In the countervailing duties investigation, Commerce found that mandatory respondent Steamline Industries Limited received countervailable subsidies at a rate of 3.13% and that mandatory respondent Sunrise Stainless Private Limited, Sun Mark Stainless Pvt. Ltd., and Shah Foils Ltd. (collectively, “Sunrise Group”) received countervailable subsidies at a rate of 6.22%. Commerce assigned a final subsidy rate of 4.65% for all other producers/exporters in India.
As a result of the affirmative final determinations, Commerce will instruct U.S. Customs and Border Protection to collect cash deposits equal to the applicable weighted-average dumping and subsidy margins.
Shares of U.S. steelmakers made an spectacular run this year, making the steel industry one of the hottest investing opportunities. Stock investors poured money into steel stocks as domestic prices rose.
U.S. Steel (in Blue) and AK Steel (in red) stock prices. Source: MetalMiner analysis of stockcharts.com data.
However, since August, we’ve seen some downward pressure on flat-rolled steel prices with hot-rolled-coil falling near $70 ton from it’s peak in June.
That caused shares of companies like U.S. Steel and AK Steel to fall more than 40% in just a matter of weeks. Notice how the price trends of shares of both companies are almost identical.
HRC prices correcting since August. Source: MetalMiner analysis of stockcharts.com data.
While steel prices continue to weaken, so will the stock prices of U.S. steelmakers. Investors looking to buy shares of steel companies might want to wait until steel prices make a comeback, if they do, that is.
China’s crude steel consumption slipped 1.9% from January to July and there may be a slight drop for the year, said Wang Liqun, vice chairman of the China Iron and Steel Association (CISA).
Fed Leaves Rates Unchanged Again
U.S. stocks marched higher on Thursday, with the Nasdaq hitting a record intraday high, as investors cheered the Federal Reserve‘s decision to not raise interest rates yesterday.
While the Fed said the risks to economic outlook were roughly “balanced”, it left rates unchanged for want of “further evidence of continued progress”. Inflation remains below the central bank’s target of 2 percent and members saw room for improvement in the labor market.
Siemens and Local Motors announced a new partnership at the recent International Manufacturing Technology Show in Chicago, which is intended to help advance the future of manufacturing by optimizing the development and large-scale 3D printing of automobiles.
The partnership combines the power of Siemens’ product lifecycle management (PLM) software technology with Local Motors’ leadership in co-created and 3D-printed vehicles — a process called direct digital manufacturing (DDM), wherein parts are produced directly from CAD files.
All 115,612 International Manufacturing Technology Show attendees could ride Olli, Local Motors’ first 3D-printed, autonomous vehicle to get around the massive show floor. Source: IMTS.
Local Motors plans to enhance productivity in its LM Labs program by leveraging Siemens’ expertise in creating “digital twins,” while Siemens expects to further enhance its digital enterprise software suite to support the latest advances in additive manufacturing/3D printing.
For the first time, Local Motors provided an autonomous vehicle, “Olli” that ferried IMTS goers throughout the halls of McCormick Place. The vehicle used Watson’s capabilities to enable riders to ask complex questions in “natural language” voice such as where to visit in Chicago while in town. Olli can be hailed by an app and is in real-life testing Local Motors testing locations right now including National Harbor, Md., Las Vegas and, later this year, Miami. The autonomous vehicle can take route instructions and explain what’s happening during the trip.
Local Motors brought other 3D-printed vehicles — including Strati, the first 3D-printed show car created at IMTS 2014 — tot the show, too.
On the Siemens side of the partnership, the PLM software provider insists that additive manufacturing is not in direct competition with existing manufacturing processes and will not completely replace them.
“Instead, 3D printing will provide an ideal complement to traditional procedures like injection molding and milling,” said Ulli Klenk, chairman of the board of the Additive Manufacturing Association within VDMA — a German manufacturing association trade and certification association — and also manager of Siemens’ digital factory division.
Klenk said the certifications and standards VDMA is working on will bring legitimacy to the technology and, within 10 years, additive manufacturing could effectively be commoditized with 3D printing powders and their prices treated as any other raw materials.
OPEC members are now talking about a deal that lasts one year, whether that means curtailing production for that period is still unknown. Australia is attempting to collect $766 million in taxes.
OPEC Deal Could Last a Year
A possible deal to support oil prices by the world’s leading producer-countries may last for one year, the secretary-general of the Organization of Petroleum Exporting Countries said on Tuesday, longer than other officials have indicated.
