Articles in Category: Global Trade

Our Rare Earths MMI was flat for a fourth straight month as the market remains oversupplied and stale ever since China lifted quotas on the magnetic and energy storage metals, the end of a long-running World Trade Organization dispute.


That happened in January 2015 and rare earths have not moved much since. The elements are still highly important for defense, power and green energy applications but prices show no signs of jumping due to Chinese export embargoes or, really, anything else.

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

This has caused a somewhat dangerous lack of urgency about fixing domestic supply problems as there’s currently no real urgency to create another U.S. supplier like Molycorp. U.S. Rare Earths Inc. looks like the only viable option for the foreseeable future.

This is by design, too, as China is still consolidating its rare earths industry and will likely drive prices even lower during that process.

What Does Consolidation Mean?

A report from BMI Research says the Chinese government will continue to ramp up exports even as it consolidates companies and shuts down some mines. Better management allowing better production at underperforming operations is what Beijing envisions.

Dysprosium and cerium have seen prices fall from $65,865 a metric and $883 per mt, respectively in May 2015, to $37,524 per mt and $685 per mt by September, according to BMI. If you’re not already a member, join MetalMiner membership to see how closely that mirrors or MetalMiner IndX values. See below for those of you in the know.

Two-Month Trial: Metal Buying Outlook

BMI expects that, in a bid to regain pricing power, the Chinese government will pursue a strategy of consolidating the country’s domestic rare earths sector and increasing exports over the coming quarters. That means even lower prices than what we’ve seen over the last two years.

BMI believes that Australia, Russia, Greenland and the U.S. (U.S. Rare Earths) hold significant rare earths output growth potential over the long term. The analysts from BMI do not expect that these countries will be able to overtake China’s market share any time soon due to the low-price environment.

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.

It may not have been a very good year so far for India’s Tata Steel but things seem to be looking up. It’s also looking good for former Tata Steel companies.

Former Tata Operations Turn a Corner

While Tata continues to report consolidated losses, although it hopes to recover in the short term, there’s plenty of cheer for its former European operations. British Steel, after being spun off from Tata is back in the black, just a few weeks after the completion of the sale of Tata’s steelworks at Scunthorpe.

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

Greybull Capital is the new owner of Tata Steel’s long products business and British Steel now plans to pump in about $65 million (£50 million) of investment this financial year.

This steel plant at Port Talbot in South Wales, U.K., could close if Tata Steel can't find a buyer. Even as steel prices increased last week. Source: Adobe Stock/Petert2

Tata Steel is supposedly in pension talks with its union to save this steel plant at Port Talbot in South Wales, U.K.. Source: Adobe Stock/Petert2

In nearby Scotland, the Dalzell plant at Motherwell, Glasgow, reopened recently after the India-native businessman Sanjeev Gupta’s Liberty House Group acquired the steelworks from Tata earlier this year. Read more

Our Global Precious MMI was up a point this month, climbing to 86 from 85 last month, an increase of 1.2%, but this may be the last increase we see for awhile as gold experienced its biggest single-day post-Brexit drop yesterday. It closed at $1,268.40 an ounce, a slide of 3%, down from $1,311.20 on Monday. It’s around $1,275 as of this writing.

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

The yellow metal was dragged to its lowest point since the Brexit vote in June which was driven mainly by a bounce in the U.S. dollar after upbeat data triggered a break of key support at $1,300 an ounce. As speculation grows that the Federal Reserve may finally raise interest rates in December, the dollar has been given a boost and a selloff in gold has ensued. Losses in silver and platinum group metals have followed, although none fell as dramatically as gold this week.


We warned, earlier this month, that the first half investment appeal of precious metals was waning. The relatively tepid increase in September was a sign that the metals, as a group, simply could not keep the momentum of the first half. Most are blaming this pullback on the dollar, and that certainly has a lot to do with it, but the fact that economic fears about the U.S. economy have been quelled might be the real culprit.

U.S. manufacturing rebounded in September after contracting in August. New orders and production at factories increased, although employment fell. The Institute for Supply Management said Monday that its manufacturing index rose to 51.5 in September from 49.4 in August. Any score above 50 is a net expansion in manufacturing activity.

