Based on preliminary Census Bureau data, the American Iron and Steel Institute (AISI) reported that the US imported a total of 3,243,000 net tons of steel in July.

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This includes 2,578,000 nt of finished steel (up 4.6% and 3.7%, respectively, vs. June final data).

On the year-to-date, through seven months of 2015, total and finished steel imports are 24,964,000 and 20,440,000 nt, respectively, no change and up 10% vs. the same period in 2014. Annualized total and finished steel imports in 2015 would be 42.8 and 35.0 million nt, down 4% and up 4% respectively vs. 2014 if they continue at this pace. The finished steel import market share was an estimated 27% in July and is estimated at 31% year-to-date.

Individual Steel Product Import Increases

Key finished steel products with a significant import increase in July compared to June are reinforcing bars (rebar). up 57%; plates in coils, up 29%; sheets and strip hot-dipped galvanized, up 26%; cold-rolled sheet, up 25%; heavy structural shapes, up 12%; sheets, strip and all other metallic coatings are up 12%; and cut-length plates are up 11%.

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Major products with significant year-to-date import increases vs. the same period last year include line pipe, up 55%; rebar, up 51%; standard pipe, up 33%: sheets and strip hot-dipped galvanized, up 22%: tin plate, up 17%; plates in coils, up 16%; cold-rolled sheets, up 14%; heavy structural shapes, up 13%; and cut-length plates, up 12%.


China’s currency, the yuan/renminbi, fell further this week after the International Monetary Fund dealt a setback to the currency’s role on the global stage.

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The IMF pushed back the date that the yuan would be added to the IMF’s basket of reserve currencies, known as the Special Drawing Right currencies. Originally scheduled to become a reserve currency at the end of December, the yuan will now have to wait until at least September 30, 2016.


Yuan to dollars over the last four years. Graph: Marketwatch.

The IMF said in a release that the postponement would allow “the continued smooth functioning of SDR-related operations and responds to feedback from SDR users on the desirability of avoiding changes in the basket at the end of the calendar year.”

Could it be possible that the IMF is having its own reservations about using the yuan/renminbi as a reserve currency after the big government devaluation last week? The international banking institution would certainly have good reason.

Banks Trading Dollars for Yuan

On Thursday, China’s central bank, defying market sentiment, set the daily reference rate for the yuan, or “fix,” stronger than in previous days at 6.3915 per US dollar. That’s 0.08% stronger than the level set a day earlier.

In early trade the currency fell. Traders cited large, state-owned banks selling US dollars, which sent the yuan sharply stronger midday and 30 minutes before it closed.

US dollar vs. RMB

Cheaper Chinese imports dragging down inflation could mean a stronger dollar.

“It is hard to have a high degree of conviction in anticipating the increasingly fitful reactions of the Chinese policy makers, and by extension the near-term direction of the [yuan],” analysts from Goldman Sachs wrote in a note earlier this week.

IMF Fires Still Burning

I’ll say.

Being recognized as a reserve currency would have been a symbolic win for China’s currency and for the central bank’s policy makers on the global stage, but with the currency now purposely devalued to its lowest point in three years and construction demand for metals and other commodities in China still falling, perhaps the last two weeks have been a wake up call to the IMF.

Or Not.

Maybe they really did plan this all along. The IMF has other problems, after all, with Greek Prime Minister Alexis Tsipras stepping down and calling for new elections there, a situation that could bring Greece’s debt woes back onto the IMF’s front burner.

Adjusting to a Possible Reserve Yuan

In its release, the IMF stated that “the extension (to naming another currency to SDR status) would also allow users sufficient lead time to adjust in the event that a decision were to be taken to add a new currency to the SDR basket.”

This adjustment period might be as good for users of the yuan as it is for the IMF, as the Chinese economy will have more than a year to recover by the time it’s eligible to join the SDR basket.

It is certainly riskier today to invest in yuan/renminbi assets than it was just last week. Still, the lower costs of these investments will, no doubt, open up investment opportunities in bonds and, if the economy gets back on track, Chinese construction.

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Here in the US, the Federal Reserve is still taking a cautious approach to raising interest rates and a weaker yuan/renminbi will mean even cheaper Chinese goods flowing into US ports creating another reason for the Fed to hold off on raising rates in the short-term. Beijing’s move could actually slow US inflation.

The yuan’s loss, could be the dollar’s gain.


