Articles in Category: Global Trade

The month of August has seen the Indian government slap anti-dumping duties on the import of a variety of steel products from six countries including China, South Korea, Brazil and Indonesia.

Two-Month Trial: Metal Buying Outlook

In the first week, the import duty was imposed on hot-rolled steel products, while a few days ago, the duty was enforced on certain cold-rolled flat steel products from different countries to protect the domestic industry from cheap imports.

In the first case, anti-dumping duties $474-557 per metric ton were imposed on hot-rolled flat products of alloy or non-alloy steel from China, Japan, South Korea, Russia, Brazil and Indonesia, according to a government notification.

Coiledsteel_585

Imports of coiled steel will be heavily tariffed in India, too. Source: iStock.

The duty will be in force for six months until February 7.

Hot-Rolled Duties

An anti-dumping duty of $474 per ton was imposed on import of hot-rolled flat products of alloy or non-alloy steel of a width up to 2,100 millimeter with a width up to 25 mm from Korea and Japan.

According to an Indian Express report Korean firms affected by this were Hyundai Steel Co. and POSCO. Three Japanese companies — JFE Steel Corp., Nippon Steel and Sumitomo Metal Corp. are also on the list. A similar anti-dumping duty was slapped on imports of similar products from China. Exporters Angang Steel Company Ltd. and Zhangjiagang were among the hardest hit. Imports of the same from Indonesia, Russia and Brazil attracted the $474 per mt duty. Read more

Iron ore prices have done an amazing job of defying gravity, the price has risen 41.7% this year after three straight years of losses according to Australia’s Business Insider.

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Prices for 62% fines hit $61.75 per dry ton this week and have averaged $53.64 per dry metric ton this year.

Source: Business Insider

Source: Business Insider

The raw material has variously been called the darling of the commodities market and by Citicorp as 2016’s hot commodity but many are now beginning to ask if enough is enough and just how much support there is for current price levels let alone further rises. Read more

In a speech in Tampa, Fla., Wednesday afternoon, Republican Presidential Nominee Donald Trump outlined a seven-point plan to bring millions of jobs to the U.S. that involved labeling China a currency manipulator.

Two-Month Trial: Metal Buying Outlook

He proposed renegotiating unconfirmed trade agreements such as the Trans-Pacific Partnership and told his audience he would pull the U.S. out of the North American Free Trade Agreement. In a first, Trump challenged China for “illegal activities” and vowed to label the country he did real estate business with a currency manipulator.

“I am going to instruct my Treasury Secretary to label China a currency manipulator,” he said. “Any country that devalues their currency in order to take unfair advantage of the United States — and all of its companies who can’t (then) compete —will face tariffs and to stop the cheating.”

Getting Tough With China

Trump also vowed to instruct the office of the U.S. Trade Representative to bring trade cases against China, both in this country and at the World Trade Organization. Read more

The London Metal Exchange and CME Group took action recently to, respectively, cut fees for traders and stop a spoofer.

We’re Sorry: LME Cuts Fees

The London Metal Exchange has cut fees in half for open outcry trades during August as a goodwill gesture after it had to vacate its premises because of structural problems, it said on Monday.

Free Download: The August 2016 MMI Report

Ring trading moved to its disaster recovery site in Chelmsford, east of London, in July after a potential safety issue was discovered in the building that houses its offices in London’s financial district.

CME Suspends Spoofer

CME Group, Inc. suspended a futures trader from its markets for spoofing on Monday, the exchange operator said, the latest regulatory action over the manipulative trading practice.

The company — which owns Comex, the Chicago Mercantile Exchange and other exchanges — barred Andrey Sakharov from trading for 60 days and could extend his ban, according to a disciplinary notice.

On multiple dates starting last month, Sakharov entered electronic orders in CME’s gold and natural gas markets that he did not intend to trade, the disciplinary notice said.

Two-Month Trial: Metal Buying Outlook

The practice of placing bids to buy or offers to sell contracts with the intent to cancel them before execution is known as spoofing and is illegal. It is used to create an illusion of demand in markets, so that spoofers can influence prices to benefit their market positions.

The Office of the U.S. Trade Representative recently sent to Congress a draft Statement of Administration Action for the Trans-Pacific Partnership, a procedural step necessary before a draft implementing bill is sent to Congress.

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According to the fast-track law, the trade rep must send a draft SAA to Congress at least 30 days before it submits a draft implementing bill, but that does not mean it will be submitted in that timeframe, that’s just merely the minimum before a bill can be sent. The trade rep sent notification August 12th. Read more

The Aluminum Association has not given up on the U.S. reaching a binding bilateral deal with China to reduce aluminum overcapacity, but the group is also holding out the option of pursuing anti-dumping or countervailing duty cases if market conditions fail to improve.

Two-Month Trial: Metal Buying Outlook

The aluminum industry is gearing up for a Sept. 29 International Trade Commission hearing, which would serve as the first step in any future trade defense cases on aluminum. The industry has taken a less aggressive approach than steel in not more pursuing anti-dumping, countervailing duties or World Trade Organization action against China on aluminum, opting instead to try to reach a bilateral or multilateral deal, Aluminum Association Vice President of Policy Chuck Johnson told World Trade Online.

“The issues of overcapacity really came to a head in the middle of last year,” Johnson said. “Prior to that, we had not been active on this issue. We have not, as an association, pursued antidumping and other trade enforcement remedies for our industry as have steel and other industries that have been facing a more endemic and long-term conditions. … But we are not taking anything off the table.”

