Articles in Category: Ferro Alloys

While domestic grain-oriented electrical steel prices fell slightly this past month here in the U.S., the outlook for GOES globally looks bright.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

According to a recently released study from Future Market Insights, the GOES segment of the market 6 should grow by 7.5% in value in 2016 and 7.3% to 2026 due to increased demand from the energy and power generation industries.

GOES_Chart_October_2016_FNL

From a geographical perspective, North America, Europe and Japan all contribute to a strong market, however, the Asia Pacific region serves as the largest market by volume with China leading the charge.

Trade Cases

Despite the projected growth of GOES, many flat-rolled steel products have become subject to one form of trade case or another. Despite the anti-dumping duties imposed on China in the case of cold-rolled coil and other countries for hot-dipped galvanized, hot-rolled coil and others, when an exporting country receives a punitive duty, the flow of material merely moves to other exporting nations not identified in the specific trade case.

Two-Month Trial: Metal Buying Outlook

Steel prices have been in a steady decline since the beginning of August. At best, trade cases provide a few months of pricing power for domestic producers.

Two years have passed since AK Steel and Allegheny Technologies, Inc. brought their GOES trade petitions to the International Trade Commission. The ITC found the domestic producers “unharmed” by imports. The trade cases resulted in absolutely nothing for the domestic producers — ATI even shut down its GOES line. MetalMiner’s M3 MMI index and actual spot market coil prices have declined since 2014.

The GOES MMI® collects and weights 1 global grain-oriented electrical steel price point to provide a unique view into price trends over a 30-day period. For more information on the GOES MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.

For full access to this MetalMiner membership content:
Log In |

Tariffs were place on Chinese steel imported into the E.U. and the Commerce Department. placed more on phosphor copper coming into the U.S.

EU Tariffs on Chinese Steel

The European Union will impose duties on two grades of steel imported into the currency bloc from China to counter what it says are unfairly low prices.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

The duties are set at between 13.2 and 22.6% for hot-rolled flat iron and steel products and at between 65.1 and 73.7% for heavy-plate steel, according to a filing in the European Union’s official journal.

Anti-Dumping Duties on Phosphor Copper

Not to be outdone, The Department of Commerce placed tariffs on allegedly dumped imports of phosphor copper from the Republic of Korea yesterday.

Two-Month Trial: Metal Buying Outlook

Commerce found, preliminarily, that dumping occurred by mandatory respondent Bongsan Co. Ltd. by a dumping margin of 3.79%. All other producers from South Korea also received 3.79% anti-dumping duties. U.S. Customs and Border Patrol will now collect cash deposits upon import of the copper. The petitioner is Metallurgical Products Company of Pennsylvania.

The Commerce Department placed initial anti-dumping tariffs on imports of carbon and alloy steel cut-to-length plate (CTL plate) from Brazil, South Africa, and Turkey late Friday.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

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

n the Brazil investigation, Commerce preliminarily found that dumping has occurred by mandatory respondents, Companhia Siderurgica Nacional and Usinas Siderurgicas de Minas Gerais SA, at a preliminary dumping margin of 74.52%. The dumping margin for the mandatory respondents was based on adverse facts available (AFA) as a result of their failure to cooperate in the investigation. Commerce assigned a preliminary dumping margin of 74.52% for all other producers/exporters in Brazil. Read more

U.S. steel companies applauded as tariffs were upheld on hot-rolled steel flat products and the London Metal Exchange took a hit when it had to move its open-outcry trading to another location when its new office wasn’t ready this summer.

ITC Upholds Hot-Rolled Steel Tariffs

The U.S. International Trade Commission handed another victory to American steelmakers on Monday, affirming most of the recent anti-dumping and anti-subsidy duties on hot-rolled flat steel imports from Australia, Brazil, Britain, Japan, the Netherlands, South Korea and Turkey.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

The commission rejected anti-subsidy duties of about 6% against hot-rolled steel from Turkey, but affirmed anti-dumping duties of about 6 to 7% against Turkish-made hot-rolled steel. The rest were all upheld.

LME Trading Move Hit Volumes Hard by Move

The temporary relocation of open outcry trading at the London Metal Exchange (LME) to a disaster recovery site due to problems at its new offices hit volumes hard during the already quiet summer months, brokering sources said.

Two-Month Trial: Metal Buying Outlook

For all contracts traded on the LME, volumes fell more than 9% year-on-year in August to 12.18 million lots, after a drop of nearly 18% in July. Volumes for aluminum and copper fell nearly 22% and seven percent respectively in August from the same period a year ago.

Many grain-oriented electrical steel market participants know that macroeconomic drivers and general steel price trends often diverge from GOES trends.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

Comments from the most recent Steel Market Update summit at the end of August suggest it may be hard to “buck the trend.”

Macro Trends

What are these macro trends?

  • Steel demand looks weak overall and overcapacity will continue unabated. According to Tony Taccone, Partner at First River Consulting, “global steel demand has stalled and there will be no growth going forward.” In addition, Taccone indicated the world has 700 million metric tons of overcapacity and the problem is set to become worse.
  • Trade cases will put the kabash on Chinese export growth. China has produced too much steel at unsustainable prices and has exported materials at the marginal cost of production, according to Taccone.
  • Automotive demand may have peaked and aluminum demand may weaken steel demand.

Despite weak demand in some sectors, others paint a more positive picture. According to Alan Beaulieu, Principal of the Institute for Trends Research, many factors look more positive for demand including light vehicle production, U.S. industrial machinery production (recently turned positive), a booming office building construction market, a stabilized oil and gas extraction market and healthy global demand for crude oil.