We recently received a note from a reader with questions regarding the recent Chinese remninbi currency devaluation and how sourcing professionals ought to engage with their Chinese metals suppliers. The questions included:

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  1. Should I be approaching all of my Chinese suppliers for a 3.5% price reduction?
  2. Should I expect to get it?

There are several ways to answer that question. So let’s start with the narrow answer and then expand into other aspects of China’s currency announcements.

US dollar vs. RMB

What will the devalued yuan mean for your metal buying strategy?

The Basics

First, if you pay your Chinese metal suppliers in RMB (yuan) then you ought to expect an automatic price reduction of 3.5% because the currency has depreciated. In other words, when you convert your dollars to RMB, you should see a 3.5% advantage (or whatever the newest/latest currency exchange rate is).

But let’s assume that you buy your Chinese goods in US dollars, as most US buying organizations do. The next question you may need to ask is as follows: Did your Chinese suppliers extract a price increase from you in the last 12 months due to an appreciating currency (as opposed to any other reason)? If yes, then certainly it seems appropriate to request a price adjustment now.

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This post has been excerpted from our sister site, Spendmatters. For more on what the devaluation means to your buying organization visit SpendMatters.


The Commerce Dept. has begun an anti-dumping investigation of imports of heavy walled rectangular welded carbon steel pipes and tubes from South Korea, Mexico, and Turkey, and a countervailing duty investigation of imports from Turkey.

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The products subject to the investigations are heavy walled rectangular welded steel pipes and tubes of rectangular (including square) cross section, having a nominal wall thickness of not less than four millimeters. Such pipes are used as structural members in construction and industrial manufacturing.

The products include, but are not limited to, the American Society for Testing and Materials (ASTM) A-500, grade B specifications, or comparable domestic or foreign specifications.

The domestic manufacturers petitioning for the investigations are Atlas Tube, a division of JMC Steel Group; Bull Moose Tube Company; EXLTUBE; Hannibal Industries, Inc.; Independence Tube Corporation; Maruichi American Corporation; Searing Industries; Southland Tube; and Vest, Inc.

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They are alleging dumping margins of 53.8% for imports from South Korea, 11.9% from Mexico and 102.1 to 113.7% for the Turkish welded carbon steel pipes. Turkey is also accused of illegally subsidizing its exports, hence the countervailing investigation.


Anti-dumping petitions from US producers AK Steel, Nucor Corp., ArcelorMittal USA, SSAB Enterprises, U.S. Steel and Steel Dynamics charge that imports hot-rolled steel flat products from Australia, Brazil, Japan, South Korea, the Netherlands, Turkey and the United Kingdom are causing material injury to the domestic industry or being “dumped.

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The petitions allege that producers in each of the seven countries are selling hot-rolled steel in the US market at less than fair value, with the following substantial margins of dumping:

Australia: 99.20%
Brazil: 21.80%
Japan: 19.53% – 30.90%
South Korea: 86.96% – 158.93%
Netherlands: 55.21% – 173.17%
Turkey: 96.44% – 200.78%
The United Kingdom: 50.63% – 161.75%

The petitions also allege that the foreign producers in Brazil, South Korea, and Turkey benefit from numerous countervailable subsidies provided by their governments. The petitions identify 33 different subsidy programs in Brazil, 41 subsidy programs in South Korea, and 17 subsidy programs in Turkey.

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China is not one of the countries named in these petitions because imports of hot-rolled steel from China are already subject to an anti-dumping order. The petitions were filed concurrently with the Department of Commerce and the US International Trade Commission.

This is the third filed flat-rolled sheet trade case in the last three months as US producers filed petitions against corrosion-resistant imports at the start of June and followed that with petitions against cold-rolled imports at the end of July.


Domestic steel producers have filed new anti-dumping petitions against eight countries, charging them with unfairly subsidizing steel exports into the US. Also, the Senate Energy Committee has advanced a bill that would lift the 40-year US oil export ban but it faces a tough road with the full Senate.

Domestic Producers File New Steel Anti-Dumping Cases

AK Steel Corp., ArcelorMittal USA LLC, Nucor Corp., Steel Dynamics, Inc., and U.S. Steel Corp. – filed petitions recently with the Department of Commerce and the US International Trade Commission charging that unfairly-traded imports of cold-rolled steel flat products from Brazil, China, India, Japan, South Korea, Netherlands, Russia and the United Kingdom are causing material injury to the domestic industry.

