Articles in Category: Imports

Last week, the U.S. International Trade Administration rescinded the Department of Commerce’s request to 124 Chinese aluminum extruders to participate in the 2014 administrative review of anti-dumping and countervailing duties previously levied against them.

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One of those companies was China Zhongwang Group, the world’s second-largest producer of aluminum extrusions. Last year, Zhongwang was accused of evading U.S. import duties by shipping extruded aluminum products — including pallets and 5050 alloy extrusions — into the country without paying the duties.

“Mounting evidence from private investigators, testimony from former employees, data from online import and export databases, and anecdotal evidence from a variety of reporters and other sources made it clear that ZW has consistently and systematically been exporting aluminum extrusions that are simply welded together into what are essentially aluminum slabs,” U.S. industry group the Aluminum Extruders Council wrote in a statement at the time.

“While they claim these so-called ‘deep-processed’ extrusions are aluminum pallets, there is no evidence that Zhongwang or any of its U.S.-based operations market such a product. It is simply incomprehensible that a company would export hundreds of millions of pounds of these extrusions into the U.S. without even marketing them,” the statement continued.

The Aluminum Extruders’ Council stressed that the administrative review has no bearing on the ongoing Zhongwang scope and circumvention cases. Commerce sends notices and requests to Chinese extruders inviting them to participate in that year’s administrative review every year. Zhongwang’s invitation was simply rescinded with all of the others as a matter of protocol.

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However, Commerce did announce its preliminary rates for the administrative review. The countervailing duty rates for aluminum extrusions are staying at 20% and the anti-dumping duty rates have been maintained at 86% for 2017. These are preliminary decisions and Commerce will announce final determinations in December.

Reuters_MetalMiner Chart of the Week 062216_550

Source: Reuters

Aluminum reached a one-month high this week as Chinese demand took up more supply at home. As the Shanghai Futures Exchange price has risen, idled smelters has restarted.

The Commerce Department has placed preliminary countervailing duties on imports of biaxial integral geogrid products from China. Geogrids are used in road construction for ground stabilization but also in buildings foundations for the same reason.

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They usually consist of a grid made from an extruded polymer, usually polypropylene or high density polyethylene that’s filled with aggregate to stabilize a road or foundation surface. Commerce preliminarily determined that many producers/exporters in China received countervailable subsidies ranging from 16.60% to a huge 128.27%.

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Biaxial geogrid product being used in road construction. Credit: Tensar.

This is the second-time this year that geogrids from China have been tariffed. Georgia-based Tensar International Corp. filed petitions last year over imports of Chinese biaxial integral geogrid products, asserting that the Chinese grids are receiving illegal government subsidies and being unfairly dumped on the U.S. market. The ITC made a preliminary injury finding in January that marked the clearance of the first procedural hurdle in the case. Now that both the ITC and Commerce have made affirmative initial dumping rulings, final determinations should be expected soon.

How to Protect Intellectual Property?

Although geogrid products are a relatively obscure construction input, the financial stakes of the case are considerable, as Commerce has said that U.S. imports of Chinese biaxial integral geogrid products tallied $1.5 billion in 2014. It’s an example of the difficulty U.S. manufacturers face, including those of metals, in developing products —Tensar invented the biaxial geogrid that’s now been used in millions of construction projects worldwide — and then defending their products from mass production by Chinese producers.

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“The volume, price effect and impact of the subject imports have been both significant and harmful,” Tensar said in its filing. “Accordingly, the commission should find that subject imports have caused material injury to the domestic industry.”

The Indian government has been taking a number of steps to tackle the serious issue of inflow of cheap steel products from China and other nations.

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Recently it issued quality control rules that required registration for the manufacture, import and sale of 16 steel products. One of the outcomes of this order was that it would weed out defective and substandard stainless steel used in utensils and kitchen appliances.

The quality control order was issued by the steel ministry in consultation with the Bureau of Indian Standards (BIS), making it compulsory to hold a BIS certificate. The certificates apply to low-grade stainless steel plates, sheets and strips, especially those used for utensils as well as for low nickel austenitic stainless steel sheet and strips used in kitchen appliances and utensils.