GOES_Chart_September_2016_FNL

In addition, Beaulieu pointed to rising mining, electricity generation and manufacturing sectors, that certainly bodes well for power equipment production and demand.

Micro Trends

With the loss of Allegheny Technologies, Inc. capacity for GOES, the uptick in electricity generation and construction, and the more bullish outlook for other commodities and non-ferrous metals, we might expect GOES prices to creep up accordingly.

Two-Month Trial: Metal Buying Outlook

Though the macro trends paint a slightly more negative picture for steel prices in general (negative for producers, positive for buying organizations) for the near term, GOES markets don’t cleanly align with steel markets. September marks the second month of a rising price trend.

For full access to this MetalMiner membership content:
Log In |

Earlier this year, China promised it would cut steel capacity. However, despite friction with several trading partners, Chinese exports continued to look strong in the first half.

Two-Month Trial: Metal Buying Outlook

China’s Vice Minister of Industry said in July that the country will step up efforts in the second half. The minister pointed out that focus of their work in the first half was mission planning, and in the second half they will step up implementation and enter a new stage, from allocating targets and drawing policies to actually pushing capacity cuts.

Exports Fall in August

Chinese exports decline in August. Source: Customs Dept PRC

Chinese exports decline in August. Source: Customs Dept. People’s Republic of China.

Following those comments, exports started to taper down. In August, China exported 9.01 million metric tons of steel, a year-over-year decline of 7.4%. Other than capacity cuts, the anti-dumping duties that many countries have slapped on Chinese steel products are contributing to this decline. Read more

The Department of Commerce has preliminarily found that Chinese stainless steel sheet and strip producers illegally dumped — sold at less than fair value — their products in the U.S.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

Commerce preliminarily found that dumping occurred by mandatory respondents, Shanxi Taigang Stainless Steel Co., Ltd. and Tianjin Taigang Daming Metal Product Co., Ltd. Commerce also determined that the mandatory respondents are not eligible for a separate rate, and therefore part of the China-wide entity.

Commerce calculated a preliminary dumping margin of 63.86% for the non-selected respondents eligible for a separate rate. Commerce preliminarily assigned a dumping margin of 76.64% based on adverse facts available for all other producers/exporters in China that are part of the China-wide entity due to their failure to respond to Commerce’s requests for information.

As a result of the preliminary affirmative determination, Commerce will instruct U.S. Customs and Border Protection to collect cash deposits based on these preliminary rates.

The petitioners for this investigation are AK Steel Corporation, Allegheny Ludlum, LLC d/b/a ATI Flat Rolled Products, North American Stainless, and Outokumpu Stainless USA, LLC.

Two-Month Trial: Metal Buying Outlook

Commerce is scheduled to announce its final determination on or about November 25.

The Federal Reserve released its last assessment of the economy before its next meeting and steel imports into the U.S. were down in July.

Fed Upbeat About the Economy Ahead of Meeting

The Federal Reserve‘s Beige Book assessment of the economy is generally positive, noting a tight labor market in some areas but little evidence of wage inflation.

Two-Month Trial: Metal Buying Outlook

It’s the latest data point for policymakers before they meet this month and decide whether to raise interest rates amid mixed signals and scant progress toward a 2% inflation target.

Steel Imports Into the US Down in July

Based on the Commerce Department’s most recent Steel Import Monitoring and Analysis (SIMA) data, the American Iron and Steel Institute (AISI) reported recently that steel import permit applications for the month of August totaled 3,028,000 net tons. This was an 8% decrease from the 3,294,000 permit tons recorded in July and a 7% decrease from the July final imports total of 3,266,000 nt.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

Import permit tonnage for finished steel in August was 2,282,000 nt, down 8% from the final imports total of 2,471,000 nt in July. For the first eight months of 2016 (including August SIMA permits and July final data), total and finished steel imports were 22,001,000 nt and 17,576,000 nt, down 22% and 23%, respectively, from the same period in 2015. The estimated finished steel import market share in August was 25% and is 25% year-to-date.

Today, the Department of Commerce placed countervailing duties on imports of carbon and alloy steel cut-to-length plate from China and cleared South Korea simultaneously.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

For the purpose of countervailing duties investigations, 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.

In the China investigation, Commerce calculated preliminary subsidy rates of 210.50% for mandatory respondents Jiangyin Xingcheng Special Steel Works Co. Ltd., Hunan Valin Xiangtan Iron & Steel, and Viewer Development Co., Ltd. based on the application of adverse facts available. All other producers/exporters in China have also been assigned a preliminary subsidy rate of 210.50%.

In the Korea investigation, Commerce calculated a de minimis preliminary subsidy rate of 0.62% for mandatory respondent POSCO. All other producers/exporters in Korea have been assigned a de minimis preliminary subsidy rate.

As a result of the preliminary affirmative determination for China, Commerce will instruct U.S. Customs and Border Protection (CBP) to require cash deposits based on these preliminary rates. For Korea, because its preliminary determination was negative, Commerce will not instruct CBP to require cash deposit rates.

Two-Month Trial: Metal Buying Outlook

The petitioners are Arcelormittal USA LLC, Nucor Corporation and SSAB Enterprises, LLC. Commerce is scheduled to announce its final determinations on or about January 19, 2017, unless the statutory deadline is extended.

Our Raw Steels MMI fell 7% to 53 points last month. This is the first time we have seen a significant decline in steel prices this year. August brought some interesting developments for the steel industry.

Raw-Steels_Chart_September-2016_FNLUS prices Down, While China’s Prices Rise

By the end of the first half, domestic hot-rolled coil prices had risen 70% while prices in China were up by just 30%. The main driver of this price gap was trade cases, which made U.S. steel imports plunge this year, inflating prices domestically. Read more