Articles in Category: Imports

The Department of Commerce placed preliminary countervailing duties on Turkish steel rebar imports today, the trade case is ongoing.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

Countervailing duties are placed on products found by Commerce to have been injuriously subsidized by foreign governments importing said products into the U.S. The definition of a countervailable subsidy is financial assistance from foreign governments that benefits the production of goods from foreign companies and is limited to specific enterprises or industries, or is contingent either upon export performance or upon the use of domestic goods over imported goods.

Commerce calculated a preliminary subsidy rate of 3.47% for the mandatory respondent Habaş Sinai ve Tibbi Gazlar Istihsal Endüstrisi A.Ş. (Habas).

There  an existing countervailing duty on rebar from the Republic of Turkey (79 Fed. Reg. 65,926 (Dep’t Commerce Nov. 6, 2014). This new countervailing duties investigation on rebar from Turkey covers only rebar produced and/or exported by those companies that are excluded from the 2014 Turkey order. Read more

Slowly but surely, India seems to be shifting the goal posts on its minimum import price policy designed to protect the domestic steel industry.

Click Here for Current Metal Prices

India recently extended the anti-dumping duty on cold-rolled flat steel products from four nations, including China, Brazil and South Korea to guard the domestic steel industry from cheap imports for another two months. The duty was expected to expire after six months and was recently extended to give it a total duration of eight.

Domestic Indian steelmakers could see their protective minimum import prices for steel products lifted. Source: Adobe Stock/ft2010.

India had previously imposed a minimum import prices (MIP) to protect the steel industry and the cold-rolled duties came in addition to the MIP. The policy was described as a short-term emergency measure while anti-dumping duties are a long-term measure to protect the country’s trade.

Yet, according to a recent media report, India’s steel secretary Aruna Sharma said there would be no minimum import price (MIP) extension for 19 steel products.

How the MIP Started

India started imposing an anti-dumping duty of $474-$557 per metric ton on hot-rolled flat products of alloy and non-alloy steel imported from China, Japan, South Korea, Russia, Brazil and Indonesia in August. Read more

Initial panic in India over reports of an executive order to be signed by U.S. President Donald J. Trump tightening the non-immigrant H-1B visa regime has subsided. Outsourcers, primarily from India, are the top recipients of H-1B visas, managing the technology departments of large U..S corporations with imported staff.

Two-Month Trial: Metal Buying Outlook

From anxiety, the mood here has now dropped to a “wait and see” one. The Government of India has tried to allay fears by saying no such executive order has been passed and Foreign Ministry spokesman Vikas Swarup explained to the media that three private bills in the matter had been introduced in the U.S. House of Representatives, adding that such bills had been introduced in the past, too, and the mere introduction of them is nothing new. For now, the government does not want to say anything more, since the bills have to go through the full Congressional process.

Panic at the IT Department

Analysts say the panic was natural since news about the likely change in the H-1B visa rules came soon after the new President banned refugees and travelers from seven predominantly Muslim countries from traveling to the U.S. (the travel ban has since been temporarily lifted by a temporary restraining order from a federal judge). Read more

Among the ideas that the Trump administration has mentioned as a way to pay for the planned southern border wall is a 20% tax on all goods coming in from Mexico. Press Secretary Sean Spicer and other administration insiders were quick to point out that this is just one of many ideas (including taxing remittances sent to municipalities from nationals working in the U.S.) being considered for how to get Mexico to pay for the wall that it certainly doesn’t want.

Click Here for Current Metal Prices

If President Donald Trump makes good on threats to gut NAFTA and impose stiff tariffs on Mexican goods, economists say he risks a trade war that could lead to the very thing he is hoping to avoid — a huge surge in Mexican migration here to the U.S.

A stiff tariff policy and a wall could very well be catastrophic for the Mexican economy. Recession, a dramatic weakening of the peso, soaring inflation, interest rates and unemployment would only be the start of it.

“Mexico is smaller than the U.S. and can be harmed by conflict more than the U.S. would be,” said Adam Posen to the Associated Press. Posen is president of the Peterson Institute for International Economics, a Washington think tank that supports free trade.

