges Zhongwang, Affiliate Illegally Avoided $1.5B in Tariffs

The Aluminum Extruders Council applauded the U.S. Department of Justice late last week, praising it for its allegation that China Zhongwang and an affiliate eluded $1.5 billion in tariffs while smuggling aluminum pallets into the U.S.

“We want to applaud the Department of Justice’s decision to begin civil proceedings against Zhongwang’s affiliate Perfectus,” said Jeff Henderson, president of the Aluminum Extruders Council. “Today’s filing is the culmination of a concerted effort by the AEC and its members in conjunction with Customs and the Department of Commerce to investigate Zhongwang’s alleged attempts to avoid paying duties since the orders went into effect. The AEC will continue to assist the agencies in their efforts to investigate this matter going forward.

“Furthermore, this should be a clear signal to those that seek to evade, circumvent, or in any way violate our orders that such activities will be uncovered and prosecuted.”

According to the civil complaint in the Department of Justice investigation, California company Perfectus Aluminum Inc. is allegedly owned by Liu Zhongtian, founder and chairman of Zhongwang.

Tokyo Steel Ups Prices

Tokyo Steel announced its prices will be going up in October, Reuters reported.

The price hike, which is taking place for the second month in a row, comes as a result of higher prices overseas and a tight domestic market, according to the report.

Hedge Funds Feeling Metal

The hedge fund industry is feeling good about the future of the metal industry.

According to Reuters, hedge fund investment in the metals industry is at its highest since 2011.

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A major reason for the bounceback? A tightening of global supply, to a significant extent the product of China’s supply cuts.

China Zhongwang is a company that is used to controversy.

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Then again, you don’t get to be the world’s second-largest aluminium extruder in the space of a few years without ruffling a few feathers.

Zhongwang’s attempts to muscle in on the global stage by buying Aleris Corp immediately ran into opposition from U.S. senators. Just this week, Zhongwang USA, an investment firm backed by Zhongwang Group’s chairman and Aleris Corp, announced its intention to extend the deadline for a decision by two weeks to end September, Reuters reported.

Zhongwang USA is not part of Hong Kong-listed China Zhongwang Holdings Ltd, but Liu Zhongtian heads up both companies — a fact that has clouded multiple investigations against one entity or another in recent years.

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This morning in metals news, U.S. primary aluminum is still low despite an increase in prices, China Zhongwang Holding announced it had purchased a German aluminum producer and associations representing steel, soybeans and poultry were united by the issue of steel tariffs.

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U.S. Primary Aluminum Production

Aluminum prices have been on a steady climb in recent months, but primary aluminum production remains low, according to a report in Hellenic Shipping News.

In fact, since January 2015, the country’s primary aluminum production has dropped 50%.

Zhongwang Makes Investment

China Zhongwang Holding announced Wednesday that it is making an investment in a German aluminum producer Aluminiumwerk Unna AG, according to state-owned news agency Xinhua.

The value of the deal has yet to be disclosed, according to the report, but the acquisition is part of Zhongwang’s effort for an increased presence in the aircraft aluminum market.

Steel, Soybeans and Chicken

Associations representing steel, soybeans and chicken came together this week to express their belief regarding the potential negative impact of steel tariffs.

Platts reported that the American Institute for International Steel, the National Chicken Council and the American Soybean Association published a new report covering the impacts of steel tariffs on supply chains.

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The Trump administration’s Section 232 investigation into steel imports is ongoing. The probe, launched in April, has a January deadline for completion.

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This morning in metals news, raw steel production this year through Sept. 9 is up 3.3% compared with the same period last year, U.S. steel shipments in July fell by 3.3% compared with the previous month and Tata Steel‘s shares surged after the news regarding its separation from its U.K. pension scheme.

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Steel Production On the Rise

According to weekly data from the American Iron and Steel Institute (AISI), U.S. raw steel production for the week ending Sept. 9 amounted to 1,733,000 net tons.

The week’s production marked an 8.9% increase from the same week in 2016, but a 0.8% decrease from the week ending Sept. 2.

In the year through Sept. 9, however, production has hit 62,633,000 net tons, up 3.3% from the same period in 2016.