The latest Quality Control Order is applicable to some 25 grades of stainless steel. Incidentally, the QCO mainly covers three Indian Standards including IS 5522, IS 15997 and IS 6911. Grades covered by these three standards are: IS 5522 – 304, 302 & 430; IS 15997 – N1 (Min 1% Nickel), N2 (Min 1.5% Nickel) & N3 (Min 4% Nickel); IS 6911 – 405, 430, 410, 420S1, 420S2, 420S3, 431, 440, 201, 201A, 202, 301, 302, 304S1, 304S2, 309, 310, 316, 316L, 316Ti, 321 & 347.

The order was to be implemented by the producer, domestic or foreign, and not the end user.

Well-Received Order

The order placated a section of domestic steelmakers who were clamoring for a stop to cheap imports. In March, after some intense lobbying by steel players, the Indian government extended safeguard duties on a range of steel products by another two years to protect local steelmakers from cheap imports.

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The move was welcomed by the Indian Stainless Steel Development Association (ISSDA), a trade body representing the stainless steel industry. ISSDA also pointed out that the order will have a minimum impact on the stainless steel utensils market since it does not cover stainless steel containing less than 1% nickel.

ISSDA President N.C. Mathur said the order would ensure competitiveness and growth of India’s manufacturing sector.

Recently, the Department of Commerce announced affirmative preliminary determinations in the anti-dumping duty investigations of imports of circular welded carbon-quality steel pipe from Oman, Pakistan, United Arab Emirates, and Vietnam.

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Pakistan got hit with 11.8% initial anti-dumping duties, Oman’s Al Jazeera Steel Products (and all other producers) received 7.86% duties from U.S. Customs and Border Protection when attempting to import its products, producers in the UAE received dumping rates from 6.10% to 9.25%, Pakistan was judged to deserve dumping margins of 11.8% and Vietnam received a whopping nationwide dumping rate of 113.18%.

drillpipe stacked near rig

Why is Al Jazeera Steel fighting dumping margins of just 11.8%? Source: Adobe Stock

This isn’t the first time circular welded carbon-quality steel pipe has come up in the dumping wars. It’s not even Pakistan’s first turn at the welded carbon steel pipe dumping merry go round. Read more

Huge inventory levels and increased production are not helping India’s iron ore mining sector.

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According to a recent report by credit rating agency ICRA, India’s iron ore prices are not likely to recover in the near future. On the other hand, steel companies would benefit from this development in the short term. They were likely to enjoy “better profitability” due to improved steel prices in the current year, supported by imposition of minimum import price (MIP) by the government.

Production Up, Prices Down

India’s iron ore production in 2015-16 was at 155 million metric tons, registering an annual growth rate of 23%, ICRA said in a statement. Much of the incremental production in iron ore was because of stepped up mining in the Indian state of Odisha. In the current fiscal, ICRA said, India’s iron ore output could be somewhere in the range of 170-175 mmt.

The Federation of Indian Mineral Industries (FIMI), on the other hand, was of the view though that the Indian iron ore export mining industry needed tax relief to compete internationally after an absence of approximately four years when mining was largely banned in many Indian states.

Speaking at an iron ore conference in Singapore recently, R.K. Sharma, Secretary-general of FIMI said it would “challenging” to restart some of the mines after they have been shuttered for four years.

According to ICRA Corporate Sector Ratings Senior VP Jayanta Roy, because of the substantial iron ore inventory levels at existing mines and the fact that India’s iron ore production was slated to increase further, domestic iron ore prices are unlikely to recover meaningfully in the near term, which benefits local steel mills.

Post minimum-import-price, Indian hot-rolled coil (HRC) prices have seen a sharp increase of about 25% from the lows reached in February 2016, according to ICRA’s quarterly research report on the steel industry. Industry players saw additional gains due to an increase in sales volumes, as imports were likely to reduce in the current year.

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The MIP is scheduled to expire in the second quarter of the India’s fiscal year (April 1 to March 31), but according to analysts, the present level of international prices and the extension of a safeguard duty by the Indian Government to March 2018, could continue to boost prices and prospects for Indian steel producers.

On Wednesday, the People’s Bank of China weakened the yuan/renminbi to its lowest level in five years. The actual cut was small: only about 0.34%. The Chinese yuan closed 0.2% weaker on Tuesday at 6.559 per dollar compared with that morning’s midpoint of 6.5468. Since the end of April, the currency’s value has dropped three weeks in a row.