Two-Month Trial: Metal Buying Outlook

While gold is the most for-investment metal of the group, the others are experiencing similar effects as gold and their supply/demand fundamentals aren’t much better. Silver is more industrial, but acts as a safe haven, too, a veritable poor man’s gold. Platinum and palladium are more tied to the automotive and other catalyst markets. Still, they are moving largely in lock-step right now and have been doing so since the dollar bottomed out in May. Platinum is receiving a particularly cold shoulder from investors. The metal is well-supplied even if investment demand increases.

What Does This Mean for Precious Buyers?

A stronger dollar and better economic data about the U.S. economy is bad for the investment appeal of precious metals. More data will come out in the days leading up to the presidential election but precious metals’ gains of the first half are likely a thing of the past.

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

Our Raw Steel MMI rose 2 points or by 4%. Wait, what? Didn’t steel prices fall in September?

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

Yes, they did. Significantly, domestically, but the index collects and weights 13 global steel and raw material price points. So, while prices in the U.S. fell, international prices held well and coking coal prices saw a spectacular increase.


The price of Chinese coking coal, a vital ingredient in the steelmaking process, more than doubled in September. Behind the surge are disruptions in Australia, a leading supplier to the export market, and production curbs in China caused by government restrictions.

Meanwhile, steel prices in China were flat following the price divergence we already witnessed last month, see falling US prices and rising/flat international prices. The rally in U.S. steel prices, which was driven mainly by trade cases, is now fading.

Global steel production continues to increase. In August, production in China rose 3% year-on-year. The country still has a lot work to do if it wants to meet its target of reducing capacity. Meanwhile, U.S. steel production fell in August.

Taxing Chinese Supply Creates Opportunity Elsewhere

Despite a recovery in prices during the first half, U.S. producers haven’t increased output to create an artificial domestic shortage. However, there is no global shortage and falling domestic output is only pushing steel buyers to source their needs from overseas.

The clearest example is cold-rolled coil (CRC). Prior to the recent trade cases, China accounted for more than half of U.S. CRC imports. Imports from China were effectively shut down thanks to a super-high dumping/countervailing duty margin of 265%. However, it seems that imports now are coming from other sources. In August, cold-rolled coil imports rose almost 11% from last year, recording the highest levels in 13 months.

Tariffs Can’t Stop International Prices From Falling

In a bid to protect their turf from the new wave of steel imports, U.S. steel companies are filing a case against transshipments of Chinese steel products from Vietnam.

U.S. steelmakers will likely find it difficult to prove those allegations and, even if they do, those same imports could come from other countries. Trade cases can provide short-term breathers in the current import environment, but — in the medium- to long-term — U.S. steel companies will have to become more competitive to win the market back from imports. Although U.S. prices have fallen recently, the spread between U.S. and international prices is still lucrative for domestic buyers to look for overseas for their material.

The key now is not only to watch domestic prices, but also international prices. Eventually, the current decline in domestic prices will find support if the gap between domestic and international prices narrows enough. On the other hand, if international prices start to slide, too, it might be difficult for U.S. steel prices to find a floor.

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

Finished steel imports into the U.S. were down in August and Indonesia may finally restart shipments of raw ore to other countries, which could bring nickel back to China.

Steel Imports Still Down

Based on preliminary Census Bureau data, the American Iron and Steel Institute reported recently that the U.S. imported a total of 2,989,000 net tons (NT) of steel in August, including 2,307,000 net tons of finished steel. That’s down 8.5% and 6.6%, respectively, vs. July final data.

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

Year-to-date, through eight months of 2016, total and finished steel imports are 21,962,000 and 17,601,000 nt, down 22% and 23%, respectively, vs. the same period in 2015. Annualized total and finished steel imports in 2016 would be 32.9 and 26.4 million nt, down 15% and 16%, respectively, vs. 2015, if the current trends hold.

Finished steel import market share was an estimated 25% in August and is estimated at 25% on the year-to-date.

Key finished steel products with a significant import increase in August compared to July are standard pipe (up 33%), wire rod (up 23%), structural pipe and tubing (up 18%) and hot-rolled bars (up 15%).  Tin plate (up 12%) had a significant year-to-date increase vs. the same period in 2015.

Indonesian Mining Rules

Indonesia is finalizing an overhaul of its mining rules that could give companies up to five more years to build smelters, and reopen exports of nickel ore banned since 2014, the country’s mining minister said on Tuesday.

