Articles in Category: Imports

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.

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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.

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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

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.

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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

U.S. Flat-rolled steel prices have dropped $20-40/ton so far in August, bringing hot-rolled coil down to $580-600/ton ex-works Midwest.

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There are two schools of thought. First, the current dip reflects a typical holiday slowdown and prices will hold or come back in September. In that scenario, buyers need to secure Q4 requirements and will return to ordering in September. On the supply side, mills are taking downtime in October and Q4 for maintenance, there is still some idled capacity (U.S. Steel and AK Steel) while higher-than-expected final HRC duties and tariffs will keep out imports. The steel market will, therefore, tighten and prices will hold at the current high levels.

U.S. HRC, CRC, HDG Imports (000 tons)

Steel_insight_us_hrc_crc_HDG_imports_082316

Source: AISI, Steel-Insight.

Steel-Insight could not disagree more. While we don’t expect freefall just yet, we do expect HRC prices to be back in the high $300s/ton at some point next year. Read more

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.

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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

U.S. trade authorities are considering asking for a reclassification of aluminum products in the wake of China’s exports of aluminum semi-finished products. Architecture billings in the U.S. were still up in July.

Semi-Finished Aluminum

The U.S. is consulting other governments on proposed changes it has drafted to the Harmonized Tariff Schedule (HTS) meant to stop a flood of “fake semi-finished” aluminum products entering the global market, almost always from China, that evade export duties while simultaneously qualifying for Chinese export subsidies.

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Aluminum industry and Customs and Border Protection sources told World Trade Online the U.S. proposal, still in draft form, would reclassify semi-finished products shipped specifically for remelting as unwrought, or raw aluminum. Semi-finished products are usually an aluminum alloy that are used for further manufacturing, but the fake semi-finished products are almost pure aluminum and cannot be used for any other purpose than remelting.

Charles Johnson, vice president of policy at the Aluminum Association, said a common fake semi-finished product exported from China is labeled for customs purposes as aluminum alloy coils, which are used for airplane wings, auto bodies, roofing and aluminum cans. The coils are sold – among other items – under HTS headers 76.06, which evades China’s 15% export duty imposed on unwrought aluminum and makes the product eligible for export subsidies that start as low as 13%.

Architecture Billings Up Again, Pace of Increase Slows

The Architecture Billings Index was positive in July for the sixth consecutive month, and 10th out of the last 12 months as demand across all project types continued to increase. An economic indicator of construction activity, the ABI reflects the approximate nine to 12 month lead time between architecture billings and construction spending.

Free Download: The August 2016 MMI Report

The American Institute of Architects (AIA) reported the July ABI score was 51.5, down from the mark of 52.6 in the previous month. This score still reflects an increase in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 57.5, down from a reading of 58.6 the previous month.

China cut 13 million metric tons of excess crude steel capacity in the first half of the year, less than a third of its annual target.

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China’s vice industry minister said in July that the country will step up efforts in the second half. The minister pointed out that the focus of his organization’s work in the first half was mission planning and, in the second half, it will step up the implementation and enter a new stage. The Ministry will go from allocating targets and drawing policies, to actually pushing capacity cuts.

China's steel exports remain at elevated levels. Source: MarketRealist

China’s steel exports remain at elevated levels. Source: MarketRealist.

However, China’s steel exports were high again in July. China exported 10.3 million metric tons of steel, up 5.8% compared to July last year. For the first seven months of this year, China’s exports have risen 8.7% year-over-year. Read more

The Department of Commerce announced its final determinations in the anti-dumping duty investigations of imports of hot-rolled steel flat products from Australia, Brazil, Japan, Korea, the Netherlands, Turkey, and the U.K., and the countervailing duty investigations of imports of hot-rolled steel from Brazil, Korea, and Turkey.

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The big loser in this latest round of tariffs was South Korean steel giant POSCO (formerly the Pohang Iron & Steel Company) which received a total of 60.93% anti-dumping (57.04%) and countervailing duty (3.89%) tariffs on its hot-rolled imports. Read more

The U.S. International Trade Commission, on Friday, overturned an administrative law judge’s order temporarily suspending U.S. Steel‘s 337 petition seeking to block all Chinese carbon and alloy steel products from entering the U.S. market.

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The move comes ahead of a meeting of senior US and Chinese officials in Beijing next week. U.S. Steel, in late April, filed the case under the Section 337 rule, which allows trade sanctions for intellectual property theft.

It alleged that some four dozen Chinese companies and their U.S. subsidiaries had both acted as a cartel and benefited from the cyber theft of its production secrets.

Free Download: The July 2016 MMI Report

The ITC gave the go-ahead for the case to proceed, setting the stage for a legal battle that experts say could probably take more than a year for an administrative judge to decide.

Major toolmaker Kennametal, Inc. is cutting jobs and steel imports into the U.S. were up in July.

Kennametal Cuts Jobs

Industrial toolmaker Kennametal Inc., hard-hit by a deep slump in the coal and oil industries, plans to cut 1,000 jobs and increase cost-cutting “substantially” in North America, Europe, Middle East and Africa following its second-straight year of losses.

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Kennametal makes cutting and drilling tools used in oil and gas exploration, coal mining, road construction and other industries. To offset the slump in the coil and oil industries, Kennametal has been slashing costs and shedding operations.

Steel Imports into the US Up in July

Based on the Commerce Department’s most recent Steel Import Monitoring and Analysis (SIMA) data, the American Iron and Steel Institute reported today that steel import permit applications for the month of July totaled 3,198,000 net tons.

Free Download: The July 2016 MMI Report

This was a 7% increase from the 2,978,000 permit tons recorded in June and a 22% increase from the June preliminary imports total of 2,630,000 nt. Import permit tonnage for finished steel in July was 2,439,000 nt, up 10% from the preliminary imports total of 2,218,000 nt in June. For the first seven months of 2016 (including July SIMA permits and June preliminary data), total and finished steel imports were 18,713,000 nt and 15,211,000 nt, down 25% and 26%, respectively, from the same period in 2015. The estimated finished steel import market share in July was 27% and is 25% year-to-date .

Brazil is considering its options to fight the recent heavy U.S. anti-dumping tariffs on it over cold-rolled steel imports. Hedge funds have turned bearish on oil, encompassing both crude and refined products.

Brazil Might Take Cold-Rolled Dumping Case to the WTO

Brazil will wait for the U.S. International Trade Commission to rule on a Department of Commerce anti-dumping determination on its cold-rolled steel before appealing to the World Trade Organization, a senior Brazilian official said on Monday.

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The Commerce Department said last week that Brazilian cold-rolled steel was being subsidized by seven export promotion programs in Brazil and passed its anti-dumping determination to the ITC to rule whether there is injury to U.S. producers.

Hedge Funds Turn Bearish on Oil

Hedge funds have turned very bearish toward both crude oil and refined products over the last two months amid signs of an oversupply of gasoline.

Free Download: The July 2016 MMI Report

Hedge funds and other money managers added the equivalent of 56 million barrels of extra short positions in the three main Brent Crude and West Texas Intermediate futures and options contracts in the week ending July 26.