Still, it’s hard to argue that Trump’s talk couldn’t conceivably leave U.S. manufacturers with a better deal with Mexico, precisely because the one they have right now is so, so bad. According to the Office of the U.S. Trade Representative, the U.S. goods and services trade deficit with Mexico was -$49.2 billion in 2015.Mexico is currently our third-largest goods trading partner with $531 billion in total (two way) goods trade in that year, the last for which full figures are available. Goods exports totaled $236 billion; goods imports totaled $295 billion. Is that -$49.2 billion an opportunity? Possibly for both the U.S. and Mexico?

A Mexico-U.S. Deal That Targets China?

Bank of America Corp. chief Mexico and Canada economist, Carlos Capistran, pointed out in a recent report that 90% of the U.S. trade deficit lies outside North America. Bringing together more resources from Mexico and Canada within the NAFTA free-trade zone could help make everyone more competitive and narrow that gap.

It’s not a crazy idea, really, at all. China has played a greater role boosting the U.S. trade deficit than Mexico over time, even without a free-trade agreement. From 1993 to 2015, the gap with China grew by $361 billion versus Mexico’s roughly $49.2 billion. Mexico also buys about twice as much from the U.S. as China does. A Bloomberg article points out that deterring imports from Mexico, in some future negotiation, could give way to mutual export growth for both countries, spurred “by helping to create larger and more innovative companies.”

Two-Month Trial: Metal Buying Outlook

Of course, after President Enrique Pena Nieto canceled a trip to Washington to discuss new trade terms after President Trump’s executive order asking for the aforementioned wall… we’re not heading in that direction right now. The best that either side can hope for is that the Trump at the negotiating table is far different than the Trump in campaign mode. As a businessman and a politician it can’t be lost on him that the trade deficit numbers with China are far worse than those with Mexico… and we just might need each other yet.

This week, the new Trump administration issued a series of executive orders that revived the Keystone XL and Dakota Access pipelines, one that required only American-made steel in all pipeline projects and even created a council of manufacturing CEOs, trade organization and union leaders.

If the Atlantis Hotel in Dubai can have a monorail why can’t San Diego and Tijuana? Source: Adobe Stock/Pavel Lasevsky.

Since trade, manufacturing and infrastructure are playing such a key role in this presidency, and Trump campaigned his way into office saying they would revive our economy and deliver better deals and more prosperity… why stop at walls and pipelines?

Click Here for Current Metal Prices

A pipeline is one long metal tube, after all? Yes, we are calling for monorails. Monorails as far as the eye can see. A country with(out) money is a little like a mule with a spinning wheel, after all. It’s not more of an Oracle, idea, either, for those of you who have come from our sister site, SpendMatters.

Here’s my thinking: once that wall across the Southern border is done, we’ll need some way to get guest workers and highly taxed imports across the border. Why not a bona-fide, electrified, six-car monorail from Tijuana to San Diego and back? Or Brownsville to Matamoros? If we’re adding 20% import taxes, after all, the goods that come across could pay for the construction of the wall and the monorail it comes in on.

Two-Month Trial: Metal Buying Outlook

San Diego and Orlando could have dueling Sea World monorail stops.

President Trump says his infrastructure plan will include ports, airports, railways and highways, adding a few monorails can’t up the price that much. Just add .3 to the existing $1 trillion bill. Manufacturing and trade are going to be the engines of our economy, after all, so why can’t the engines be mag-lev?

Two global steel giants, India and Japan, are headed toward a trade war. For once, one participant in the trade row isn’t the U.S… not directly, at least.

Click Here for Current Metal Prices

Japan, the world’s second-largest producer of steel, has threatened to take India to the World Trade Organization over import restrictions asserted by India. If incoming reports are true, Japan may soon be joined by Taiwan and even Russia.

Despite the excellent trade relations the two nations enjoy, Japan is unhappy with India’s decisions to place a minimum import price and other assorted duties to protect its domestic steel industry. Japan claims this has halved its steel exports to India in the last year.

Working quietly on the sidelines, Indian government officials having been trying to iron out differences with their Japanese counterparts and settle the dispute in consultation but, so far, the sides have not had much luck. According to a news report, India’s Director-General of Safeguards and the Ministry of Steel were assessing points raised by Japan against the calculation of safeguard duties so that they could counter Japan and defend the duties before the WTO. India, obviously, does not want Japan — for that matter any other nation — to escalate this matter into a full-fledged dispute at the WTO.