OPEC and non-member producers including Russia are discussing a deal to stabilize the market by possibly freezing output, although key details such as the timing and baseline for any deal have yet to emerge.
BHP Vows to Fight Australian Tax Bill
BHP Billitonsaid it disagreed with Australian tax collectors’ assessment that the miner needs to pay $766 million in back taxes and charges for its Singapore commodities marketing hub, and that it could resort to court action to fight the claim.
BHP is under investigation by the Australian Tax Office (ATO) for allegedly shifting billions of dollars in iron ore profits through marketing hubs in Singapore, where it operates under an effective tax rate of zero as part of a concessional tax deal.
The industrial metals complex saw prices slip nearly across the board in August as volatility returned to stock markets and investors lost confidence in central banks’ ability to increase growth.
Even the vaunted Global Precious MMI, which has enjoyed large gains this year due to safe haven status, dropped this month. It experienced a 4.5% loss. Our Construction MMI and the Grain-Oriented Electrical Steel MMI indexes saw increases this month, but every other sub-index either saw a 2-5% loss or held flat.
This was somewhat expected as metals such as steel and aluminum remain in a global oversupply situation and metal prices don’t move in a straight line. They zig-zag. Our metal price benchmarking service has thousands of transaction prices to reference as evidence of that.This could be merely a one-month correction or it might signal that the weakness in metals markets is finally denting the bull run of strong price performers such as gold and platinum. Stay tuned next month for more.
Without doubt, much of iron ore’s gains in 2016 have been driven by strong demand from China, with imports up 9.3% to 669.65 million metric tons in the first eight months of the year from a year ago. But prices in Qingdao lost 5.8% in the seven sessions through Wednesday. That was the longest run of daily declines since March and while steel output remains robust, questions are again being asked how much longer prices can remain north of $55 per mt as yet more supply comes on stream. According to the MetalMiner index, finished steel prices have eased this month.
Iron Ore Output
You would expect the miners to refute this and, sure enough, in a Bloomberg report,Vale SA and Cliffs Natural Resources Inc. said that the impact of the new output won’t be as severe as expected and will see the $50 per mt level holding, but banking analysts are not so sure with Westpac saying last month rising supply will drive prices below last year’s lowest point of $38.30, while Citigroup expects an average of $45/mt next year. Read more
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
China is planning a bailout of sorts for Bohai Steel Group and standards organization ASTM International wants to develop certifications for commercial space flight.
A New Lifeline for Bohai Steel
Financial authorities in Tianjin, China, plan to convert a portion of debt-stricken Bohai Steel Group‘s liabilities into bonds, according to rescue plans drawn up recently, the online financial magazine Caixin reported on Monday.
According to the plan, high-quality assets from Bohai Steel will be restructured to form a new company, which will take on 50 billion Chinese yuan of the total debt. Officials met last week to discuss a comprehensive restructuring plan for the firm, which has liabilities of $28.78 billion (192 billion yuan) from 105 creditors.
ASTM Seeks To Develop Private Space Travel Standards
ASTM International will host an organizational meeting to potentially create a new technical committee that develops voluntary consensus standards for commercial spaceflight.
This meeting comes in part as a result of the updated U.S. Commercial Space Launch Competitiveness Act of 2015 (SPACE Act). The U.S. Federal Aviation Administration’s Commercial Space Transportation Advisory Committee (COMSTAC) Standards Working Group is recommending the organization of the new group.
Republican Presidential Nominee Donald Trump recently said he would scrap some controversial EPA plans and rules and allow more drilling for oil and gas on federal lands. Steel companies applauded the Senate’s passage of a new water reclamation bill.
Trump Would Scrap Clean Power Plan
Republican presidential nominee Donald Trump released details Thursday of his proposed energy policy, which includes scrapping the Environmental Protection Agency‘s controversial Clean Power Plan and Waters of the United States rule.
He also promised to open more federal lands and waters to oil and gas development.
Steel Companies Praise Water Bill
The American Iron and Steel Institute (AISI) recently applauded the U.S. Senate’s passage, by a vote of 95-3, of the Water Resources Development Act (WRDA), which will authorize more than $10 million worth of projects to improve navigation, replace and restore aging locks and dams, and provide aid to Flint, Mich. and other communities in need of replacing pipes, sewers and other drinking water infrastructure.