July Steel Shipments Dip From June Total

According to AISI data, U.S. steel mills shipped 7,480,241 net tons in July, a 3.3% decrease from the 7,736,846 net tons shipped in the previous month. The July total, however, marked a 1.7% increase from the 7,352,698 net tons shipped in July 2016.

The AISI report said shipments for the year-to-date are 52,939,327 net tons, up 2.8% increase versus shipments during the first seven months of 2016.

Tata Steel Shares Jump After Pension Scheme News

After settling its pension liability scheme in the U.K., Tata Steel shares jumped 3%, the Economic Times reported.

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As part of the agreement in which the Indian company separated the British Steel Pension Scheme from its U.K. business, Tata was required to make a payment of £550 million and offer a 33% stake in Tata Steel UK to trustees of the pension scheme, according to the Economic Times.

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Details are pretty sketchy at present, but a recent Reuters article sheds light on an investigation underway by Germany’s competition regulator into a suspected violation of antitrust laws in the steel industry.

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According to Reuters, the investigation expands an ongoing cartel office inquiry, which already covers makers and sellers of stainless steel, car manufacturers and suppliers, as well as companies in the forging sector.

The suspicion is of “anti-competitive collusion between companies” on flat steel products. Although not all steel firms are currently under investigation, many of the largest ones are.

Both ArcelorMittal and Salzgitter have confirmed units of their company have been searched in the first phase of an operation late last month that included seven companies and three private homes in Germany. According to the Reuters report, Manager Magazin reported that included in the investigation is the German Steel Federation, an industry association, although the publication did not cite any sources in its report.

Interestingly, any collusion may be limited. Kajor steel producer Thyssenkrupp and steel distributor trader Kloeckner & Co. both said they had not been searched, according to Reuters, nor is this part of a wider European Union action. Allegations appear to be restricted to several steel producers in Germany, although some of them, such as ArcelorMittal, are multinationals.

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This morning in metals news, a U.S. line pipe producing association is the latest group to urge President Donald Trump to act vis-a-vis Section 232, Tata Steel officially sheds a major pension liability and the U.S. once again invokes the possibility of withdrawing from the North American Free Trade Agreement (NAFTA).

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ALPPA Asks Trump Administration to Take Action

The American Line Pipe Producers Association (ALPPA) is the latest U.S. metals association to petition the Trump administration to take action regarding its ongoing Section 232 investigation.

The Trump administration launched Section 232 investigations into steel and aluminum imports back in April, and has January deadlines for both.

In a letter to the Trump administration, Timothy Brightbill, counsel to the ALPPA, wrote: “There is an urgent need for immediate Section 232 relief for the domestic large diameter line pipe industry. The large diameter line pipe industry continues to face a sustained surge in imports, largely driven by global overcapacity. Chinese producers are increasingly shipping greater volumes of dumped and subsidized steel to other countries for production of large diameter line pipe that can then be shipped to the U.S. market at lesser duty rates or, in many cases, duty free.”

Tata Steel Gets Rid of U.K. Pension Scheme

One major holdup in Indian steel giant’s merger talks throughout the last year has been its £15 billion U.K. pension scheme, The Telegraph reported.

After much effort, Tata has finally rid itself of the massive pension liability, which should make merger talks go a little more smoothly.

Ross Adds NAFTA Threat of His Own

As the U.S, Mexico and Canada continued NAFTA renegotiation talks earlier this month, Trump, on numerous occasions, has threatened to pull the U.S. out of the trade deal.

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On Friday, Secretary of Commerce Wilbur Ross further backed up the president’s comments about the 23-year-old trade deal, restating the president’s assertions that if a negotiated solution favorable to the U.S. can’t be reached, withdrawal is a serious possibility (if not a certainty).

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Metals and mining conglomerate Vedanta Resources seems bullish on India.

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Chairman Anil Agarwal recently announced his group was actively thinking of investing about U.S. $9 billion (around Rs 50,000 crore) to expand its business in the country.

Why? In an interview to, he said “this was the best time to invest in India,” proceeding to list out concrete reasons.

The Indian government’s reforms were one of them. Agarwal said bankruptcy law and Goods and Services Tax (GST) would help improve the business environment and act as a magnet for global investors.

Vedanta is a “biggie” in India’s zinc, aluminum and refined copper sectors, with market shares of 72%, 40% and 35%, respectively. It’s also one of India’s largest private sector iron ore exporters and it’s the operator of 26 percent of India’s crude oil production via Cairn India.