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The petitions allege that producers in each of the eight countries are dumping cold-rolled steel in the US market at substantial margins, all above 42% government subsidy.

Bill to Lift US Oil Export Ban Advances

The US Senate Energy Committee on Thursday narrowly passed a bill to lift a 40-year-old ban on the export of crude oil, but the measure faces an uphill battle in getting passed by the full Senate, Reuters reported. The bill would allow the US to export oil and boost state revenue-sharing for offshore oil and gas drilling. It passed along party lines by a vote of 12-10.

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This is part two of an analysis of how China’s recent stock market crash affects neighboring India.

The Indian arm of global credit rating agency Fitch said with soft demand in China, base metal prices had gone down in the range of 2-21% in the first six months of 2015.

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On a year-to-date basis, Chinese domestic hot-rolled coil steel prices declined by 21%. London Metal Exchange nickel prices are down by about 12%, LME copper prices by 9% and China alumina prices by about 10%. In the last one month, iron ore prices dropped by 20%, Shanghai steel prices by 16.4%, and zinc prices by 7%.

What’s This Mean for Steel?

In reference to India’s steel sector, rating agency Ind-Ra pointed out that Indian manufacturers were already struggling with low capacity utilization, and lukewarm domestic demand was unlikely to benefit the margins of manufacturing units in the short term.

So was there any silver lining at all for India where the Chinese downturn is concerned? Depends who you listen to or talk to. Here’s what a report in the Business Standard claimed — the economic downturn would be good for smart cities. The rationale — copper is trading at a 6-year-low and China is the world’s top copper consumer, accounting for 40% of global consumption.

How About Aluminum?

Similarly, aluminum is trading at new lows and was already trading at prices below cost of production of many Chinese companies. For India, as a consumer, this is good news as the cost of constructing new infrastructure, especially smart cities, would reduce.

And that extends to a lower price for a technology innovation dear to almost everyone in the world, according to the report. Mobile phones will be cheaper, it predicted. If the Chinese really devalued their currency, world markets will be flooded with Chinese goods at low prices affecting exports of other countries, including India.

As for the rest, such as automobile manufacturers, it could possibly get only worse in the coming days.

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The author, Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner.


The US House voted last Wednesday to approve a short-term, $8 Billion extension of federal transportation funding, which will last until December.

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House Ways and Means Committee Chairman Paul Ryan (R-Wis.) has called on the Senate to pass the House’s $8 billion transportation funding patch “without any unrelated measures.”

Exports, Imports are Not Infrastructure

Ryan said after the temporary patch was approved on a 312-119 vote in the House, that the Senate should follow suit and send the lower chamber back a clean highway funding extension with no “unrelated measures.” Ryan was referring to a Senate plan to include an extension of the US Export-Import Bank’s charter in the upper chamber’s version of a new highway bill.


The US Export-Import Bank is closed for business and House republicans don’t want a new charter for it attached to a Highway bill.

The Ex-Im Bank’s charter was recently allowed to expire and House republicans have soured on the credit institution for US exporters. Many conservative groups view the bank as an outdated federal bureaucracy ready to be thrown on the scrap heap of government innovation and streamlining, believing that private banks can provide loans for exporters as they can for any other financial transactions. The Ex-Im Bank’s supporters claim it’s a vital institution needed to support US export competitiveness.

Clean Bill Requested

Either way, Ryan is sending a clear message that the House views infrastructure as an issue that should not be dependent on passage of a new Ex-Im Bank charter or other issues. Unlike the six-year, $275-billion Senate plan, Ryan’s December extension of the Highway Trust Fund is entirely paid for. The House Bill relies on $3 billion in savings from Transportation Security Administration fees (the ones you pay when you buy an airline ticket) and $5 billion in tax compliance measures to fund road projects through Dec. 18.

The Senate has yet to detail how it would pay for the $275 billion, six-year plan. Congress has been fighting over how to fund highway projects since 2005. The 18.4 cents-per-gallon federal gas tax is the main source of funding for the Highway Trust Fund, which will run out of money by the end of the month without another extension, but the tax has not been increased since 1993 and more fuel-efficient cars have eroded its power as a tax. The federal government typically spends about $50 billion per year on transportation projects, but the gas tax only brings in approximately $34 billion annually.

How to Fund Highway Projects?

