Articles in Category: Exports

We had a chance to sit down and discuss the issues facing members of the Steel Manufacturers Association with SMA President Philip K. Bell at the recent S&P Global Platts Steel Markets North America conference here in Chicago. Bell also currently serves on the  Department of Commerce International Trade Advisory Committee on Steel (ITAC 12), advising the Secretary of Commerce and United States Trade Representative on trade policy, trade agreements, and other trade related matters that benefit U.S. businesses, workers, and the economy.

Philip K. Bell

Philip K. Bell. Source: SMA

Jeff Yoders: We’ve heard a lot about North American Free Trade Agreement and what changes to it might mean in the last two days. How do your members feel about reopening NAFTA to changes?

Philip K. Bell: NAFTA is over 20 years old and it’s probably time to look at it again. A lot has changed over the last two decades. We hope the approach that the administration takes is one that’s more methodical and takes into account that not only are Canada and Mexico two of our biggest trade partners but, when it comes to the steel industry, they ARE our two largest trade partners.

There is a lot of integration in this area. You have a lot of steel producers that either have businesses in Mexico such as Gerdau, ArcelorMittal and Nucor — through its joint venture JFE — and you have a lot of companies that want to do business there like Steel Dynamics which is hoping to increase its presence in that market by importing flat-rolled into Mexico. Read more

Chinese steel exports tumbled to a three-year low in February, customs data showed last week, lower than expectations, as steelmakers in the world’s top producer shifted to meeting rising demand at home.

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Shipments for the month were 5.75 million metric tons, the lowest since February 2014, data from the General Administration of Customs showed. It was down 29.1% from a year ago and down 22.5% from January.

Duterte Wants Mining Compromise

Philippine President Rodrigo Duterte said recently he hopes there will be a “happy compromise” between the mining industry and protecting the environment, throwing support to Environment and Natural Resources Secretary Regina Lopez will appear before Congress ahead of her confirmation hearing. Lopez is under pressure because she has closed nearly half the nation’s mines.

German Dominguez

German Dominguez

There’s been a lot of talk about President Trump’s “border tax” lately as it relates to reshoring manufacturing to the U.S. and financing “great, great” border walls, and my colleague Jeff Yoders has done a bang-up job covering the gamut of the Trump administration’s proposed policies in general.

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On our sister site Spend Matters, we tried to get closer to the bottom of the whole south-of-the-border tax issue, which opened up a can of worms — and devolved into golf analogies.

But what does it all mean for U.S and Mexican manufacturers and their future strategies?

Q&A With German Dominguez, Independent Advisor and LatAm Sourcing Expert

We caught up with German Dominguez, an independent sourcing advisor helping U.S. manufacturers to best-cost-country-source direct materials where it is most advantageous in Latin America, mainly within The Pacific Alliance region (Mexico, Colombia, Peru and Chile) — the largest emerging markets economic bloc in Latin America. Read more

The Trump administration is developing a national trade policy that would seek to diminish the influence of the World Trade Organization in the U.S. and champion American law as a way to take on trading partners it blames for unfair practices, according to a draft document reviewed by The Wall Street Journal.

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In his speech to a joint session of Congress Tuesday night, Trump said he wouldn’t let American workers and businesses be taken advantage of. “I believe strongly in free trade but it also has to be fair trade,” he said.

The Trump administration’s trade policy is forming. Source: Adobe Stock/Argus.

Some business groups and republicans who back traditional trade policy have hoped the new administration would moderate its most aggressive policy proposals to protect U.S. industries.

Departure From Previous Trade Policy

However, the policy contained in a draft document due to be published any day now, represents a dramatic departure from the Obama administration, which emphasized international economic rules and the authority of the Geneva-based WTO, an international body that regulates trade and resolves disputes among its members. Armed with what it sees as a broad mandate, the administration is moving forward with rules that would favor U.S. law over the conflict resolution mechanisms of the WTO. Read more

An Indonesian Finance Ministry official said the government may not be done tinkering with export tax rules involving raw ore just yet. The island nation’s Energy and Mineral Resources Ministry partially lifted a ban on raw ore exports late last week.

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“We want the export duties to push domestic processing. That’s the principle,” Suahasil Nazara, head of the Fiscal Policy Office at the Finance Ministry, told reporters, adding that the taxes were “not just for increasing state revenues. There’s a high possibility we will continue with a scheme that has layers, depending on completion of smelters.”

Outokumpu Adds to North American Stainless Rebar Line

Outokumpu recently unveiled a new stainless rebar offering for the North American market at the World of Concrete trade show in Las Vegas.