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It did not send world markets spiraling downward as panicked investors did last August when China devalued its currency by nearly 2%, or in early January, when it cut by about 0.5%.

How Fast is the Chinese Economy Growing?

China’s ruling Communist Party still claims the country is growing 6.5% to 7% a year. Capital Economics, among other independent forecasters, believes the real number is closer to 4.2%.

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Click for full size. Source: Bloomberg News

Market watchers believe there is a struggle going on between China’s top leaders on what to do next.

The Wall Street Journal reported that, behind closed doors in March, some of China’s most prominent economists and bankers bluntly asked the PBOC to stop fighting the financial markets and let the value of the nation’s currency fall. They supposedly got nowhere with bank officials.

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The Commerce Department has delivered a final determination that imports of corrosion-resistant steel from China, India, Italy, South Korea, and Taiwan were illegally dumped in the U.S. The investigation found that countervailable subsidization of imports of corrosion-resistant steel products from China, India, Italy and South Korea occurred and that there were actually no countervailable subsidies of imports of corrosion-resistant steel from Taiwan.

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Companies from China received final anti-dumping duties of 209.97%. Many Chinese companies also did not cooperate with the countervailing duties investigation and were hit with CVD tariffs of 241.07%.

This means many Chinese companies received total import tariffs of 451.04%.

Hyundai Steel Company in South Korea got hit with anti-dumping duties of 40.97%. Read more

Steel imports into the U.S. were down in April and, if the numbers are able to be believed, China is importing more nickel ore than ever before.

Steel Imports Down in April

Based on preliminary Census Bureau data, the American Iron and Steel Institute reported that the U.S. imported a total of 2,456,000 net tons of steel in April 2016, including 2,014,000 nt of finished steel (down  5.6% and  4.1%, respectively, vs. March final data).

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Year-to-date through four months of 2016 total and finished steel imports are 9,982,000 and 8,442,000 nt, respectively, down 34% and 33% vs. the same period in 2015.

Annualized total and finished steel imports in 2016 would be 29.9 and 25.3 million nt, down 23% and 20% respectively vs. 2015. Finished steel import market share was an estimated 24% in April and is estimated at 25% on the year-to-date.

Key finished steel products with a significant import increase in April compared to March are line pipe (up 38%), hot rolled bars (up 35%), structural pipe and tube (up 27%), standard pipe (up 17%) and cold-rolled sheets (up 15%).

Chinese Nickel Imports

China is importing more nickel than ever before. Headline imports of refined metal hit a new all-time record high of 49,012 metric tons in April. The cumulative tally of 157,600 mt over the first four months of the year represents a 115,000-mt increase over the same period of last year.

Free Download: The May 2016 MMI Report

Reuters’ Andy Home writes that there is too much going on to get a good idea of what the imports really are and where they’re being used.

The top steel executives in the U.S. called the fight against cheap steel imports a “war” in the American Iron & Steel Institute‘s annual press conference at its general meeting in Salt Lake City, Utah. The picture they painted was bleak.

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Domestic steel capacity utilization averaged just 70% in 2015. It’s still only at 71.3% capacity utilization for Q1 of this year. They also said 13,000 steel jobs have been lost in the past year. All pointed the finger at global overcapacity.

Crisis Level

“Global overcapacity has been a problem for a long time but, today, it is a crisis,” said John Ferriola, chairman, president and CEO of Nucor Corporation and the newly elected chairman of the AISI for 2016. “This overcapacity, combined with declining demand from countries like China is fueling continued high levels of dumped and subsidized imports into the U.S. market. China has subsidized the growth of its steel industry through grants, low-interest loans, free land, low-priced energy and other raw material inputs. Simply stated, the Chinese government is a company disguised as a country and they are waging economic war on the United States.”

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Executives from major North American steel companies addressed the media at the general meeting of the American Iron & Steel Institute in Salt Lake City. Source: Jeff Yoders/MetalMiner.

Thomas J. Gibson, president and CEO of AISI, called upon other steel making nations to take action to eliminate global steel overcapacity. Gibson also said the U.S. government should vigorously enforce trade laws to fight against the dumping of cheaper steel products and the implementation of market-distorting policies and practices by other steel producing nations, particularly China.

China’s Still a Non-Market Economy

The executives also said that China must continue to be treated as a non-market economy for anti-dumping purposes according to the World Trade Organization. Read more