Most House republicans oppose a gas tax increase and argue that the current economy is still hurting American consumers and any increase would further discourage travel and purchases, even with relatively low prices at the pump. Many republican senators agree, but influential democrats such as House Minority Leader Nancy Pelosi (D.-Calif.) have gone on the record saying that we should hike the federal gas tax.

With Ryan’s stand, though, it would seem that the House leadership will not even begin discussing a tax increase, or another funding mechanism for a long-term highway bill, unless it is in a standalone bill and will not allow other issues, such as the Ex-Im Bank, to be a part of those negotiations. The highway funding ball is now in the Senate’s court.

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Old Chinese proverb: when a giant in a race with another falters, the other, without a doubt, wins.

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Actually, I made that up. Ignore it. Still, when China’s economy started showing signs of a meltdown, some in India “predicted,” in a knee jerk reaction, that it was a “welcome development” for neighbor India.

No need to reiterate here how the two nations, with the largest populations and the largest economic growth rates, were in competition with each other in almost every sector.

A few days later, after the fog cleared, warning bells were rung by analysts and ratings agencies that if China was to lose the race, it would be tough for India, too. Even a tiny spill, such as the one China’s stock market felt last week, was bad enough. There would really be no winners in the race.

China’s economic troubles could have a significant impact on India, particularly in sectors like IT and steel, according to India’s trade and industry body, The Associated Chambers of Commerce and Industry of India (Assocham).

The adverse economic developments may have a directionally negative impact on the Indian metals industry as well as on sectors with an export focus, claimed another agency, India Ratings and Research (Ind-Ra) in a statement.

News reports, quoting metal analysts, claimed that while it was true that a drop in commodity prices linked to China’s slow demand was a positive for India, it was not really “good news” for a host of metal and iron ore producers such as Steel Authority of India, Tata Steel, and upstream oil producers.

The fall in ore, steel and copper prices hit Indian manufacturers as hard as any other company in the world, so what’s there to cheer about?

A paper prepared by Assocham said that in today’s global economy, where India’s economy — like any other — is plugged into the rest of the world’s, the China downturn was bound to impact India. China, incidentally, was the number one merchandise trader in the world with over $4.16 trillion worth of trade, followed by the US with $3.9 trillion, as claimed by Assocham.

But the more pertinent point made by Assocham was that the kind of cost competitiveness which the Chinese companies provided to manufacturing semi-process industries — such as electronics, electrical and telecom equipment — would disappear from the global supply chain. This is without even mentioning the inability of India to fill any of those spaces vacated by the Chinese companies.

Another news report quoted Hitesh M. Avachat, Deputy Manager at CARE Ratings, as saying that China accounted for more than 30% of the overall consumption of metals globally. For Indian metal producers, the price collapse meant their landed price in India would go down further, thereby pressuring companies to reduce prices. Because of the likely Chinese dump of its surplus goods, India’s export demand may also fall, he added.

Jayant Acharya, Director, Commercial and Marketing, JSW Steel Ltd., quoted in the same report, said if prices kept falling, margins would get impacted.

The Indian arm of global credit rating agency Fitch said with soft demand in China, base metals prices had gone down in the range of 2-21% in the first six months of 2015. On a year-to-date basis, Chinese domestic hot-rolled coiled steel prices had declined by 21%, London Metal Exchange nickel prices by about 12%, LME copper metal prices by 9% and China alumina prices by about 10%. In the last month, alone, iron ore prices dropped by 20%, Shanghai steel prices by 16.4%, and zinc prices by 7%.

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The author, Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner.


Gold miners saw their stock values plummet with the price of the yellow metal on Monday. BHP Billiton is investing $240 million in its Western Australia iron ore tug boat and port business.

Gold Sell-Off Hits Miners Hard

The steep sell-off in shares of gold miners, tracking a plunge in the metal’s price, wiped out more than $8 billion from their combined market value on Monday and pushed a global index of gold stocks to a six-and-a-half-year-year low.

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The Thomson Reuters Global Gold index slumped 8.5% to its lowest since late 2008, the biggest one-day percentage drop in two years, after gold prices sank.

BHP Investing in Infrastructure

BHP Billiton said today it will spend $240 million upgrading its marine iron ore facilities in Western Australia. The funds will be used to purchase six tug boats and build a new tug harbor in Port Hedland’s inner harbor, with construction due to be completed in September 2016.

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