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Following an expansion of its stainless rebar capabilities at its facilities in Richburg, S.C., Outokumpu will now sell stainless rebar in coil, cut-to-length or in bent shapes. The Richburg facility has capabilities to cover a full range of rebar dimensions between sizes #3 and #8 (from .375 inches to 1 inch) and lengths up to 60 feet, and will offer short lead times for customers in North America.

Indonesia issued significant new mining rules last Thursday that will relax its ban on exports of nickel ore. Over the weekend, I went to check analysts’ opinions on this new development. Not surprisingly, almost everyone thinks this is bearish news for nickel prices.

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I am often a contrarian and this time, of course, I have a different opinion. I think the outcome of this revision is bullish for prices. What’s more, I think this is a great opportunity to buy nickel since prices might trade above today’s levels for the rest of the year.

Indonesian Nickel Ban

Before we get to analyze the price impact of the new rules, let’s quickly review what the ban was about in the first place:

Indonesia imposed an export ban for unprocessed material — essentially raw ore — back in 2014. A year before the ban kicked in, Indonesia exported around 60 million metric tons of nickel ore. Nickel ore contains an average of 1 to 3.5% of nickel. Indonesia banned exports to encourage downstream investment as this would eventually be better for the country, as it would generate more revenue as the material is processed domestically and it would build a local processing industry. Read more

Indonesia introduced new rules last week that will allow exports of nickel ore and bauxite and concentrates of other minerals under certain conditions in a sweeping policy shift by the key global supplier, Reuters reported.

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A ban on unprocessed ore exports was imposed in 2014 to, the thinking went, encourage investment in mills and smelters in the islands. The government of Southeast Asia’s biggest economy has faced a hefty budget deficit since and missed its 2016 revenue target by $17.6 billion.

The resumption of shipments may have been drafted to help stop the gap.

The new regulations, which took effect on Wednesday, sent nickel prices tumbling more than 5% to a four-month low of $9,660 a metric ton before they recovered.

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The rules include broad changes to permit extensions, which may now be applied for up to five years in advance of expiration, as well as new divestment requirements.

A massive stockpile of 500,000 metric tons of aluminum has been trucked out of the Mexican city of San José Iturbide and shipped to a remote port in Vietnam, according to shipping records and people familiar with the matter.

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The Wall Street Journal reports that the stockpile is believed to be related to or entirely the product of Chinese aluminum producer China Zhongwang. As a result of moving the massive stockpile, Vietnam has become a major importer of aluminum extrusions this year.

Preliminary Steel Exports Down

Based on preliminary Census Bureau data, the American Iron and Steel Institute reported that the U.S. imported a total of 2,682,000 net tons of steel in October, including 2,225,000 nt of finished steel (down 3.4% and up 4.7%, respectively, vs. September final data).

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On the year-to-date (YTD), through 10 months of 2016, total and finished steel imports are 27,486,000 and 22,017,000 nt, down 19% and 19.8%, respectively, vs. the same period in 2015. Annualized total and finished steel imports in 2016 would be 33.0 and 26.4 million nt, down 15% and 16.1%, respectively, vs. 2015. Finished steel import market share was an estimated 26% in October and is estimated at 25% on the year.

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.

Have you brought your metals suppliers into the digital economy? Would you like to?

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Tracking shipments, confirming delivery schedules and knowing when rail, ship or road bottlenecks are affecting your materials supply chain can give you the time and cost certainty you need to run your business more efficiently.

Are your suppliers part of a proprietary supplier network? From an overall digitization perspective, asking suppliers to join a proprietary supplier network in today’s world, especially for the complicated metals supply chain, would be like giving them a model T to get from point A to point B on today’s complicated interstate highway system.

For manufacturers, the metals supply chain can involve international freight, financial risk management, logistics and technical expertise. Yet many suppliers still aren’t optimizing the technologies to track, hedge, ship and manage your metals purchases that are available today.

What does readying your suppliers for the digital economy really require? Join Jason Busch from Spend Matters and Marco De Vries, Senior Director, OpenText Business Network, as they discuss and debate the topic. They’ll explore a range of topics and their impact on procurement and supply chain transformation: The Internet of Things (IoT), peer-to-peer, the sharing economy, AI/machine learning, platform business models, social collaboration, blockchain and more.

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Tune in Thursday, November 17th at11:00 AM Eastern (10:00 AM Central and 4 PM U.K.). The even will be available On-Demand after the day of recording. Register Now!