This is a shift for the association, which represents original aluminum manufacturers throughout North America.

The ITC hearing will look at Chinese trade practices including trade policies, export duties and industry subsidization. The goal, Johnson said, is to get better documentation on China’s industry than has previously been gathered.

Free Download: The August 2016 MMI Report

The ITC is currently collecting information and gathering public comments in preparation for the hearing. The commission is also circulating a questionnaire looking at the competitive conditions affecting the U.S. aluminum industry as a whole.

Another Chinese steelmaker, Bohai Steel Group, has been given a bailout and Japan’s Tokyo Steel Manufacturing has left prices unchanged for three months.

Bohai Bailout

Bohai Steel Group, the indebted state-owned conglomerate, may receive help from a local government bailout fund to restructure its debts, the online financial magazine Caixin said over the weekend.

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Bohai Steel, which was created in 2010 through the combination of four manufacturers, holds liabilities of $28.9 billion (192 billion CNY) from 105 creditors, alongside assets of nearly CNY 290 billion, Caixin reported.

The Tianjin government plans to create a local asset manager to assist in the debt workout of Bohai Steel, alongside other troubled Tianjin enterprises, the magazine said.

Restructuring of the group represented the biggest since the global financial crisis, Standard & Poor’s analyst Christopher Lee told Reuters in March.

Tokyo Steel Leaves Prices Unchanged

Tokyo Steel Manufacturing, Japan’s top electric arc furnace steelmaker, said on Monday it would keep product prices unchanged for the third month in September, reflecting a slow recovery in its local market.

Free Download: The August 2016 MMI Report

Tokyo Steel’s pricing strategy is closely watched by Asian rivals such as POSCO, Hyundai Steel Co. and Baosteel, which all export to Japan.

This week, U.S. Steel got its section 337 investigation against 40 — yes 40 — Chinese steel companies reinstated and we got to see the minutiae of just how the International Trade Commission, administrative law judges and the Commerce Department work together. Or, in this case, don’t work together.

Free Download: The August 2016 MMI Report

To tell this tale we must go to a magical place full of bureaucrats called Washington, D.C., where one in every 12 residents, according to the American Bar Association, is a lawyer. The ITC is an independent, bipartisan, quasi-judicial, federal agency that provides trade expertise to both the legislative and executive branches.

AdobeStock_retrostar_bureaucracy_redtape_550_081616

Red tape has beset U.S. Steel’s pursuit of a section 337 investigation against Chinese steel companies. Source: Adobe Stock/retrostar.

The agency also determines the impact of imports on U.S. industries and directs actions against unfair trade practices, such as subsidies, dumping, patent, trademark, and copyright infringement.

What’s an Administrative Law Judge?

The ITC employs ALJs. Five of them, to be exact. These “finders of fact” adjudicate disputes for the six ITC commissioners, who are appointed by the president and confirmed by congress. The ALJs greatly reduce the workload of the commissioners who only deal with the most serious matters that reach their level. At least in theory, that is. Read more

28 Ambassadors to the U.S. have been asked by the chairman of the U.S. International Trade Commission to testify or submit comments on global aluminum trade and the U.S. industry as the ITC continues its work on a report on those topics for the House Ways & Means Committee.

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The 28 ambassadors hail from Australia, Brazil, China, France, Iceland, Italy, Korea, Bahrain, Canada, European Union, Germany, India, Japan, Kuwait, Malaysia, Mozambique, Norway, Qatar, Saudi Arabia, Turkey, Great Britain and Northern Ireland, Mexico, Netherlands, Oman, Russia, South Africa, United Arab Emirates and Vietnam.

An administrative law judge who suspended U.S. Steel Corp.‘s 337 case against 40 Chinese steel companies earlier this year improperly linked the case to the anti-dumping and countervailing duty investigations handled by a separate government agency — the Department of Commerce — according to an International Trade Commission opinion.

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The commissioners initially overturned the suspension on Aug. 5, but did not issue their opinion until yesterday.

US Steel’s Anti-Dumping Cases Not Significantly Related

The commissioners, in overturning the suspension of U.S. Steel’s case, determined ITC rules do not allow for the suspension of a 337 investigation simply in order to notify the Commerce Department as required by statute, and that elements of U.S. Steel’s case involving allegations of price fixing and transshipment “are, at most only partially related to anti-dumping and countervailing duties.”

Administrative Law Judge Dee Lord suspended the case on July 6 because Commerce was not notified of the investigation, and because elements involving price fixing and transshipment, at least partially, fell under the scope of Commerce’s antidumping and countervailing duty investigations.

U.S. Steel’s initial petition, filed on April 26, cites allegations of collusion and price fixing, transshipment to evade anti-dumping/countervailing duties, and theft of trade secrets via hacking by Chinese agents.

Free Download: The August 2016 MMI Report

U.S. Steel is seeking a general exclusion order to block all Chinese carbon and alloy steel products from the U.S. market, a limited exclusion order blocking imports from 40 listed steel companies and a cease-and-desist order for their alleged illegal practices.

U.S. Steel claimed that a hack similar to one that happened in 2011 to it and other companies was carried out to acquire the recipe and production process of a popular automotive steel alloy, dual-phase 980, that Baosteel and other Chinese companies began offering shortly after the hack,