But why is Japan reacting now, especially since some of the restrictions have been in place in India for almost two years? Analysts say that with U.S. President Donald Trump raising the cry of “America, First,” Japan is now concerned that it could lose a large chunk of its steel export market, and thus, is making an open stand for what it considers free and fair international trade. India is just the proxy country used to fight a larger war against MIPs and other border taxes.

A Japanese industry ministry official, explaining a Dec. 20 request for WTO dispute consultations with India over steel safeguard duties and the MIP for iron and steel products, said it needed to stop unfair trade actions from “spreading.”

India imposed duties of up to 20% on some hot-rolled flat steel products in September 2015, and set a floor price in February 2016 for steel product imports. India’s anti-dumping duty amounts to $474-557 a metric ton on hot-rolled flat products of alloy and non-alloy steel imported from China, Japan, South Korea, Russia, Brazil and Indonesia in August. These nations account for almost 90% of India’s steel imports.

Two-Month Trial: Metal Buying Outlook

Russia and Taiwan, too, may join Japan in requesting consultations at the WTO over India’s use of a MIP regime. Proceedings could start as early as February.

Meeting at the White House’s Roosevelt Room this morning with 10 senior American business executives, lawmakers and the press, President Donald Trump repeated his campaign pledge to roll back corporate rules, arguing that they have “gotten out of control.”

Click Here for Current Metal Prices

Trump told the business leaders he would cut regulations “by 75%, maybe more.” Read more

Two years ago, India overtook the U.S. to become the third-largest steel producer in the world, but now finds itself a net importer of steel in 2015-16.

Click Here for Current Metal Prices

To address this and other steel issues, the Indian government has drafted and recently released a “National Steel Policy” for 2017. The policy aims for production target of 300 million metric tons per year by 2030-31, up from the current 122 mtpy, a reduction in imports and also a hike in the current production of a crucial raw material, coking coal.

India’s steel ministry says the policy is an effort in steel circles in India to steer the industry to achieve its potential and a strategy to overcome various hurdle such as high input costs, lack of availability of raw materials, and to try to achieve the 300 mtpy target in an environmentally friendly manner so that the country can reach its correspoding global efficiency benchmarks.

A major disadvantage that the Indian steel sector faces is the limited availability of essential raw materials like coking coal, both in quantity and quality. Most steel producers have to depend on imports to overcome this impediment, mostly from neighboring China.

The National Steel Policy aims at achieving increased domestic availability of washed coking coal so as to reduce import dependence on coking coal by 50% by 2030-31. Under the plan, India is aiming for per capita steel consumption of 160 kilograms per person from the present 61 kg.

Two-Month Trial: Metal Buying Outlook

India’s crude steel production in 2015-16 was 89.77 million metric tons. The country’s steel sector, the only silver lining in an otherwise bleak global steel economy last year, faced challenges. Heightened steel demand domestically in India could see it get there. In 2015, for example, India was the only large economy in the world where steel demand continued to grow positively at 5.3%, against negative growth in China at -5.4%.

The Steel Ministry is seeking comments on the policy draft from stakeholders and public.

The price you pay for your steel pretty much depends on two things:

  1. Prices in China, since they set the floor for international steel prices.
  2. How much of a premium U.S. mills are able to justify over that price.

 

Graphic: Raul de Frutos/MetalMiner.

Prices in China are moved by supply and demand dynamics. We’ve explained in previous posts that overall, things are setting up for Chinese prices to continue to trend higher. While demand has been better than expected, China met its 2016 capacity cuts goal and further cuts are expected to take place this year as the country tackles its pollution issues.

Click Here for Current Metal Prices

However, in this post we’ll focus on the premium that U.S. customers pay. This price spread between U.S. and international prices is also very important and could make your purchases more expensive in the coming months.

Spread between HRC US and HRC China. Source: MetalMiner IndX.

Spreads have fallen sharply over the past few months. The spread between U.S. and Chinese hot-rolled coil (HRC) prices is now $97/ton. To put this in context, consider that this spread was $276/ton just seven months ago. Read more

What will 2017 bring for the steel industry?

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

At the beginning of the year, it’s always fun to look forward and pick out some of the themes for the year. 2016 was certainly volatile as hot-rolled coil pricing went from $360 a ton to $600/ton, then back to the low $400s/ton before recovering to $600/ton. Phew! Read more