Two-Month Trial: Metal Buying Outlook

The proposed changes provide a way around a 2017 deadline for full domestic processing of mineral ore, potentially pushing completion of that aim to 2022, but also possibly undermining investor confidence.

The IMF has downgraded its U.S. growth outlook and Canada’s Goldcorp has been forced to shut down one of its largest mines in Mexico.

IMF Downgrades U.S.

The International Monetary Fund is downgrading its forecast for the U.S. economy this year and warns that political discontent threatens global growth.

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

The IMF on Tuesday cut its estimate for U.S. economic growth in 2016 to 1.6% from the 2.2% it had predicted in July. The American economy grew 2.6% in 2015. The fund’s dimmer outlook for the U.S. occurs even as the Federal Reserve is thought to be preparing to raise interest rates in December.

The global economy will expand 3.1% this year, it said — the same as forecast in July.

The IMF described worldwide growth as “subpar,” with a slowdown in the U.S. and other advanced economies being offset by slightly stronger output in developing and emerging nations.

Goldcorp Shuts Down Blockaded Mexican Mine

Goldcorp Inc. said on Monday it was temporarily shutting down its Peñasquito gold mine in Mexico as it was unable to safely continue operations due to a week-long blockade by a trucking contractor, sending its shares down nearly 5%.

Two-Month Trial: Metal Buying Outlook

The world’s No. 3 gold miner by market value said it was unable to bring in food, water and fuel for the 750 people on the site, which has been blockaded by a contractor concerned about losing business due to efficiency improvements at the mine.

Britain’s exit from the European Union, colloquially known as Brexit, looks like a train crash in slow motion.

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

As each week goes by and neither side shows the slightest inclination to compromise, the prospect of a hard Brexit appears to be mounting. This is worrying business leaders much more than politicians who are rather enjoying the grandstanding, and that alone is cause for concern.

Hell Hath No Fury Like a Currency Bloc Scorned

On the one hand, we appear to have an inflexible European Commission that wants the United Kingdom out as quickly as possible. On the other, hardliners in the British cabinet making the argument for a clean break with the false promise that all will be well if the U.K. does so.

As Peter Mandelson, a former E.U. trade commissioner and U.K. cabinet minister writes in the Financial Times, both sides are in danger of damaging the negotiations before they even start. Few are focused on creating a framework in which the closest and most cooperative relationship can be achieved.

We told you it could happen. Source: Adobe Stock/Stephen Finn.

Time for both sides to make a deal. Source: Adobe Stock/Stephen Finn.

Such a relationship should cover trade in goods and services, security cooperation, and many other aspects of Britain’s 40-year partnership with Europe, but it can only be achieved by Britain and the EU working together. In the meantime, major firms are either putting investment decisions on hold or, worse, actively exploring mainland European options. Read more

Investors are still giving platinum the cold shoulder and oil production likely hit its recent high in September. Oil likely hit an output record in September.

Platinum Still Not Trusted

Investors bruised by platinum’s dismal failure to capitalize on a five-month strike in 2014 are not convinced that stocks of the metal have shrunk enough to justify a return to the market, despite positive supply-side news this year.

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

Uncertainty over how abundant stocks of the metal are is continuing to curb investment interest in the metal, with holdings of platinum-backed exchange-traded funds (ETFs) falling to their lowest since mid-2013 this month.

Oil Likely Hit an Output Record in September

The Organization of the Petroleum Exporting Countries‘ oil output is likely to reach its highest in recent history in September, a Reuters survey found on Friday, as Iraq boosted northern exports and Libya reopened some of its main oil terminals.

Two-Month Trial: Metal Buying Outlook

The increase comes despite lower output in top exporter Saudi Arabia and this week’s OPEC agreement in Algeria to limit supply to support prices.

Welcome back to the MetalMiner week-in-review. This week, the aluminum world got together in Washington to discuss the threat of overcapacity and the particular problem of Chinese overproduction.

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

The U.S. International Trade Commission is involved now. Read our investigation of Chinese overproduction and how it affects aluminum companies around the world while the ITC deliberates.

Source: Thomson Reuters Datastream/China Customs 8/9/2016

We’ve seen Chinese steel exports consistently climb. Source: Thomson Reuters Datastream/China Customs 8/9/2016.

Oil Overproduction

Speaking of overproduction, the Organization of Petroleum Exporting Countries has finally agreed to its first production cuts since 2008. Read more