Agarwal’s recent announcement of his India plans advanced Vedanta Ltd’s shares by 1% when the markets opened last Monday.

In another interview, Agarwal said they were looking at investing U.S. $8-9 billion to expand capacity in oil and gas, iron ore, aluminum, and zinc by nearly 50 percent over the next few years. This will create 40,000 direct and indirect jobs.

Vedanta may be interested in picking up some of the “stressed steel assets” in India. Just last week, MetalMiner reported that one of India’s largest steelmakers, Essar Steel, which is battling bankruptcy, has potential suitors lined up for its assets — though most are unwilling to come on record for the time being.

One hangup in Agarwal’s plan could be the “retrospective tax.” For some time now, Cairns India and the Indian government have been at loggerheads over this tax. As the name suggests, this was a back-dated tax levied on some international companies, including a claim for about $2 billion from Vodafone, the British telecommunications company, which the government lodged in 2012 for capital gains tax it said was due from Vodafone’s 2007 purchase of CK Hutchison’s Indian business.

Mr Agarwal’s company was forced to hand over $104 million in payments as part of the Cairn dispute after buying Cairns India in early 2017.

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Now, in an interview to Financial Times, Agarwal has criticized some of the ministers in Prime Minister Narendra Modi’s government over this retrospective tax, and asked the government to settle the issue once and for all.

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This morning in metals news, U.S. steel production is up for the year, copper backed off its three-year high and a U.S. firm extended its merger deal with a Chinese company.

Steel Production Up 3.2%

According to data released by the American Iron and Steel Institute (AISI), U.S. raw steel production is up 3.2% in the year to date (through Sept. 2) compared with the same time frame in 2016.

Adjusted production through Sept. 2 amounted to 60,900,000 net tons, up from the 59,025,000 net tons last year to the same point last year.

For the week ending Sept. 2, domestic raw steel production was 1,747,000 net tons, up 8.6% for the same week in 2016 and up 0.4% from the previous week (ending Aug. 26).

Copper Falls Back

After hitting a three-year high, copper fell back slightly from that Wednesday.

LME copper fell 0.3% to $6,880 a ton by 0155 GMT, according to Reuters.

Staying Together

Aluminum and rolled products producer Aleris International extended a merger agreement with Chinese firm Zhongwang USA LLC, according to Platts.

The deal was extended to Sept. 15, according to the report. The deal was previously set to expire Aug. 31.

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One of India’s largest steelmakers, Essar Steel, which is battling bankruptcy, has potential suitors lined up for its assets — though most are unwilling to come on record for the time being.

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Korean firm Posco and India’s largest steel company Tata Steel are reportedly thinking of bidding for Essar’s stressed assets. The latter was among a dozen large companies that India’s central bank, the Reserve Bank of India (RBI), had identified to be taken to bankruptcy courts to help clean up the banking system that is saddled with stressed loans.

According to reports, Essar Steel, with a capacity of 10 million tons per annum, had about $6 billion of debt in the 2015-16 fiscal year.

Days after the Essar Group had concluded the sale of its oil business to Russia’s Rosneft for U.S. $12.9 billion, the Ruia family-controlled conglomerate’s metal business, too, seems to have attracted suitors, news reports here said.

Tata Steel may be looking at Essar Steel to get itself a better position in western India.

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This morning in metals news, positive Chinese economic data means good things for metals found in steel, a former Alcoa aluminum plant site in Tennessee is being redeveloped for a new purpose and copper demand from electric carmakers is set to surge in a big way over the next two decades.

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China Industrial Outlook Offers Boost

Postive indicators for Chinese industrial activity are yielding good news for steel-related metals, according to Reuters.

The official Purchasing Managers’ Index (PMI) jumped to 51.7 in August (from 51.4 the previous month), according to the report.

Alcoa Redevelops Old Plant Site

A former Alcoa aluminum plant site will soon be used for a new purpose.

According to a Knoxville News Sentinel report, the former Alcoa West Plant site in Tennessee will be lined with retail and office space.

Copper Cars

Certain metals will see their stocks soar as electric cars build momentum.

One of those metals, according to a report in The Street, is copper.

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Quoting a Bloomberg Intelligence analyst, the report says demand from electric carmakers could grow 6,100% by 2040.